Federal Government and 30 States File Lawsuit to “Break Up Live Nation”
A major anti-trust lawsuit filed by the U.S. Department of Justice and nearly 30 states could potentially alter the concert-going landscape for the better, as officials are now suing to break up Live Nation and Ticketmaster.
Originally reported by Bloomberg, the lawsuit filed in the Southern District of New York alleges that the company’s grasp on many key aspects of the live music industry has hurt consumers in recent years by causing ticket prices to skyrocket while also harming artists. As a result, U.S. Attorney General Merrick Garland said it was high time that something was done to rein in the company.
“It is time to break up Live Nation.”
Officials allege that Live Nation and Ticketmaster’s monopolistic hold on the space created an environment where venues were often left little choice but to enter into long-term exclusivity deals with the company. In fact, the Department of Justice argues in the suit that the company’s reach means it was able to “insert themselves at the center and the edges of virtually every aspect of the live music ecosystem.”
The lawsuit states that Live Nation has direct ties to more than 400 artists while also controlling approximately 60% — more than 265 — of North America’s major venues. Meanwhile, Ticketmaster handles around 80% of major venues’ ticketing process. As a result, the lawsuit alleges that venues often worry that they’ll lose out on concerts and potential revenue streams if they don’t work with the company.
With all of those facts in mind, officials say that means the Live Nation-Ticketmaster structure constitutes a grossly unfair monopoly.
“It is well understood across the live concert industry, as a result of Live Nation’s historical conduct and exactly as Live Nation intended, that choosing ticketers other than Ticketmaster carries enormous risk and financial pain.”
If you don’t think the government could potentially breakup the concert giant, then you’re probably not old enough to remember the Bell System breakup of 1982 when AT&T was broken up into smaller, regional companies throughout the country. The problem with AT&T then is similar to the problem with Live Nation now: vertical integration.
Vertical integration is when a single company controls different parts of the supply chain in a specific industry. The Bell System ran local phone services, it was the country’s only long-distance provider, it handled all international calls in the country, and it manufactured the actual phones and cables.
If the DOJ manages to break up the company, it could mean that various aspects of the concert experience supply chain would start to be handled by different companies, which would likely lower ticket prices so you won’t need to sell a kidney the next time you want to go to see a big-name metal act.
It’s wild to remember that the Live Nation-Ticketmaster merger happened 14 years ago and only really became a major source of public outcry after the company botched the rolls out for Taylor Swift tickets back in 2022.
It’s also amazing to think that when the merger went through back in 2010, the government was already worried that the move was a potential anti-trust violation. At the time, the government allowed the merger to go through as long as it didn’t tie its services together or retaliate against venues or artists that didn’t use their services. Nine years later, the Justice Department said that promise had been broken, but agreed to a settlement with the company that required that a third party monitor keep an eye on the company’s actions to make sure it didn’t run afoul of the government’s guidelines.
We’ll keep an eye on this lawsuit to make sure you’re kept aware of what’s going on.
