View From The US: DOJ’s Ticketmaster-Live Nation Case Has Seats For Sports Fans

In this View From The US piece, Michael McCann , Legal Analyst and Senior Sports Legal Reporter of Sportico explains more about the US Department of Justice’s latest decision to breakdown on Live Nation and Ticketmaster.

The U.S. Department of Justice, 29 states and the District of Columbia sued Live Nation and its subsidiary, Ticketmaster, Thursday in the Southern District of New York, accusing the companies of wielding monopolistic power to thwart competition in the sale of tickets. The government seeks the separation of Live Nation from Ticketmaster, which until merging with Live Nation in 2010 was a rival.

While the bulk of the allegations center on the concert business, the sports-ticketing market plays a role in the antitrust case.

Most of the alleged misconduct concerns tickets and venues in the entertainment industry, especially in how concertgoers buy tickets and pay accompanying fees. The Justice Department accuses Live Nation and Ticketmaster of using what it depicts as monopolistic market power. The company wields that power, per the DOJ, to deny the rise of potential competitors; acquire rivals before they pose a genuine threat; cause venues to lose “concerts, revenue and fans” if they don’t pick Live Nation and Ticketmaster as promotion and ticketing services; and compel venues to sign long-term exclusive contracts that cuts off business with rivals.

The sports industry and the rights of sports fans mainly surface when the DOJ depicts Live Nation and Ticketmaster as wielding excessive control and exhibiting conflicts of interest as “promoter, ticketer, venue owner and artist manager.”

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, the sale of tickets to live concerts is linked to the sale of tickets to games.

As Sportico explained Monday, the DOJ has previously expressed concerns about the role of Ticketmaster and the sale of tickets to games given that venues are expected to bundle sports and concert tickets. 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. In 2022, Ticketmaster allegedly accounted for “at least 70% of total face value associated with all tickets sold at large arenas and amphitheaters,” with no rival ticketing more than 14%. The DOJ contends Live Nation uses this power to “threaten and retaliate” against venues that don’t agree to its terms.

This alleged conduct, the DOJ insists, amounts to a violation of Section 2 of the Sherman Act. That provision bars illegal monopolies, with the Justice Department arguing that Live Nation threatens to divert live music shows to other venues, delay the sale of secondary tickets and refuse to publicize shows when a venue uses a competing ticketer.

The complaint contains other allegations of unlawful activity, including through exclusive dealing. There are 27 total claims, most of which are brought by states under their antitrust laws. A jury trial is sought, monetary and injunctive relief demanded.

The sports industry and fans who like to attend games could have sizable stakes in the outcome of the case. 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. As a preview of legal defenses, Live Nation issued a statement Thursday blasting the complaint as betraying basic logic and ignoring economic realities. 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. Entertainment services—including sports—would be reshaped by a court in ways that might prove haphazard and inconsistent with the market.

Expect the case to last years unless a settlement is reached.