In a significant development, Live Nation Entertainment, the parent company of Ticketmaster, has been sued by the Department of Justice, backed by 29 states and the District of Columbia.
The lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses Live Nation of monopolizing the live events industry.
The legal action comes nearly two years after a surge in demand for Taylor Swift concert tickets caused chaos on Ticketmaster's platform, leading to widespread frustration among her fans. The incident highlighted the company's dominance in the ticketing industry and sparked calls for regulatory intervention.
The federal government's complaint, spanning over 120 pages, paints a picture of Live Nation's pervasive influence in the live entertainment sector. "Live Nation has its tentacles in virtually every aspect of the live entertainment industry," the complaint reads.
The lawsuit seeks the divestiture of Ticketmaster, at the very least, as reported by The New York Times. "It is time for fans and artists to stop paying the price for Live Nations monopoly," said Attorney General Merrick Garland. "It is time to break up Live Nation-Ticketmaster. The American people are ready for it.
The complaint also delves into the intricate web of fees that consumers pay, often to entities owned by Live Nation. It alleges that a significant portion of the venue's share in the ticket fee is passed onto promoters like Live Nation, incentivizing them to direct content to their venues. This, in turn, drives up the overall number and size of fees paid by fans.
Rolling Stone, in its coverage of the lawsuit, highlighted a "ticketing" fee that allegedly allows Ticketmaster to profit more when venues increase their fees to offset Live Nation's concert promotion charges. The government's complaint labels this practice a "double dip," forcing venues to raise fan-paid fees to counterbalance Live Nation's promotion charges.
Live Nation, which generates $22 billion in annual revenue through its control of over 265 concert venues in North America, has been criticized for its fees, dubbed the "Ticketmaster Tax." The lawsuit argues that these fees inflate ticket prices, negatively impacting fans, artists, small promoters, and venue operators.
For instance, fees for a 2022 Red Hot Chili Peppers concert in Charlotte, North Carolina, added 36 percent to the $81.50 ticket price.
"Since Ticketmasters Taylor Swift ticketing debacle in 2022, my AG colleagues and I have relentlessly sought justice for Americans wanting to attend concerts without having their pocketbooks pillaged by Live Nations monopoly," said Tennessee Attorney General Jonathan Skrmetti, according to USA Today.
The lawsuit has drawn support from both sides of the political aisle, reflecting the bipartisan disdain for Live Nation expressed at a congressional hearing in January 2023. Republican Sen. John Kennedy of Louisiana criticized the company's handling of the Taylor Swift ticket sales, calling it a "debacle."
Meanwhile, Democratic Sen. Amy Klobuchar of Minnesota described Live Nation's dominance as the "definition of monopoly." She argued that the company's power was so immense that it didn't need to exert pressure or make threats, as people simply fell in line.
The lawsuit also underscores Ticketmaster's influence in the resale market, with Republican Sen. Josh Hawley of Missouri accusing the company of forcing everyone in the resale market to join its ecosystem.
In a rare show of unity, Democratic Sen. Richard Blumenthal of Connecticut congratulated Live Nation executive Joe Berchtold for bringing together Republicans and Democrats in a unified cause.
The lawsuit against Live Nation marks a significant step in the fight against monopolistic practices in the live entertainment industry. It remains to be seen how this legal battle will unfold and what implications it will have for the future of the sector.
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