The U. S. Department of Justice, 29 claims and the District of Columbia sued Live Nation and its company, Ticketmaster, Thursday in the Southern District of New York, accusing the businesses of wielding dominant power to prevent competitors in the purchase of tickets. The government wants to see Life Nation and Ticketmaster separated, which were a rival up until they combined with Life Nation in 2010.
The sports-ticketing industry is a significant player in the competitive situation, despite the fact that the majority of the allegations relate to the concert industry.
The majority of the alleged misconduct is related to tickets and venues in the entertainment industry, particularly when it comes to how concertgoers purchase tickets and paid associated fees. The Justice Department accuses Ticketmaster and Life Society of using what it claims to be dominant market power. According to the DOJ, the company has the authority to stop potential competitors from rising, acquire rivals before they pose a real threat, cause venues to lose” concerts, revenue and fans” if they do n’t choose Live Nation and Ticketmaster as promotion and ticketing services, and compel venues to sign long-term exclusive contracts that prevents business with rivals.
When the DOJ portrays Life Nation and Ticketmaster as “promoter, ticketer, place landlord, and actor manager,” the rights of sports fans are primarily brought up in that context.
To that point, the DOJ views sports teams ‘ season ticket policies as key to understanding Live Nation’s “tentacles” in the primary ticketing services market. In this market, Live Nation allegedly harms “artists, venues, and fans” by suppressing competition.
Primary ticketers for major concert venues, the DOJ underscores, often “must provide support for distributing a team’s season tickets” when that venue also hosts sporting events. In other words, buying and selling tickets to live events is akin to purchasing game tickets.
Given that venues are expected to bundle sports and concert tickets, the DOJ has previously expressed concerns about the role of Ticketmaster and the sale of tickets to games, Sportico explained on Monday. This is not an isolated phenomenon, in 2010 the DOJ claimed that 66 major concert venues hosted pro teams, including those that sell season tickets.
Through Ticketmaster, Live Nation is described in Thursday’s complaint as a monopoly in primary ticketing services for major concert venues. With no rival ticketing higher than 14 %, Ticketmaster allegedly accounted for “at least 70 % of total face value associated with all tickets sold at large arenas and amphitheaters” in 2022. The DOJ claims that Live Nation uses this power to” threaten and retaliate” against venues that do n’t agree with its terms.
This alleged conduct, the DOJ insists, amounts to a violation of Section 2 of the Sherman Act. The Justice Department claims that Live Nation threatens to divert live music events to other venues, delays the sale of secondary tickets, and refuses to make public events when a venue employs a rival ticket buyer.
Other allegations of unlawful activity, including through exclusive dealing, are included in the complaint. There are 27 total claims, the majority of which are brought by states in violation of their antitrust laws. A jury trial is sought, monetary and injunctive relief demanded.
The outcome of the case could have significant implications for the sports industry and fans who enjoy attending games. The DOJ suggests that should it prevail, the sale of tickets would become more competitive, leading to lower prices, fewer fees and better customer service.
But the DOJ’s arguments will be aggressively challenged by Live Nation’s attorneys. Live Nation released a statement on Thursday that attacked the complaint as being inconsistent with basic logic and disregarding economic realities as a preview of legal defenses. The company says the DOJ might gain a” PR win” by calling Ticketmaster a monopoly, but empirical evidence shows” the bulk of service fees go to venues” and that” competition has steadily eroded Ticketmaster’s market share and profit”.
Live Nation’s portrayal of facts suggests that if the DOJ wins, consumers, artists and venues would be worse off. Sports and other entertainment services would be reshaped by a court in ways that might turn out to be haphazard and contrary to the market.
Unless a settlement is reached, anticipate the case to continue for several years.