The U.S. Division of Justice is suing to interrupt up Reside Nation, the dad or mum firm of Ticketmaster, over alleged antitrust violations.
The lawsuit, joined by 30 states and filed Thursday, follows a DOJ investigation into whether or not Reside Nation maintains a monopoly within the ticketing trade, a probe launched in 2022 and bolstered by fan complaints following a botched roll out for tickets to Taylor Swift’s Eras tour.
“We allege that Reside Nation depends on illegal, anticompetitive conduct to train its monopolistic management over the stay occasions trade in the USA at the price of followers, artists, smaller promoters, and venue operators,” mentioned Legal professional Normal Merrick Garland in a press release. “The result’s that followers pay extra in charges, artists have fewer alternatives to play concert events, smaller promoters get squeezed out, and venues have fewer actual decisions for ticketing companies. It’s time to break up Reside Nation-Ticketmaster.”
Shares of Reside Nation have been down 6% Thursday.
In a press release, Reside Nation mentioned the DOJ’s allegations of a monopoly are “absurd.”
“The DOJ’s criticism makes an attempt to painting Reside Nation and Ticketmaster as the reason for fan frustration with the stay leisure trade. It blames live performance promoters and ticketing corporations—neither of which management ticket costs—for prime ticket costs. It ignores every little thing that’s truly accountable for increased ticket costs, from rising manufacturing prices to artist recognition, to 24/7 on-line ticket scalping that reveals the general public’s willingness to pay way over major tickets price,” mentioned Dan Wall, Reside Nation govt vice chairman for company and regulatory affairs.
Venue dominance
Reside Nation and Ticketmaster merged in 2010, making a dominant entity within the stay occasion trade. The corporate instantly manages greater than 400 artists, controls round 60% of live performance promotions at main live performance venues, operates and manages ticket gross sales for stay leisure globally and in addition owns and operates greater than 265 leisure venues in North America, together with greater than 60 of the highest 100 amphitheaters, in response to the DOJ lawsuit.
Via Ticketmaster, Reside Nation controls roughly 80% or extra of main live performance venues’ major ticketing for concert events, the criticism mentioned.
“Taken individually and regarded collectively, Reside Nation’s and Ticketmaster’s conduct permits them to use their conflicts of curiosity — as a promoter, ticketer, venue proprietor and artist supervisor — throughout the stay music trade and additional entrench their dominant place,” the criticism reads.
U.S. Legal professional Normal Merrick Garland takes questions from reporters throughout a information convention on the Division of Justice Constructing on Might 23, 2024 in Washington, DC.
Kent Nishimura | Getty Photos
The Justice Division lawsuit, filed within the U.S. District Court docket for the Southern District of New York, accuses Reside Nation of violating the Sherman Act and sustaining a self-reinforcing enterprise mannequin by capturing charges and income from live performance followers and sponsorships, which it then makes use of to lock artists into unique promotion offers that give the artists entry to key leisure venues throughout the nation. Reside Nation then makes use of that dominance to lock new live performance venues into long-term exclusionary contracts, thereby restarting the cycle, the lawsuit claims.
Reside Nation can also be accused of threatening monetary retaliation in opposition to potential rivals and venues that work with rivals; strategically buying smaller and regional aggressive threats for the aim of rising their aggressive moat; and exploiting a relationship with venue companion Oak View Group, flipping the latter’s contracts over to Ticketmaster and discouraging competitors in live performance promotions.
The lawsuit claims that Reside Nation has discouraged bidding wars for artists and has unlawfully pressured artists into signing on for promotional companies in the event that they wish to use the corporate’s venues, at instances sacrificing income it might probably earn as a venue proprietor by preferring to lets its venues sit empty somewhat than have artists with different promotional contracts.
“In its personal phrases, Reside Nation makes use of its exclusionary conduct as a ‘hedge in opposition to vital enhancements by the competitors or perhaps a new competitor.’ However the price of that hedge is one which all of us pay, for instance a damaged ticketing web site with substandard customer support that also captures your precious information,” Assistant Legal professional Normal Jonathan Kanter mentioned throughout a press convention.
“It’s by means of these unique ticketing preparations that Individuals face the dreaded Ticketmaster tax, the seemingly infinite set of charges satirically named service payment or comfort payment when they’re something however,” Kanter mentioned.
Ticket costs
Reside Nation made headlines final 12 months when a surge of demand from 14 million customers, together with bots, for Taylor Swift live performance tickets led to web site disruptions and sluggish queues. A Senate subcommittee issued a subpoena to Reside Nation and Ticketmaster in November 2023, following a months-long probe prompted by the exorbitant inflated ticket costs in Swift’s Eras tour.
Steep costs for the U.S. exhibits led scores of followers to hunt out tickets to Swift’s tour in different international locations, which may very well be usually be cheaper even after worldwide air journey.
“In different international locations the place venues are usually not certain by Ticketmaster’s unique ticketing contracts, venues usually use a number of ticketing corporations for a similar occasion and followers see decrease charges and extra progressive ticketing merchandise in consequence,” Garland mentioned in a press convention.
Reside Nation mentioned Thursday it would not profit from monopoly pricing, saying that Ticketmaster service fees “are not any increased than elsewhere, and incessantly decrease.” The corporate famous its total internet revenue margin is on the low finish of S&P 500 corporations.
Reside Nation additional argued the lawsuit will not scale back ticket costs or service charges. It mentioned artist groups set costs for his or her tickets and the venues set and hold nearly all of ticket charges.
“Some name this ‘anti-monopoly’, however in actuality it’s simply anti-business,” Reside Nation’s Wall mentioned. “There is no such thing as a authorized foundation for objecting to vertical integration on these grounds.”
Reside Nation earlier this month reported its “greatest Q1 ever,” citing first-quarter income that was up 21% from the prior-year interval.
The corporate has additionally been within the public eye up to now 12 months over transparency points concerning hidden charges in ticket pricing.
