A New Orleans-based law firm has announced that it has “commenced an investigation” into concert and ticketing giant Live Nation. This has been prompted by ongoing litigation pursued by Live Nation investors whose grievances relate to the allegations of anticompetitive conduct that have been made against the live entertainment business.
Charles C Foti Jr - a partner at law firm of Kahn Swick & Foti and former Attorney General of Louisiana - is leading the investigation which, a statement says, "is focusing on whether Live Nation's officers and/or directors breached their fiduciary duties to its shareholders or otherwise violated state or federal laws".
The statement cites a lawsuit that was filed in August 2023, led by Live Nation investor Brian Donley. That lawsuit claimed that - by not addressing allegations of anticompetitive conduct in its disclosures to investors - Live Nation’s “positive statements about the company’s business, operations and prospects were materially misleading and/or lacked a reasonable basis”.
“Defendants failed to disclose to investors that Live Nation engaged in anticompetitive conduct, including charging high fees and extended contracts with talent, and retaliated against venues”, the lawsuit claimed. That alleged conduct, it added, meant Live Nation was “reasonably likely to incur regulatory scrutiny and face fines, penalties, and reputational harm", something which, it added, investors should have been made aware of.
Live Nation sought to have Donley's case dismissed on the basis that his lawsuit did not "plead facts” which indicated it had “omitted material information” it was required to disclose or had made statements that were false. But last month a judge rejected Live Nation's motion for dismissal.
In reaching that decision, the judge honed in on a specific allegation in the original lawsuit, that Live Nation issued a misleading statement about the growth of ticketing revenues in 2022. The company attributed that growth to the "quality of the Ticketmaster platform and its continued popularity with clients", but did not mention the importance of Ticketmaster's dominance in the US market, in part aided by long-term exclusivity contracts with venues.
By not providing the information regarding Ticketmaster’s “control in the market”, it was argued, Live Nation presented what a “reasonable investor” might consider “a state of affairs that differs in a material way from the one that actually exists”. Based on that, the judge concluded that the “plaintiffs have sufficiently alleged ... a material misrepresentation".
That doesn’t necessarily mean Donley’s case will succeed, but it will proceed.
With the market dominance of Live Nation still very much in the spotlight in the US, Kahn Swick & Foti clearly sees the opportunity for further work in this domain, hence instigating its own investigation into the live company's conduct.
Indeed, the law firm is calling for any "long-term" Live Nation shareholders to get in touch to discuss their "legal rights" in relation to the allegations of misrepresentation.
