On Friday (12/13), news broke that the U.S. Justice Department was preparing to take legal action against concert promoting giant Live Nation. Now, less than a week later, the two have reached a settlement that clarifies the rules the company must follow when dealing with venues.
According to the Wall Street Journal, the Department of Justice was accusing Live Nation of disobeying the rules of their 2010 Ticketmaster merger agreement. The agreement, set up so the merger would comply with the department’s antitrust division’s requirement that they “keep consumer prices in check by preserving competition in the music and ticketing industries,” required that Ticketmaster had to license its proprietary software to a competitor, sell off one of its ticketing units and, most importantly, agree not to retaliate against venues if they use a competing ticket seller (the “consent decree”).
Department of Justice antitrust division assistant attorney general Makan Delrahim claims that Live Nation violated this decree, finding five instances of the company threatening clients with rerouting tours if they didn’t renew their contracts with Ticketmaster.
While Live Nation Chief Executive Michael Rapino has said in the past that the company works with venues that are “right for our business,” giving some credence to the Department of Justice’s reasons for investigation, the company contends that they have done nothing wrong.
Government officials have been concerned over Live Nation’s stronghold on the live event and ticketing market and pressing the Department of Justice to do something about it. Back in September, a bi-partisan group of congressmen sent a letter to the Department of Justice over concerns about the company’s behavior, specifically its effect on ticket prices. Said the letter, “Our constituents are facing significantly increased live event prices and a lack of meaningful alternatives to purchase tickets to live events.” Democratic Senators Amy Klobucher and Richard Blumenthal have also been urging the Department of Justice to investigate. Said Senator Klobuchar in a statement, “Live Nation’s dominance in the sector raises serious antitrust concerns. I’m glad that the Department of Justice is preparing to take action.” In a separate tweet, she elaborated, “Americans purchase millions of tickets each year and shouldn’t be forced to pay sky-high prices because of unchecked consolidation in a broken ticketing industry,” Klobuchar wrote in the tweet. “I’ve called for accountability and I’m glad it’s happening.”
The original consent decree was slated to lapse in July 2020, which the congressional letter argued would leave Live Nation’s dominance in the live event and ticketing industries “virtually unchallenged.”
Live Nation’s role in the secondary ticket market is also being looked into by the Department of Justice, as their dominance in the primary market is bleeding into dominance in this new field. The site has been trying to draw business away from sites like StubHub and SeatGeak by attempting to keep their primary tickets off of sites other than theirs.
As it turns out, legal action will not be needed, or at least won’t be happening in the near future. On Thursday (19), it was announced that Live Nation and the Department of Justice came to an agreement that would revise and update the terms of the consent decree. “We have reached an agreement in principle with the Department of Justice to extend and clarify the consent decree,” said Live Nation in a statement reported by Billboard. “We believe this is the best outcome for our business, clients and shareholders as we turn our focus to 2020 initiatives.”
According to the settlement, which has now been extended through 2025, the company’s ban on threatening retaliation on venues has been tightened and Ticketmaster cannot discuss content bundles with venues or if Ticketmaster venues get preference.
This doesn’t mean that Live Nation doesn’t still have discretion when booking tours. As par the original agreement, they can still legally route tours to their Ticketmaster venues and can’t be forced to book shows at those not run by non-Ticketmaster affiliates. Much to the chagrin of those that wanted to see real change, that does not change under the settlement. Instead, Live Nation will get to continue its dominance in the live event market without much consequence.