Entertainment giant Live Nation is currently at the forefront of an investigation by the Department of Justice over its alleged monopolistic practices with Ticketmaster. Now, the DOJ is probing Live Nation on whether or not it uses anticompetitive agreements with venues and artists, people familiar with the matter told the Wall Street Journal.
According to the WSJ, the probe is looking at any restrictions in the deals offered by Live Nation, including any agreements that restrict a venue to work with any other promoters or ticket services. The report notes that document retention letters were sent to talent agencies that arrange contracts between artists and promoters like Live Nation.
“We participate in competitive bidding for both artist and venue deals,” a spokesperson for Live Nation told the WSJ. “That competition has only increased in recent years, and we welcome any discussion on our specific business practices as this growing industry continues to evolve.”
The Taylor Swift ticketing fiasco last fall sparked the DOJ investigation after more than two dozen lawsuits were filed against Ticketmaster and Live Nation, claiming that the pair “engaged in fraud, price fixing, antitrust violations, and even ‘intentional deception.'” Following the news, 31 House Democrats signed a letter addressed to Attorney General Merrick Garland, asking for the DOJ to open a formal investigation into the Live Nation-Ticketmaster merger in 2010.
However, according to The Hollywood Reporter, Live Nation President and CFO Joe Berchtold downplayed the scale of the DOJ investigation, noting that he believes the DOJ is investigating certain business practices of the company — like all-in pricing and venue exclusivity — rather than the merger itself. He said that “our fundamental business model is not really being questioned,” noting that the companies are “both pro-competitive and pro-consumer.”
Live Nation and Ticketmaster are acting as venue owners and operators, ticket sellers, and promoters simultaneously. The companies have regularly been accused of anti-competitive practices, fueled by its overwhelming market share.
In a Senate Judiciary Committee hearing examining the ticketing and live events industry in Washington, D.C. in January, SeatGeek CEO Jack Groetzinger discussed the decision by Brooklyn’s Barclays Center to switch back to Ticketmaster after just a year of using SeatGeek as its official ticketing provider. He said that the venue’s leadership was weary that Live Nation would send shows to other venues in the New York market over their own.
“The only way to restore competition in this industry is to break up Ticketmaster and Live Nation,” Groetzinger told the committee.
Then, another hearing was held by the Senate Judiciary’s Subcommittee on Competition Policy, Antitrust, and Consumer Rights, which looked at “Trends in Vertical Merger Enforcements.” Legislators like Sens. Amy Klobuchar (D-MN) and Mike Lee (R-UT) delved into the company’s market power.
“[The Live Nation and Ticketmaster merger] has decimated competition in the ticketing industry and resulted in higher fees for consumers,” Sen. Klobuchar said in her opening statements. “Unfortunately, this is not a surprising result. At the time of the merger, DOJ was so concerned that something like this might happen, that it made Live Nation promise not to retaliate against concert venues for using another ticketing company. But guess what? That didn’t work.”
A report from Politico earlier this year noted that Live Nation and Ticketmaster could be facing an anti-trust lawsuit “that claims the entertainment giant is abusing its power over the live music industry,” a source close to the investigation said. However, the report clarified that nothing is certain at this time.
While the DOJ previously investigated Live Nation/Ticketmaster on anti-trust grounds over the last five years, the company was only hit with a slap on the wrist.
