Officials with the Justice Department's Antitrust Division plan to sue Live Nation after completing a two-and-a-half-year investigation into the company, according to two high-level sources with knowledge of the matter.
The lawsuit will target Ticketmaster's use of exclusive venue contracts for its ticketing services, the sources said. Last week, Live Nation officials met with attorneys from the Department of Justice to discuss the case, including DOJ Assistant Attorney General Jonathan Canter, but neither the DOJ nor Live Nation would comment on the details of the meeting. There is no clear timeline for when the DOJ plans to formally close its investigation or file a lawsuit, and the two sides could meet again to discuss the case. Both The Wall Street Journal and Politico have previously reported that the DOJ planned to sue Live Nation in published reports earlier this year.
Live Nation officials continue to cooperate with the investigation, company president Joe Berchtold indicated in an earnings call on May 2. Based on the issues the Justice Department raised with Live Nation, Berchtold said he believes the lawsuit relates to “specific business practices at Live Nation” and “not the legality of the Live Nation/Ticketmaster merger.”
That's both good and bad for Live Nation officials. On the one hand, if the merger isn't central to the government's case, then ending the merger and breaking up the company probably isn't on the table — at least according to Berchtold. Alternatively, if the government believes that the company's use of exclusive ticketing contracts with venues is monopolistic, it could propose an even stiffer penalty.
That's because politicians like the Senator Amy Klobuchar (D-Minn.), who chairs the Senate antitrust subcommittee, have whittled Ticketmaster's market share down to 70-80% of the top 100 highest-grossing theaters, stadiums and arenas in North America. Klobuchar has repeatedly said she believes Ticketmaster uses exclusive contracts to lock in market share. Instead, Ticketmaster lawyers and industry advocates have argued in the past that the exclusive nature of these deals benefits venues because it simplifies the ticketing process for consumers and generates significant revenue for venues that wouldn't earn without an exclusive deal.
DOJ officials are also expected to argue that Live Nation has illegally abused its power in the concert industry to raise ticket prices over the past decade, in part through surcharges that can add up to 30% to ticket prices .
But officials at Ticketmaster, which Live Nation controls, they have long been at odds that artists set their ticket prices, not Ticketmaster, and that only a small percentage of fees collected above face value go to the ticket company, with the vast majority of those funds going to venues to cover expenses of a concert.
The government also bears the burden of showing why proposed remedies — such as forcing Live Nation to sell its stake in Ticketmaster — would benefit consumers.
Simply being named in an antitrust lawsuit filed by Kanter has the potential to significantly damage Live Nation's reputation and finances. A detailed lawsuit against her could galvanize critics of the company behind a narrative that claims the concert group is acting monopolistically and abusing its power, undoing the company's efforts in recent years to improve its image and destigmatize its business model.
A lawsuit would likely have a negative impact on the company's stock price and would be a major distraction for Live Nation, when it would otherwise focus on strategic expansion after its most successful financial year ever, with revenue up 36% from the previous year and an impressive adjusted net income of $1.8 billion.
Instead, Live Nation can face the full weight of America's top law enforcement agency, which this year has taken on companies like Apple and Google with market capitalizations each 100 times that of Live Nation. While Kanter's efforts against these companies have been applauded by powerful allies, including Sen Amy Klobuchar (D-Minn.). In December 2022, a judge rejected DOJ efforts to block a merger between security firms Booze Allen Hamilton and Everwatch as well as mergers between UnitedHealth Group and Change Healthcare, US Sugar Corp and Imperial Sugar, Meta and Within, and Microsoft and Activision.
Kanter also lost a major ruling in the Justice Department's antitrust case against Google earlier this year, when a judge rejected a request to bar the tech giant from presenting evidence that activities the government had deemed anticompetitive also had positive properties that improved the product and generated positive feedback from consumers.
“If the government can tip the scales and prevent courts from considering pro-competitive outcomes, the government could win every case by default,” he wrote. Sean Heathersenior vice president at the US Chamber of Commerce, in a recent post on the Google case.
Google's lawsuit, which deals with ongoing business practices at the company as opposed to the merger, could be a litmus test for a yet-to-be-filed lawsuit against Live Nation. In Google's case, the government claims the company controls 90% of the online search advertising market by paying billions of dollars each year to companies like Apple and Samsung to be the default search engine on their computers and smartphones.
While Live Nation officials are confident they can prevail in the upcoming antitrust case, they will do so with far fewer resources than other companies that have gone before the Justice Department in recent years. Live Nation's market capitalization is currently $22 billion, while Google and Apple's combined market capitalization is $6.7 trillion, making Live Nation one of the smallest companies in decades to be the subject of such a lawsuit.
Live Nation declined to comment for this story. The Justice Department did not respond to requests for comment.
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