In its lawsuit accusing Stay Nation Leisure, the live performance behemoth that owns Ticketmaster, of being an unlawful monopoly, the Justice Division drew on a raft of inside communications that provided a uncommon behind-the-scenes take a look at the business.
The Justice Division argued in an in depth criticism filed on Thursday that the merger of Stay Nation and Ticketmaster, which went by means of in 2010, had damage competitors, hindered innovation and resulted in larger ticket costs and charges for customers. It referred to as for the corporate to be damaged up.
In response, Stay Nation, which can be the world’s largest live performance promoter, has stated that it’s not a monopoly, and denied that it has the unilateral energy to boost costs. Opposite to the federal government’s argument about its nice energy, Stay Nation says it now faces extra competitors than ever, and that the Justice Division’s go well with “gained’t cut back ticket costs or service charges.”
Detailing its allegations, the federal government relied on eye-opening emails that it says had been written by Stay Nation’s chief government, Michael Rapino, and different high-powered figures within the live performance world.
Listed below are a couple of of these accusations.
A possible rival’s Kanye West live performance
One episode from 2021 goes to the center of the Justice Division’s allegations that Stay Nation went to excessive lengths to guard its aggressive edge.
Late that yr, the federal government says, Stay Nation “threatened industrial retaliation” in opposition to the personal fairness agency Silver Lake, which had an funding in TEG, an Australian ticketing and promotions firm that was concerned in a extremely anticipated profit present by Kanye West and Drake on the L.A. Coliseum. Silver Lake had additionally invested in Oak View Group, a venue administration firm with shut ties to Stay Nation.
In keeping with the federal government, Rapino complained to an Oak View Group government that he seen TEG as a competitor, and Oak View Group relayed to the investor that Stay Nation was “not joyful.” Rapino then advised Silver Lake he was “all in” with Oak View Group, “the place the massive play lies with venues — why insult me with this funding in ticketing/promotions and so forth.”
TEG had organized a deal to promote some tickets by means of StubHub. In keeping with the criticism, Stay Nation sought to “frustrate” TEG by blocking these tickets, and because of this “a whole bunch of StubHub’s clients had been refused entry to the occasion.”
Stay Nation then “threatened to tug its assist from Oak View Group,” and Irving Azoff, the highly effective artist supervisor who was a co-founder of Oak View Group, refused to permit TEG to advertise reveals with any of the artists he managed. Azoff advised Rapino he would demand that Silver Lake promote TEG, and Rapino replied, “Love ya.” In keeping with the criticism, Silver Lake sought to promote TEG — and provided it to Stay Nation.
In a detailed response to the Justice Division’s lawsuit, Dan Wall, Stay Nation’s government vice chairman of company and regulatory affairs, stated the declare that Stay Nation had threatened Silver Lake “reveals not solely a disregard for the info, but in addition deep hypocrisy.”
Rapino’s criticism, Wall stated, was “basically the identical” as a priority by each the Justice Division and the Federal Commerce Fee over “personal fairness firms making a number of investments in the identical business due to aggressive ‘entanglements.’”
In a separate assertion concerning the live performance on the L.A. Coliseum, Stay Nation stated: “The one factor that we did was frustrate TEG’s efforts to place tickets straight on the secondary market in violation of our unique rights over major tickets.” Silver Lake didn’t reply to a request for remark.
A competitor turned ‘hammer’
Stay Nation, the federal government says, initially seen Oak View Group as one among its “Greatest Competitor Threats.” However quickly the businesses “colluded,” the federal government says, to “keep away from competing with one another, and chart a mutually useful marketing strategy to cement Stay Nation’s dominance.”
Oak View Group, the federal government says, operated as an “agent” for Stay Nation, even calling itself a “pimp” and a “hammer” for the bigger firm, generally delivering threats on behalf of Stay Nation to venues that had been contemplating dropping Ticketmaster for one more ticket supplier.
The federal government’s criticism quotes from what it says are emails from 2016 by which Rapino complains to Oak View Group executives about their intention to advertise reveals with an artist that Stay Nation works with. Oak View Group backs down, with the corporate’s chief government — who is just not recognized within the criticism, however is Timothy Leiweke — saying: “Our guys obtained a bit forward. All know we don’t promote and we solely do excursions with Stay Nation.”
Wall, the Stay Nation government, stated in response that Oak View Group “has by no means been a live performance promoter, nor aspired to be one,” and that it was merely seeking to fill the occasional darkish evening at one among its venues. “To painting that as an settlement to not compete in live performance promotion is farcical,” Wall wrote. A consultant of Oak View Group declined to remark.
A ticketing rival at Barclays Middle
In early 2023, The New York Occasions broke the information that Barclays Middle, the world in Brooklyn, was dropping SeatGeek, the younger and aggressive ticketing enterprise it had simply entered a seven-year contract with, and signing a brand new take care of Ticketmaster.
The abrupt change raised eyebrows within the business, and led to questions on whether or not Stay Nation had denied the venue entry to Stay Nation’s greatest excursions as retaliation for switching from Ticketmaster to SeatGeek. Stay Nation denied that on the time, and a evaluation of live performance knowledge by The Occasions was inconclusive. The variety of Stay Nation-promoted reveals at Barclays had certainly fallen since SeatGeek took over, however so had these by impartial promoters.
The Justice Division’s case omits Barclays’ identify from the go well with, however Wall confirmed it in a convention name with traders late Thursday. The federal government quotes from an electronic mail that it says was despatched to the venue’s chief government from “a senior Stay Nation government” who had heard the venue was switching to SeatGeek: “In any case,” the e-mail says, “ought to take into consideration larger relationship with LN not simply who’s writing a much bigger sponsorship test,” including a “wink” emoji.
In keeping with the federal government, Stay Nation “adopted by means of on its threats, re-routing concert events to different venues.”
In response, Stay Nation stated, “We categorically deny that any concert events had been rerouted to retaliate in opposition to their choice to go to SeatGeek.”
Shopping for rival firms
The federal government argues that Stay Nation has acquired quite a few firms with an goal to get rid of rivals in each live performance promotion and ticketing.
Among the many examples the federal government cites are United Concert events in Utah, which used a regional ticketing firm referred to as SmithsTix. In keeping with the what the federal government says had been inside communications at Stay Nation, the corporate wished a better ticketing foothold in Utah however selected to not purchase SmithsTix as a result of doing so would “require us to go to the DOJ.” As a substitute, Stay Nation purchased United Concert events in 2017 and transformed its venues to Ticketmaster; SmithsTix, it stated, in the end went out of enterprise.
One other is AC Leisure in Tennessee, which had performed an element within the Bonnaroo pageant there. Stay Nation took a controlling stake within the firm in 2016. A Stay Nation government seen the economics of the deal as “not tremendous thrilling,” however referred to as it “a defensive transfer” in opposition to AEG, in response to the criticism. In 2018, Stay Nation purchased Frank Productions, a promoter in Wisconsin that used ticketers aside from Ticketmaster; Stay Nation acquired the corporate and “flipped the venues to unique Ticketmaster contracts.”
In response, Wall stated the deal for AC Leisure was made with a promoter who was in his 60s and wished to retire. “Stay Nation didn’t have a Knoxville workplace, so for $15 million it made the deal,” Wall wrote. “Significantly? The DOJ is difficult that?”
