Live Nation, Ticketmaster Sued By Department of Justice

America’s Department of Justice is collecting lawsuits like infinity stones. This latest one is against the ticket seller, Live Nation.

I’m Kalilah Reynolds, founder and CEO of Money Media, money news made simple.

So back in 2010, Ticketmaster merged with Live Nation to form Live Nation Entertainment, which is now the world’s largest ticket seller across music, sports and theatre. 

Live Nation was all about putting on events, and Ticketmaster sold tickets to these events. So when the companies joined forces, it made sense and seemed like a smart move to establish dominance in the market.

And LNE has indeed dominated the entertainment scene since then. 

But now the DOJ is suing for anti-competitive practices and monopolistic behaviour. 

And if you’re wondering, didn’t we just talk about another DOJ anti-competitive lawsuit? We did. Apparently, this lawsuit is part of a broader push by the Biden administration to crack down on antitrust violations. 

They’ve been targeting big players like Apple, Google, Amazon and now, Live Nation. 

LNE is behind music festivals like Lollapalooza.  They also organise concert tours for superstars like Beyoncé, Taylor Swift and the Rolling Stones. Not to mention comedy shows with stars like Kevin Hart and Dave Chappelle.

The company has made acquisitions in North America, Japan, Germany, Brazil and the Philippines. 

According to the DOJ, LNE controls over 260 concert venues in North America.  They distributed more than 620 million tickets through its systems in 2023.

But Live Nation came under scrutiny in 2022 when their website crashed during a Taylor Swift presale event.

That scrutiny led the justice department to suspect that LNE is using long-term contracts to stifle competition and block venues from working with multiple ticket sellers.

They also allege Live Nation Entertainment uses threats of financial repercussions against firms that dare to challenge them.

So some pretty serious allegations.

The justice department’s main goal is to split Ticketmaster and Live Nation back up. But of course, LNE won’t take this lying down. 

They’re standing their ground, arguing that they don’t set ticket prices. Ticket prices are set by artists who in turn determine ticket sales methods. So they aren’t to be blamed.

In response to the lawsuit,  LNE released a statement on their website pointing out that their service charges were actually lower than competitors like SeatGeek.

They also mentioned that they only received a small portion of the digital distribution take rates, while other companies pocket significantly more. 

According to them, the DOJ has filed a case that will mislead the public into thinking that ticket prices will be lower if something is done about Live Nation and Ticketmaster.  

They’re essentially saying even if the government is successful in splitting the company up, the DOJ still cannot guarantee a drop in ticket prices. 

Regardless, this legal tango will definitely affect top shareholders of Live Nation Entertainment like Saudi Arabia’s Public Investment Fund, Liberty Media Corporation, and The Vanguard Group.

The outcome of this lawsuit could reshape the dynamics of live entertainment. 

If LNE wins the lawsuit, it could maintain its dominance, which may boost market confidence and stock prices. 

If the government wins, it could result in regulatory changes, financial penalties, negative market impact, and potential benefits for consumers and artists. 

Live Nation Entertainment trades on the New York Stock Exchange.  As I record this on May 29, its stock is trading at US$94.22.  That’s down almost 8% in the past five days.

And that’s the bottom line.