The events behemoth Live Nation Entertainment is about to rack up some fees of its own — legal fees, that is.
On Thursday, the Department of Justice announced it was suing Live Nation Entertainment on antitrust grounds. The suit arrives after long-standing allegations of monopolistic practices and multiple federal investigations. The DOJ’s action was largely expected following a report of the impending suit by the Wall Street Journal on April 15.
Live Nation Entertainment encompasses international event promotion and management, as well as ticket sales through its better-known division, Ticketmaster.
The antitrust suit, which was joined by 30 states, was filed in federal court in the Southern District of New York. During a press conference following the announcement, Attorney General Merrick Garland detailed some of the DOJ’s allegations against Live Nation Entertainment including:
- Locking out competition through long-term and exclusive contracts with major venues encompassing more than 70% of event ticket sales.
- Imposing a “seemingly endless” bevy of fees, such as ticketing fees, service fees, convenience fees, platinum fees, handling fees and more.
- Pressuring artists into using its services to promote events at venues it has long-term contracts with.
- Working “strategically and illegally to eliminate the threat of potential rivals” in the event ticketing industry, in some cases even when the deal didn’t financially make sense for Live Nation’s business.
“Some monopolies are just so entrenched and some problems so difficult to address that they require decisive and effective solutions,” said Assistant Attorney General Jonathan Kanter at the press conference. “We request a remedy that has been used in antitrust law going back over 100 years, which is structural relief.”
Prior to the lawsuit, in Live Nation Entertainment’s first quarterly earnings call of the year on May 3, President and CFO Joe Berchtold said, “Based on the issues we know about, we don’t believe a breakup of Live Nation and Ticketmaster would be a legally permissible remedy.”
The investigation started with Taylor Swift’s Eras Tour
The Justice Department’s suit is the result of an investigation launched in November 2022 following an incident in which Ticketmaster mishandled sales of tickets for Taylor Swift’s Eras Tour. A multitiered presale event for the tour prematurely oversold tickets, which meant hopeful fans couldn’t purchase them in the public sale. Then resellers who did manage to get presale tickets posted those for sale at exorbitant prices.
In the aftermath, fans of the pop star, also known as Swifties, filed a class-action lawsuit accusing the company of fraud, misrepresentation and anti-competitive practices.
The incident also prompted Congress to begin investigating the event ticketing company. In February 2023, legislators recommended that the DOJ’s Antitrust Division probe Live Nation Entertainment, as well.
Then in November 2023, the Senate Permanent Subcommittee on Investigations (PSI) issued a subpoena for documentation that it said Live Nation had yet to produce during the subcommittee’s investigation. The subcommittee also wrote a letter to the Justice Department that said the Eras Tour problems “suggest that the Department’s past enforcement efforts have failed to protect competition.” It went on to say that if Live Nation had indeed abused its power in the event ticketing market, then it may be prudent for the DOJ to break up Live Nation and Ticketmaster.
Live Nation Entertainment controls most of the event ticketing market
In 2010, the Justice Department approved the merger of the event promoter Live Nation and ticketing company Ticketmaster to become Live Nation Entertainment. At the time that the companies consolidated, each was already the dominant player in the events industry: Ticketmaster for ticketing and Live Nation for owning, operating and promoting venues.
Peter Cohan, a professor of practice in the management division at Babson College in Wellesley, Massachusetts, says the merger has been costly for consumers. Face-value tickets have increased sharply, but increasingly pricey fees have been tacked on, as well. They’re commonly called junk fees, and the Biden administration has made a mission of targeting them in the events ticketing space, as well as travel and credit cards.
In a 2009 analysis that Cohan wrote prior to the Live Nation merger entitled “Chokehold on Live Entertainment,” he looked at fees. Cohan says, “I came across a typical kind of concert ticket — Denver, Colorado, a Green Day concert in 2009 — where the fee was 45% of the face value of the ticket. And now fees are as high as 70% or 75%.”
In more than a decade since its merger, Live Nation Entertainment has only strengthened its hold on the market. During last year’s congressional investigation, the PSI submitted a letter to the Justice Department citing statistics that demonstrate Live Nation’s reach: 60% of the event ticketing market is controlled by the company. That includes 80 of the top 100 largest arenas in the U.S.
Live Nation Entertainment’s ownership of and deals with venues make it difficult for artists to use any other ticketing platform for its tours, says Cohan. “If an artist wants to use a different ticketing provider, then Live Nation will basically threaten to say, ‘Well, you can’t use this venue,’” he says.
This hasn’t gone unnoticed by the Justice Department: In 2019, the DOJ determined that Live Nation had violated the consent decree it agreed upon during the merger. The consent decree specified that Live Nation Entertainment cannot retaliate against concert venues for using other ticketing services. According to a Dec. 19, 2019, press release, the DOJ found “Live Nation repeatedly and over the course of several years” violated this agreement.
The consent decree between the companies was supposed to expire after 2019, but the DOJ extended the terms of the merger deal to 2025. In the extension, the Justice Department clarified that Live Nation Entertainment must not pressure venues to use Ticketmaster under the threat of forfeiting Live Nation shows.
Live Nation Entertainment says it’s not to blame for high prices
In response to scrutiny over high ticket prices, Live Nation Entertainment sought to explain more fully the rationale behind the costs. Dan Wall, Live Nation Entertainment’s executive vice president of corporate and regulatory affairs, wrote in a March 4, 2024, open letter entitled “The Truth About Ticket Prices” that high prices “have very little to do with Live Nation or Ticketmaster.” Instead, steep demand for high-profile concerts, like the Eras Tour, naturally leads to more expensive tickets. He went on to add that artists’ increasing dependence on touring income — mainly due to the prevalence of music streaming, which doesn’t pay out for most artists — is also a contributing factor.
Still, Wall wrote that artists tend to underprice tickets “mostly out of regard for their fans,” but the resale market shows artists what their tickets could cost, which, in turn, leads artists to charge more because “when they don’t charge those prices scalpers will find ways to acquire tickets and resell them at full market value.”
He wrote, “The common thread to all these factors is that they have nothing to do with who the promoter is or who sells tickets to the show.” It is the performer’s business team that works with promoters to come up with a strategy that provides revenue while “doing right by their fans.”
Cohan says the secondary market has further exacerbated already high prices for tickets — by several thousand percent markups. “If you go to buy a ticket and Ticketmaster says you can’t get it, that’s because 90% of tickets are reserved for secondary market players who immediately bid up the price,” says Cohan. “Then you have to buy it on the secondary market and pay much more for it.”
On the secondary market, Cohan says, Ticketmaster then collects more fees on transactions. However, Ticketmaster has, in the past, publicly denied that it enables a mass-scalping system.
Live Nation reported a record $22.7 billion in revenue in 2023.
This isn’t the DOJ’s first rodeo with Ticketmaster
Anticompetitive accusations have been thrown at Ticketmaster for decades. In the early 1990s, the grunge band Pearl Jam feuded with Ticketmaster over its service charges. A June 30, 1994, article in the Los Angeles Times said the band accused Ticketmaster of refusing to sell tickets to the band’s tour at the price point they wanted to ask of fans: $18 or less, with under $2 in service fees (at the time, Ticketmaster charged $4 to $8 per ticket in service fees). Later, Pearl Jam tried to work outside the Ticketmaster system on its own low-priced tour, but the company allegedly influenced promoters and venues to boycott the tour altogether.
The clashes between Ticketmaster and Pearl Jam prompted a situation similar to the current inquiry following the Eras Tour mess: The Department of Justice launched an investigation into anti-competitive practices while Congress called for hearings. Ultimately, Ticketmaster won out.
What’s next
Cohan is skeptical that a breakup of the merger will happen. He speculates that it’s more likely that Live Nation will stall litigation for as long as possible and likely conduct changes to remediate some of the complaints rather than wade through an entire breakup of the companies.
But if the DOJ does break up the merger, Cohan says, it’s possible prices might improve somewhat since there would be less of a financial incentive for Live Nation to only use Ticketmaster. But he asserts that unwinding the merger is unlikely to make much of an impact.
“The situation was pretty bad before they were merged and probably would be pretty bad afterwards unless there was a fundamental change to the way tickets are sold,” says Cohan, who suggests direct artist-to-consumer sales would likely be the next best option. He reasons that artists need a way to sell tickets, but with existing e-commerce technology, big ticketing systems aren’t really necessary.
“I’m sure many artists — even the smaller ones — could probably pull their money together and build a system that they could sell tickets on directly to consumers without having all these intermediaries taking a piece out of it where they’re not really adding any value,” he says. “It would probably still be expensive to go to a concert, but with the non value-added cost taken out, it would be lower.”