Feds sue Live Nation and Ticketmaster for monopolizing concert industry

Washington — The Justice Department filed a federal lawsuit Thursday accusing Ticketmaster and its parent company Live Nation of illegally monopolizing the live entertainment industry to the detriment of concertgoers and artists alike.

In a 128-page civil suit filed in U.S. District Court for the Southern District of New York, federal officials allege that Live Nation has illegally thwarted competition and unduly burdened consumers in part through its ownership of Ticketmaster, effectively giving it control over much of the market for live entertainment.

Justice Department officials said Thursday they are seeking structural changes to how the company does business, which could include breaking apart the two entities.

“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” Attorney General Merrick Garland said in a statement. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”

The lawsuit

According to the suit, Live Nation owns more than 250 venues and manages about 60% of concert promotions at major venues nationwide. The company operates approximately 80% of all major entertainment ticket sales via Ticketmaster, the department said.

Joined by 29 states and the District of Columbia, the federal suit accused the entertainment giant of blocking innovation in the ticketing industry by establishing what officials referred to as a “self-reinforcing ‘flywheel,'” using its various business components to capture all fees associated with concerts.

This flywheel, according to the complaint, allows the company to charge customers fees, and then use that revenue to attract major artists and lock them into longer-term deals to sell more tickets.

“Live Nation’s monopoly, and the anticompetitive conduct that protects and maintains its monopoly, strikes a chord precisely because the industry at stake is one that has for generations inspired, entertained, and challenged Americans,” the complaint says. “Conduct that subverts competition here not only harms the structure of the live music industry and the countless people that work in that industry, but also damages the foundation of creative expression and art that lies at the heart of our personal, social, and political lives.”

The move against Live Nation and Ticketmaster comes after a years-long investigation by the Justice Department’s antitrust division. Ticketmaster came under withering criticism for its mishandling of ticket sales for Taylor Swift’s The Eras Tour in 2022. CBS News confirmed the Justice Department began looking into the company before that episode.

Taylor Swift fans show their Ticketmaster queue from the parking lot outside of a concert at Lincoln Financial Field in Philadelphia on May 13, 2023.
Taylor Swift fans show their Ticketmaster queue from the parking lot outside of a concert at Lincoln Financial Field in Philadelphia on May 13, 2023. Rachel Wisniewski/For the Washington Post

In 2010, federal regulators, including those at the Justice Department at the time, approved the merger of Live Nation and Ticketmaster, which ultimately allowed the promotional, venue and ticketing industries to be brought under the control of one corporation. 

Thursday’s lawsuit, however, says the relationship has since hurt American consumers and presents barriers to artists. Senior Justice Department officials alleged that Live Nation and Ticketmaster worked to unlawfully squeeze consumers for money even after artists get paid, through what they characterized as monopolistic intermediaries.

According to the complaint, Live Nation has strong-armed businesses with financial retaliation if they engage with its competitors and has wielded its control over the market by threatening to pull future events if venues opt not to use Ticketmaster exclusively. 

Such control, the Justice Department said, has meant concertgoers pay more for tickets and touring artists sign long-term agreements to solely perform at venues that use the ticket-selling program. 

CBS News has reached out to Live Nation for comment on the Justice Department’s suit.

At a Senate hearing in January 2023, artists testified about the hold Live Nation had over them. Clyde Lawrence, of the band Lawrence, testified that Live Nation’s power lies in the fact that it’s the promoter, the venue and the ticket company. 

“Because Live Nation owns the venue, fronts the money for the show and sells the tickets, they have outsized power when negotiating with artists,” he told the panel, offering an example: For one show, Lawrence set ticket prices at $30. After Ticketmaster added a 40% fee, fans paid $42 per ticket. And after paying for facility costs, the band made $12 per ticket — about half of which went to covering the costs of touring.

Original CBS News Link</a