The Justice Department announced a civil antitrust suit Thursday against Live Nation and subsidiary Ticketmaster. The filing alleges the company illegally monopolized the live entertainment industry.

The action was filed in the U.S. District Court for the Southern District of New York. A coalition of 30 state and district attorneys general signed on to the complaint, including New Jersey Attorney General Matthew Platkin.

It alleges multiple violations of the federal Sherman Act as well as the New Jersey Antitrust Act.

Live Nation describes itself as the “largest live entertainment company in the world.” It owns or controls more than 265 concert venues in North America. The business generates over $22 billion globally in annual revenue from its three verticals: concerts, ticketing, and sponsorship and advertising.

Here in the Garden State, Live Nation manages the venue and/or ticketing services at MetLife Stadium, Prudential Center, PNC Bank Arts Center and Freedom Mortgage Pavilion.

“The lawsuit outlines how Live Nation’s $22 billion business has built an ecosystem in which Live Nation can not only extract revenues at every stage as an intermediary, but on many occasions, can also double-dip across multiple business lines – for example, as both a ticketer and a promoter,” the New Jersey Attorney General Office said in a press release. “These practices create a feedback loop that inflates its fees and revenue, all at the expense of fans. As a result, the connection between artists and fans is strained and artists are no longer free to decide where and when to perform – all to raise Live Nation’s bottom line.”

Key allegations in the suit include that Live Nation:

• Maintained its competitive monopoly in ticketing markets by locking up venues through restrictive long-term, exclusive agreements
• Made threats facilities would lose access to Live Nation-controlled tours and artists if they signed with a rival ticketer
• Leverages its extensive network of amphitheaters to force artists to select it as a promoter instead of its rivals, maintaining its promotions monopoly
• Has harmed fans through its conduct of higher fees, lack of transparency, fewer consumer choices and stifling innovation.

The complaint calls for the court to:

• Prohibit Live Nation from engaging in its anticompetitive practices
• Order Live Nation to divest Ticketmaster
• Seek equitable monetary relief to remedy Live Nation’s unlawful conduct

Time to break up

Attorney General Merrick Garland announced the lawsuit at a Thursday news conference.

“We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” said Garland. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”

“For decades, New Jersey has long enjoyed a vibrant music scene – from jazz in Newark to rock on the Jersey Shore – and both fans and artists have been hurt by the complicated business web Live Nation has built since it purchased Ticketmaster in 2010,” said Platkin. “It shouldn’t cost thousands of dollars to take your family to see live music, to introduce your children to your favorite artists. Today, New Jersey is proud to stand with a large group of states on behalf of consumers everywhere who are tired of fee schemes that lead to exorbitant pricing and rob them of these experiences.”

In a post on its website by Dan Wall, executive vice president, Corporate and Regulatory Affairs, Live Nation vehemently pushed back against the lawsuit.

The company stresses:

• The lawsuit will not reduce ticket prices or service fees
• There is more competition than ever in the live events market. It says that’s why Ticketmaster’s market share has declined since 2010
• Net profits show Live Nation and Ticketmaster do not wield monopoly power
• This lawsuit distracts from real solutions that would decrease prices and protect fans – like letting artists cap resale prices

“The Department of Justice and a group of state attorneys general have now filed the much-anticipated antitrust suit against Live Nation and Ticketmaster,” Wall wrote. “This follows intense political pressure on DOJ to file a lawsuit, and a long-term lobbying campaign from rivals and ticket brokers seeking government protection for themselves. The complaint – and even more so the press conference announcing it – attempt to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry. It blames concert promoters and ticketing companies – neither of which control ticket prices – for high ticket prices.”

“The world is a better place because of that merger, not a worse one.”

Live Nation says that ignores everything that is actually responsible for higher ticket prices, such as increasing production costs, artist popularity, and 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost.

“Critically, Live Nation can offer and has offered fans, artists, venues and the rest of the performance ecosystem better prices and better services than they would receive if these complementary businesses were separated,” Wall continued. “Ticketmaster, in particular, is a far better, more artist- and fan-focused business under Live Nation’s ownership than it ever was as a standalone company. But that’s not how this DOJ sees it. They are reflexively antagonistic to vertical integration. The Obama administration saw it differently. It allowed Live Nation and Ticketmaster to merge.”

Live Nation closed its statement emphasizing that the merger has been positive for the concert promotion ecosystem.

“The world is a better place because of that merger, not a worse one,” said Wall.

Live Nation was set to hold a regulatory update later Thursday.

Please stay with NJBIZ for more on this developing story.

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