Agencies seek to split the company, saying exclusionary conduct harms consumers, artists, and venue owners.

The Antitrust Division of the Justice Department and 30 state attorneys general sued Live Nation Entertainment Inc. and its wholly owned subsidiary, Ticketmaster LLC (collectively “LNT”), in the Southern District of New York on May 23 for illegal monopolization and exclusionary conduct that has allegedly harmed competition in the live entertainment industry.

The much-anticipated suit formally kicks off the effort of federal and state antitrust law enforcers to unwind the 14-year-old merger of the two biggest players in their respective markets: concert production/promotion and ticketing (U.S., et al. v. Live Nation Entertainment Inc. and Ticketmaster LLC, No.1:24-cv-03973. S.D.N.Y.; Read our previous post).

Citing violations of Section 1 of the Sherman Act (re exclusive dealing and tying), Section 2 of the Act (the anti-monopoly section), and state antitrust laws, the complaint seeks structural relief that would generally restore competition in the industry. Specifically, relief would, the complaint says:

• Lower barriers for competitors to enter the market.
• Create more ticketing options for consumers and venues.
• Reduce ticket prices, which have increased 34% since 2018.
• Restore innovation in ticketing and payment technologies.
• Wrest control Ticketmaster has over the primary and secondary ticketing markets.
• Break the control Live Nation has over performers, venues, and independent promoters.
• Increase opportunities for all working artists to perform at venues and for the venue owners to host them.

A Broken Industry, a Flywheel Model

“The live music industry in America is broken because Live Nation-Ticketmaster has an illegal monopoly,” said Assistant Attorney General Jonathan Kanter, head of the Antitrust Division. “Our antitrust lawsuit seeks to break up Live Nation-Ticketmaster’s monopoly and restore competition for the benefit of fans and artists.”

LNT’s exclusionary practices fortify and protect its “flywheel” business model, a self-reinforcing paradigm in which LNT “captures fees and revenue from concert fans and sponsorship, uses that revenue to lock up artists to exclusive promotion deals, and then uses its powerful cache of live content to sign venues into long-term exclusive ticketing deals, thereby starting the cycle all over again,” DOJ said in a statement. “Live Nation-Ticketmaster’s anticompetitive conduct creates even more barriers for rivals to compete on the merits.”

LNT, which owns or controls more than 265 concert venues in North America, including more than 60 of the top 100 U.S. amphitheaters, allegedly engages in anticompetitive tactics, including:

• Exploiting its relationship with sports venue management company Oak View Group, a “potential competitor-turned-partner” which avoids bidding against LNT for performers and influences venues to sign exclusive agreements with Ticketmaster.
• Financially threatening and retaliating against potential new competitors in the concert promotion market.
• Threatening and retaliating against venues that work with LNT concert promotion competitors. As a result, venues choosing another promoter or ticketer face the risk that TNT will take action to deny the venues concerts, revenue, and fans.
• Locking venues into long-term exclusive contracts so venues cannot use rival ticketers, even if rival technology is superior.
• Forcing exclusive contracts on venues preventing them from using multiple ticketing services, conduct that thwarts the emergence of new promotions and ticketing competitors and creative new business models.
• Restricting artists’ access to venues by acquiring the properties outright, forming partnerships with venue owners, or executing anticompetitive agreements with these properties. Artists must use LNT’s promotion services to perform at these venues.
• Acquiring smaller and regional competitors when LNT’s stronghold is threatened, harming competition and reducing artist compensation.

The dominant player in this space, LNT generates more than $22 billion globally from concert promotion, venue management, music festival production, ticketing, and sponsorship and advertising. Ticketmaster is by far the largest concert ticketing company in the United States, many times the size of its closest competitor.

To illustrate LNT’s power and the impact of its conduct, even its biggest competitor – a formidable enterprise in its own right – fears losing concerts if it does not use Ticketmaster.

Anschutz Entertainment Group (AEG), with $7.6 billion in revenues, has a 30% stake in Anschutz Spectacor Management (ASM), which manages more than 30 arenas in the United States. ASM was formed in 2019 with the merger of AEG Facilities and Spectacor Management Group (SMG). Before the merger, SMG had an exclusive deal with Ticketmaster; AEG Facilities had an exclusive with the AXS ticketing platform. AEG wanted AXS as the exclusive primary ticketer for the new ASM company, which AEG partially owned. But ASM majority shareholder Onex, a Canadian investment management company, worried that Live Nation would retaliate by withholding shows from ASM venues unless they used Ticketmaster. In the end, AEG was forced to use Ticketmaster despite AEG’s ability to provide an alternative ticketing platform.

Markets and Tentacles

Saying LNT has its “tentacles in virtually every aspect of the live entertainment industry,” the complaint describes the following antitrust markets this way:

• Primary Ticketing Services Markets – Primary ticketing providers offer a variety of services to two distinct sets of customers: major concert venues and fans. The particular products and services offered to and the competitive conditions faced by these two customer groups are distinct but related.
• Concert Promotions Services Markets – Concert promoters similarly offer a variety of services to two distinct sets of customers: major concert venues and artists. The particular products and services offered to and the competitive conditions faced by these two customer groups are distinct but related.
• Artist Use of Large Amphitheaters – Owners, operators, and exclusive bookers of large amphitheaters offer artists the use of large amphitheaters for their shows. The provision of the use of large amphitheaters and ancillary services to artists for large amphitheater tours is a relevant market.

Joining the DOJ are AGs from Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.