The fallout from the Astroworld Festival continues for Live Nation Entertainment, which was among those targeted by a massive lawsuit announced this week seeking $750 million in damages. Beyond that and hundreds of other lawsuits already filed in the wake of the tragedy that saw hundreds injured in a crowd “surge” and ten deaths, the industry giant is facing a reckoning of its past and practices in an industry where it holds an enormous share of the business.
Filed by Houston attorney Tony Buzbee, who represents more than 120 clients and has plans to expand that group in coming weeks, the massive lawsuit targets a slew of those who “stood to make millions from Astroworld and will share legal blame in a court of law,” according to Buzbee. Beyond Travis Scott, Drake, and Live Nation, Buzbee’s suit names the Harris County Sports & Convention Corporation as well as Apple Music and Epic Records as defendants.
It claims that those entities were well aware of Scott’s past history of inciting crowds to disregard security and put profit over safety, amounting to gross negligence. It claims that Scott and Drake refused to end the show even as ambulances were making their way towards the injured, and “Indeed, rather than end the concert, [Drake] continued, and then after went for a party at Dave & Buster’s, and then to a strip club where he spent more than $1 million,” at alleges.
The full complaint is available in coverage from Houston Press.
Beyond the hundreds of consumer civil actions it will be facing over Astroworld, Live Nation Entertainment has seen a surge in scrutiny over its overall business model as a potential reason for how things in Houston went so poorly.
Longtime Live Nation Entertainment critic Rep. Bill Pascrell renewed his calls for action to break up the company, arguing that its monopolistic sway over the live entertainment business needed to end in order to avoid tragedies that take place when a company places profits over people. Under the headline “The Astroworld Tragedy is a Story of Corporate Power,” David Dayen agreed with that sentiment in a piece for Prospect.org.
This is a vertically integrated operation, where Live Nation often manages the artist, runs the venue, sells the tickets, and promotes the concert all at once. Now, ask yourself just how much emphasis the company really needs to put on safety, given its dominance of the industry. If there’s a tragedy, will they credibly lose any market share? Will Ticketmaster no longer be the broker for that tour? Will the venue no longer work with Live Nation acts? There’s simply no possibility of disciplining Live Nation from a market forces standpoint for skimping on safety.
His argument that the market may not be able to correct even an egregious record of safety lapses at live events, which Live Nation arguably has, stands up, given that its stock price has barely dipped in the wake of the tragedy. After hitting an all-time record high of 123.8 as of the market closing on Friday, November 5 (after a strong earnings report for Q3) Live Nation Entertainment stock (NYSE: LYV) has only slightly dipped – falling to $112.32 per share by the end of last week and standing at $115.10 as of the market’s close on Wednesday.
That’s nearly 33 percent higher than the stock traded at six months ago, almost three and a half times what the stock fell to in the immediate aftermath of the global shutdown of live events due to COVID in 2020.
Despite that minute dip, a number of law firms have floated the concept of shareholder lawsuits over the losses incurred by investors in LYV over their alleged negligence at Astroworld. Rosen Law Firm announced an investigation to that end just days after the tragedy, arguing that the company may have “issued materially misleading business information to the investing public.” Other firms that have issued similar notices include Bronstein, Gewirtz & Grossman and Johnsson Fistel, but it is unclear whether those will amount to much of anything.
Live Nation has historically proven very adept at dodging bullets when it comes to both criticisms of its business operations and consumer issues. In one notable instance, Live Nation was sued by a competitor, which alleged it had illegally accessed its systems to gather intelligence to use against it. After this information was shared among senior management and used to poach its clients, Live Nation simply purchased what was left of that company and settled the lawsuit. Later, Live Nation avoided prosecution for the hacking crimes that later came to light by paying a $10 million fine. Scrutiny from the Department of Justice over allegations of major violations to a consent decree entered when it merged with Ticketmaster turned into a slap on the wrist – extension of the consent decree rather than meaningful action taken.
Indeed, in the wake of the tragedy in Houston, one major investor has already upped its stake in LYV, as Melvin Capital purchased more than 8 million new shares last week, upping its stake to 6.1 percent of the company’s outstanding stock.
Only time will tell if the Astroworld tragedy will turn into any meaningful damage for the Live Nation Entertainment empire long-term. Thus far, the storm seems to have been weathered with minimal issue, at least in terms of share prices – but few companies have ever had as much negative attention on them at one time as the Beverly Hills giant does right now.
Last Updated on November 17, 2021