In its lawsuit against Live Nation Entertainment, the concert giant that owns Ticketmaster, the Justice Department accused it of being an illegal monopolist, relying on a series of internal communications that offered a rare behind-the-scenes look at the industry.
The Justice Department argued in a sweeping complaint filed Thursday that the 2010 merger of Live Nation and Ticketmaster harmed competition, stifled innovation and resulted in higher ticket prices and fees for consumers. It called for the company to be broken up.
In response, Live Nation, which is also the world’s largest concert promoter, said it was not a monopolist and denied that it had the unilateral power to raise prices. Contrary to the government’s argument about its great power, Live Nation says it now has more competition than ever and that the Justice Department’s lawsuit “does not result in a reduction in ticket prices or service fees.”
In crafting its allegations, the government relied on revealing emails it said were written by Live Nation CEO Michael Rapino and other high-ranking figures in the concert world.
Here are some of those accusations.
A potential rival’s Kanye West concert
A 2021 episode brings to the fore the Justice Department’s allegations that Live Nation went to extreme lengths to protect its competitive advantage.
At the end of the year, the government said Live Nation threatened “commercial retaliation” against private equity firm Silver Lake, which had invested in TEG, an Australian ticketing and advertising company involved in a highly anticipated Kanye West and Drake benefit show at the LA Coliseum. Silver Lake had also invested in Oak View Group, an event management company with close ties to Live Nation.
According to the government, Rapino complained to an Oak View Group executive that he viewed TEG as a competitor, and Oak View Group told the investor that Live Nation was “not satisfied.” Rapino then told Silver Lake he was “all in” with Oak View Group “where the big game is in venues – why insult me with this investment in ticketing/promotions etc?”
TEG had struck a deal to sell some tickets through StubHub. According to the complaint, Live Nation attempted to “frustrate” TEG by blocking those tickets, and as a result “hundreds of StubHub customers were denied entry to the event.”
Live Nation then threatened to “withdraw support from Oak View Group,” and Irving Azoff, the influential artist manager and co-founder of Oak View Group, refused to allow TEG to promote shows with any of the artists he managed. Azoff told Rapino that he would demand that Silver Lake sell TEG, and Rapino replied, “I love you.” According to the complaint, Silver Lake tried to sell TEG – and offered it to Live Nation.
In a detailed response to the Justice Department’s lawsuit, Dan Wall, executive vice president of corporate and regulatory affairs at Live Nation, said the claim that Live Nation threatened Silver Lake “reveals not only a disregard for the facts but also deep hypocrisy.” .
Wall said Rapino’s complaint is “basically the same” as a concern from both the Justice Department and the Federal Trade Commission because “private equity firms make multiple investments in the same industry due to competitive interconnections.”
In a separate statement about the concert at the LA Coliseum, Live Nation said: “The only thing we did was thwart TEG’s efforts to release tickets directly to the secondary market, thereby violating our exclusive rights to primary tickets.” Silver Lake did not respond to a request for comment.
A competitor became a “hammer”
According to the government, Live Nation initially viewed Oak View Group as one of its “biggest competitor threats.” But soon, the companies “joined together,” the government said, “to avoid competing with each other and to develop a mutually beneficial business plan to solidify Live Nation’s dominance.”
The government says Oak View Group acted as an “agent” for Live Nation, even describing itself as a “pimp” and “hammer” for the larger company, sometimes making threats on Live Nation’s behalf to venues that were considering Ticketmaster to give up for another ticket provider.
The government’s complaint allegedly cites emails from 2016 in which Rapino complains to Oak View Group executives about their intention to promote shows featuring an artist with whom Live Nation works. Oak View Group is backing down and the company’s CEO – who is not named in the complaint but is Timothy Leiweke – says: “Our people have moved on a bit.” Everyone knows we don’t do any advertising and only tour with Live Nation make.”
Wall, Live Nation’s chief executive, responded by saying that Oak View Group “was never a concert promoter, nor did it aspire to be one,” and that it was simply trying to fill the occasional dark night at one of its venues. “To portray this as an agreement not to participate in concert promotion is a travesty,” Wall wrote. A representative for Oak View Group declined to comment.
A ticket competitor at Barclays Center
In early 2023, The New York Times broke the news that the Barclays Center, the arena in Brooklyn, was abandoning SeatGeek, the young and aggressive ticketing company with which it had just signed a seven-year contract, and signing a new contract with Ticketmaster.
The abrupt change caused a stir in the industry and led to questions about whether Live Nation had denied the venue access to Live Nation’s biggest tours in retaliation for Ticketmaster’s move to SeatGeek. Live Nation denied this at the time and a review of concert dates by The Times found inconclusive results. While the number of Live Nation-sponsored shows at Barclays had declined since the SeatGeek takeover, the number of independent promoters had also declined.
In the Justice Department’s case, Barclays’ name is missing from the lawsuit, but Wall confirmed this in a conference call with investors late Thursday. The government quotes an email allegedly sent from “a senior Live Nation executive” to the venue’s general manager, who had heard the venue was switching to SeatGeek: “Absolutely,” the E says email, “we should think about a closer relationship with LN.” “not just who writes a bigger sponsorship check,” adding a “wink wink” emoji.
According to the government, Live Nation “made good on their threats and moved concerts to other venues.”
In response, Live Nation said, “We categorically deny that concerts were rerouted to retaliate against their decision to go to SeatGeek.”
Purchase of competing companies
The government argues that Live Nation acquired a number of companies to eliminate competitors in both concert promotion and ticket sales.
As examples, the government cites United Concerts in Utah, which used a regional ticketing company called SmithsTix. According to the government, these communications were internal to Live Nation. The company sought a stronger ticket sales presence in Utah, but decided against acquiring SmithsTix because it “would require going to the Department of Justice.” Instead, Live Nation purchased United Concerts in 2017 and switched its venues to Ticketmaster; SmithsTix ultimately went bankrupt, it was said.
Another is AC Entertainment in Tennessee, which played a role in the Bonnaroo festival there. Live Nation acquired a majority stake in the company in 2016. A Live Nation executive viewed the economics of the deal as “not particularly exciting” but called it “a defensive move” against AEG, according to the complaint. In 2018, Live Nation purchased Frank Productions, a Wisconsin promoter that used ticket providers other than Ticketmaster; Live Nation acquired the company and “converted the venues to exclusive Ticketmaster contracts.”
In response, Wall said the deal for AC Entertainment was made with a promoter who was in his 60s and wanted to retire. “Live Nation didn’t have an office in Knoxville, so it did the deal for $15 million,” Wall wrote. “Seriously? The DOJ is questioning this?”
Source link
2024-05-24 22:02:43
www.nytimes.com
