On May 16, 2012, Live Nation and Clear Channel announced that the global class action lawsuit that has plagued the two companies for the past ten years has finally reached a settlement.
The original class action lawsuit, filed in 2002 by Malinda Heerwagen, alleged that Live Nation and its then parent company Clear Channel maintained a monopoly on the live-music concert industry. The initial suit was followed by 22 similar class action lawsuits filed throughout the country. The various suits were later consolidated into a single suit in 2007, which has been pending in the Los Angeles, CA federal court system.
While it is unknown what prompted the settlement, speculation has pointed toward a recent ruling by the judge, barring the testimony of the plaintiff’s expert witness Dr. Owen Phillips. As the case was based upon the argument that Live Nation and Clear Channel gained a monopoly of the concert industry and participated in anticompetitive conduct in their promotion of their concerts, it was expected that Dr. Phillips’ testimony was to be used to bolster that argument through evidence that tickets to Live Nation events were priced higher than tickets to other similar events.
Dr. Phillips had used these allegedly inflated ticket prices to calculate the various monetary damages for the various major city markets. According to The Hollywood Reporter, examples of the calculated damages — calculated by multiplying the number of tickets sold in a market for an event by the price of the tickets — include “$21 million in damage in the Denver market and nearly $71 million in damage in the LA market.”
While having a finite dollar amount for damages is extremely beneficial in a class action suit, the judge was not swayed by Dr. Phillips’ method of calculation. Finding that the presence of higher ticket prices to Live Nation concerts was not a definitive sign of a monopoly, and that there could be other valid reasons for the ticket prices — including that Live Nation artists have sufficient popularity to demand higher prices from the market — the judge made the ruling to bar Dr. Phillips’ testimony.
In addition to the set-back with their expert witness, the class action plaintiffs had also been unable to define the exact area of Live Nation’s concert empire that was the subject of the monopoly claim. The Hollywood Reporter stated that the report of Dr. Phillips referenced “live rock music concerts,” but failed to state what genre(s) of music such a tag encompassed. Combined with the previous issues with the calculations presented by the plaintiffs, these elements led the judge to grant Live Nation and Clear Channel’s motion for summary judgment, a legal ruling that dismisses a case for a failure to state a legal claim on which relief may be granted.
As is normal for large class action cases, the terms of the settlement have not been publically released. The only statement regarding the settlement came from court filings by Live Nation. In the document, the music giant stated that “[t]he parities in all 22 actions have reached a global settlement agreement, which is in the process of being finalized.” Information is expected to be forthcoming regarding how to claim a share of the settlement.