Live Nation Entertainment is reportedly making some last-ditch efforts to stave off an expected lawsuit from the Department of Justice, one that many believe will be aimed at breaking up its ownership of Ticketmaster.

Representatives of the entertainment giant, which has been hit by the regulator for regular violations of a consent decree it entered when the companies merged during the Obama Administration, have reportedly been meeting with DOJ officials – including antitrust chief Jonathan Canter – in a last-ditch bid to avoid the lawsuit, which could come in May or early June.

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The lawsuit is just one front of many that the company is facing, as consumers and lawmakers have grown increasingly fed up with the live event ticketing landscape, which has been dominated by the Live Nation and Ticketmaster conglomerate that links the largest live event promotor and the largest ticketing operation in the world. Many have claimed it operates as a monopoly, driving up prices for consumers and ruling the market with threats for those who do not play by its rules.

In its recent earnings report, Live Nation executive Joe Berchtold admitted that it was in discussion with the regulator, but repeated the company line that it breaks no antitrust laws, and doesn’t believe the DOJ has a right to break it up regardless.

“As we previously stated, the DOJ’s investigation appears to be focused on specific business practices, not the legality of Live Nation Ticketmaster merger or our overall business structure,” Berchtold said on the call. “Very little of the conduct that DOJ has raised with us relates to the combination of ticketing and promotion resulting from the merger. And most of what does, was anticipated and addressed by the consent decree allowing the merger to go forward. Based on the issues we know about, we don’t believe a breakup of Live Nation and Ticketmaster would be a legally permissible remedy.”

Such defenses are unlikely to work, according to a report from Bloomberg last week.

The Justice Department staff have recommended a suit against Ticketmaster, Live Nation’s ticketing arm, according to people familiar with the matter. Antitrust chief Jonathan Kanter — who makes the final decision — doesn’t favor settlements, especially not in this case, said the people, who asked not to be named discussing an ongoing investigation.

Beyond the investigation by the DOJ and potential antitrust legal fight, Live Nation Entertainment is also fighting significant battles in the legislative realm, both at the federal level and in numerous states. While consumers and lawmakers alike have regularly blamed Ticketmaster and its parent for the spiraling cost of event tickets, the company has maintained its position that it does no wrong, and that ticket resale is the source of all problems in live entertainment.

To that end, it has pushed hard for a regulatory climate that allows event promoters and venues to regulate the resale market through the weaponization of terms and conditions that allow those industry insiders to declare resale competitors as illegal.

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Such terms are the core of the Live Nation and “Fix The Tix” coalition-backed “Fans First” federal legislation. This bill, which the industry prefers over comprehensive overall ticket industry reform like the BOSS and SWIFT Act as well as the more focused on price transparency TICKET Act, was involved in a last-ditch attempt by one of its authors to see it backdoor-passed by attaching it as an amendment to the unrelated Federal Aviation Authority funding bill last week.

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The timing on that action – and the fact that Live Nation had been lobbying for the FAA bill before any action had been taken by Sen. Cornyn to add the ticketing bill as a Trojan horse – make it seem as if it may have been a last-ditch effort to get Live Nation’s legislation slammed through before the DOJ lawsuit is filed.

Beyond the question of whether or not a lawsuit will be filed in the coming weeks is the question of what things might look like in a realm where Ticketmaster is broken off of Live Nation (rather than a lawsuit that results in another slap on the wrist, like the 2019 enforcement of multiple violations of the consent decree by Live Nation resulted in).

For that, we can look at a recent analysis of the potential lawsuit and its outcomes published by Promarkets written by Diana Moss of the American Antitrust Institute.

A successful monopolization case against Live Nation that forces a divesting of Ticketmaster might not itself be enough, she writes. Ticketmaster would still be dominant in primary ticketing, and free to continue in its attempts to extend that dominance into the resale marketplace by making it impossible for independent third party resale marketplaces to compete via weaponized terms and conditions locking consumers to its own resale systems.

Given Ticketmaster’s high market share, however, even a breakoff may not be enough to fully restore competition in ticketing, especially in resale. Ticketmaster would remain dominant in primary ticketing and incentives to frustrate competition from resellers would remain intact. So, we could continue to see practices such as ticket holdbacks, slow ticketing, and delayed tickets that are designed to disrupt competition in resale and steer fans back to Ticketmaster.

The fix for this problem is to break up Ticketmaster into a number of smaller pieces, similar to the remedy in AT&T that created the Baby Bells.” More rivalry would create stronger incentives to compete on ticket fees, quality of service, protecting ticket buyers’ privacy and data, and improving ticketing platform technology.

But, it is a long way before anything even close to such a vision would be possible. Live Nation and its enormous legal and lobbying apparatus – led by a litigator who was a part of the DOJ effort to break up AT&T before he switched sides to defending alleged monopolies – will surely spare no expense in its battle to keep its currently dominant business model intact. As Moss notes in her analysis,

The wheels of antitrust enforcement turn slowly. Monopolization cases can take years to litigate. High burdens of proof to show monopoly power and practices designed to reinforce or extend that power make the government’s job in court even more challenging. But if ever there were a monopoly where evidence of harm is plentiful, it would be Live Nation-Ticketmaster. A conversation about potential fixes opens the door to what competitive markets for live events would look like, something that competition, fans, and artists surely deserve.

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