{"id":969,"date":"2024-05-24T01:47:49","date_gmt":"2024-05-24T01:47:49","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/live-nation-lawsuit-includes-ceo-emails-to-boost-governments-case\/"},"modified":"2024-05-26T17:37:38","modified_gmt":"2024-05-26T17:37:38","slug":"live-nation-lawsuit-includes-ceo-emails-to-boost-governments-case","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/live-nation-lawsuit-includes-ceo-emails-to-boost-governments-case\/","title":{"rendered":"Live Nation Lawsuit Includes CEO Emails to Boost Government’s Case"},"content":{"rendered":"\n
\n

\n\tThe Department of Justice dropped a wide-ranging antitrust complaint against Live Nation on Thursday (May 23), highlighting more than a dozen examples of the company\u2019s \u201canticompetitive and exclusionary\u201d behavior in accusing it of operating live music\u2019s largest monopoly.<\/p>\n

\n\tThe evidence looks particularly bad for Live Nation chief executive Michael Rapino<\/strong>, whose own emails are being used against him to document alleged threats made against competitors while the company was operating under a federal consent decree tied to its 2010 merger with Live Nation.<\/p>\n

\n\tUnder the arrangement, regulators with the government had the right to obtain company documents, including communications, without a subpoena. The most damaging evidence is an email exchange involving Oak View Group\u2019s Tim Leiweke<\/strong> and mega music manager Irving Azoff<\/strong>, who co-founded the arena development and management company together.<\/p>\n

\n\tLeiweke was the CEO of AEG, Live Nation\u2019s main rival in the concert business, until 2012, when he was fired by company owner Phil Anschutz<\/strong>. After a brief stint running the Toronto Maple Leafs and its sports and entertainment interests in Canada, he returned to the United States and eventually founded Oak View Group (OVG) in 2015.<\/p>\n

\n\tThe government claims Rapino tried to leverage his company\u2019s partnership with OVG to pressure private equity firm Silver Lake to kill off a rival ticketing company that Rapino allegedly believed represented a major threat to Ticketmaster.<\/p>\n

\n\tIf true, the story could be a major problem for Rapino, underscoring the government narrative that despite Live Nation\u2019s massive market share, the CEO operates the company like a paranoid pugilist, willing to cross ethical and legal boundaries to eliminate tiny threats.<\/p>\n

\n\tSilver Lake has been OVG\u2019s strategic investment partner since the company\u2019s founding, investing $100 million to launch it. Today, it has more than $2.5 billion tied up in OVG development projects. Silver Lake also owns TEG, an Australian concert promotion company that operates Ticketek, a large Australian ticket provider with more than 130 clients.<\/p>\n

\n\tAccording to the 120-page complaint filed Thursday in federal court, \u201cIn 2021, Live Nation\u2019s CEO complained to Oak View Group\u2019s co-founder that TEG was \u2018[f]ull on competitors.\u2019 Oak View Group, in turn, conveyed to Silver Lake that Live Nation was \u2018not happy.’\u201d The complaint adds that Rapino then escalated his complaints to Silver Lake directly, stating: \u201cI am all in on [Oak View Group] where the big play lies with venues \u2013 why insult me with this investment in ticketing\/promotions etc.\u2019\u201d<\/p>\n

\n\tAccording to the lawsuit, \u201cRapino threatened to pull its support from Oak View Group and instead back an Oak View Group competitor unless TEG stopped competing with Live Nation in the United States,\u201d the complaint alleges.<\/p>\n

\n\t\u201cI can assure you the OVG investment is a much bigger win then T[E]G,\u201d Rapino wrote in an email to an unnamed Silver Lake executive that\u2019s included in the lawsuit. \u201cIt\u2019s been a huge win for both sides\u2013 we have over 20 global arenas in development that neither could do without the other \u2026 do you really want LN backing [AEG\u2019s venue development and management company]\u2026? Seems like a dumb trade off??\u201d<\/p>\n

\n\tTo aid in the pressure campaign, Azoff \u201creportedly refused to allow TEG to promote any of his large roster of artist clients,\u201d the complaint alleges. It further states that Azoff told Rapino \u201cthat he was going to demand that Silver Lake sell TEG. [To which] Live Nation\u2019s CEO replied \u2018Love ya.\u2019\u201d<\/p>\n

\n\t\u201cSilver Lake now seems \u2018intent on dumping teg\u2019 and has asked, through the founder of Oak View Group, whether Live Nation would be interested in purchasing TEG,\u201d the complaint reads in describing the back-and-forth.<\/p>\n

\n\tLive Nation did not purchase TEG, but in early 2023, a deal was brokered for Silver Lake to sell the company to investment companies Blackstone and KKR. That deal collapsed in October over disagreements over the valuation of the company, which is now being readied for an IPO in Australia.<\/p>\n

\n\tLive Nation issued a statement on this allegation, stating that the \u201cclaim reveals not only a disregard for the facts, but also deep hypocrisy.\u201d<\/p>\n

\n\t\u201cThe current DOJ and FTC have been vocal critics of private equity companies making multiple investments in the same industry because of competitive \u2018entanglements,\u2019\u201d the statement continues. \u201cSo was Live Nation CEO Michael Rapino when, after it had already made an investment in OVG, Silver Lake Partners decided to invest in the Australian live entertainment company, TEG. Rapino\u2019s complaint was fundamentally the same as the DOJ\/FTC concern with private equity rollups: it created a conflict between OVG, which had become a close partner to Live Nation, and TEG. So, in December 2021 when a TEG employee wrote to say that it did not intend to compete with Live Nation in the U.S., Rapino replied to Silver Lake\u2019s management that he did not care about TEG, but still had a problem with Silver Lake\u2019s decision to make multiple conflicting investments in the industry.\u201d<\/p>\n

\n\tThe statement also claims that \u201cthere is no truth that this brief exchange had anything to do with Silver Lake\u2019s decision to sell its stake in TEG.\u201d<\/p>\n

\n\tIn addition to the allegations around TEG, the government\u2019s complaint further alleges that OVG, when it was first founded in 2015, was \u201cparticularly well-suited to be a real competitor to Live Nation in the United States concert promotion business\u201d but changed its model to avoid competing with Live Nation.<\/p>\n

\n\tThe evidence from the time, however, shows that OVG and Live Nation had long billed themselves as partners. A November 2015 press release announcing OVG\u2019s launch includes a quote from Rapino endorsing Leiweke\u2019s business model, stating, \u201cBoth Tim and Irving are friends of Live Nation as well as personal friends. The concept of creating an economic model for both arena\u2019s and touring artists that creates new revenue streams and develops an \u2018anchor\u2019 type of platform for music is one we share.\u201d<\/p>\n

\n\tThe DOJ claims that Live Nation initially identified OVG as one of its \u201cBiggest Competitor Threats\u201d but that over time, the two firms morphed \u201cfrom competitors into partners who found it easier and mutually beneficial to work together rather than compete.\u201d<\/p>\n

\n\tAccording to the government, OVG in fact operates as \u201ca self-described \u2018pimp\u2019 and \u2018hammer\u2019 for Live Nation, with Leiweke once telling Rapino \u2018[j]ust like I tell our folks we 100% always protect you and LN on your lanes.\u2019\u201d<\/p>\n

\n\tIn 2016, \u201cafter learning that Oak View Group offered to promote an artist Live Nation had previously promoted, Live Nation\u2019s CEO immediately emailed Oak View Group, warning that such competition would only lead to artists demanding more compensation,\u201d reads the complaint. It further includes an email in which Rapino wrote of the artist: \u201cWhats up? We have done his [touring] and vegas[.] Let\u2019s make sure we don\u2019t let [the artist agency] now start playing us off.\u201d<\/p>\n

\n\tAs outlined in the complaint, Leiweke immediately responded, \u201cOur guys got a bit ahead. All know we don\u2019t promote and we only do tours with Live Nation.\u201d<\/p>\n

\n\tAzoff later chimed in, writing \u201cGrowing pains,\u201d subsequently noting that OVG executives \u201cshould never discuss comp [for artists],\u201d and that OVG\u2019s talent buyers would work for Live Nation.<\/p>\n

\n\tThe government argues that this discussion is an example of Leiweke and Azoff colluding with Rapino to limit the competitive bids sent to an artist in order to keep artists fees low. In another example cited in the complaint from 2022, Rapino admonished Leweike for making a direct offer to an artist to play an OVG venue instead of asking Live Nation to promote the show for OVG.<\/p>\n

\n\t\u201cWho would be so stupid to do this and play into [the artist agent\u2019s] arms\u201d? Rapino asked Leiweke in the email. Leiweke responded, \u201cWe have never promoted without you. Won\u2019t,\u201d before later writing, \u201c[m]ore than happy to do these deals thru LN as I have always been aligned,\u201d and that \u201cI never want to be competitors.\u201d<\/p>\n

\n\tThe complaint also alleges that Live Nation \u201cexploits its long-term relationship with Oak View Group to flip venues to Ticketmaster, further cementing Ticketmaster\u2019s power.\u201d<\/p>\n

\n\tAccording to the DOJ, in 2022, Live Nation and OVG signed an unspecified agreement that resulted in OVG recognizing \u201cit has a significant financial interest in maintaining existing Ticketmaster contracts at its venues and converting other venues to Ticketmaster.\u201d<\/p>\n

\n\tAt some point, according to the lawsuit, Leiweke told Rapino that the deal \u201callows us to tie up all owned and operated facilities to 10 year deals, develop a standard A and B market deal for all future projects and to convert all OVG 360 deals to TM now or as they expire for 10 years\u2026 Appreciate the consideration and partnership and all of us will work diligently on this so we are always aligned with TM.\u201d<\/p>\n

\n\tLive Nation responded to this claim in a statement: \u201cThe theory is that the contract gave Ticketmaster an unfair advantage in securing the business of independent venues that were managed by OVG because it creates financial incentives for OVG to \u2018advocate for\u2019 Ticketmaster. But there is nothing remotely anticompetitive about that. Commercial arrangements that involve incentive or marketing payments are common throughout this industry (and many others).\u201d The statement adds, \u201cTicketmaster competed and won the contract on the merits because OVG determined it was the best ticketing system available.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Department of Justice dropped a wide-ranging antitrust complaint against Live Nation on Thursday (May 23), highlighting more than a dozen examples of the company\u2019s \u201canticompetitive and exclusionary\u201d […]<\/p>\n","protected":false},"author":1,"featured_media":970,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[1360,294,594,1210,1361,1359,303,344,1206],"class_list":["post-969","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-boost","tag-case","tag-ceo","tag-emails","tag-governments","tag-includes","tag-lawsuit","tag-live","tag-nation"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/969","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=969"}],"version-history":[{"count":1,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/969\/revisions"}],"predecessor-version":[{"id":1014,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/969\/revisions\/1014"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/970"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}