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Live Nation boss hits back at anti-competition claims, says company’s consent decree is misunderstood

By | Published on Thursday 19 September 2019

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Live Nation boss Michael Rapino has spoken about the allegations that his company has breached the terms of the agreement it reached with the US Department Of Justice ten years ago when it merged with Ticketmaster. Needless to say, he reconfirmed his company’s official line that no breaches have occurred, adding that much of the commentary around those allegations simply misunderstands said DoJ agreement.

That agreement, which takes the form of one of those consent decrees, sought to stop Live Nation/Ticketmaster from leveraging its concert promotions division to secure competitive advantage for its ticketing business, or vice versa.

Although the agreement is nearly a decade old – and is due to expire next July – it’s been back in the spotlight over the last year. Partly because of a big New York Times article about allegations of anti-competitive behaviour that have been made against the live giant. And partly because of debates in Washington over the US ticketing market.

In that latter domain, one member of Congress, Bill Pascrell, is having another go at introducing new federal laws to regulate both primary and secondary ticketing sales. Meanwhile, Congress members Richard Blumenthal and Amy Klobuchar recently called on the DoJ to review the effectiveness of the Live Nation consent decree, and consider whether or not it should be renewed next year.

Earlier this week, the Live Nation consent decree came up yet again. This time during a Congressional ‘oversight hearing’, when the aforementioned Blumenthal asked Makan Delrahim, who is Assistant Attorney General for the DoJ’s Anti-Trust Division, about the Live Nation agreement.

Delrahim confirmed that his department had been “examining allegations of violations” of the consent decree, but added that legal action was unlikely. That, the Assistant AG said, was partly because the current accepted standard for proving any violation of an agreement of this kind set the bar very high.

Following that Congressional discussion, Live Nation again said in a statement that it had always complied with the consent decree, adding that: “We do not force anyone into ticketing agreements by leveraging content, and we do not retaliate against venues that choose other ticketing providers”.

The topic resurfaced at a Goldman Sachs organised conference in New York yesterday where Michael Rapino was speaking. Variety documented the Live Nation chief’s response to a question about competition in the US ticketing marketplace in quite some detail.

Insisting that there were various misconceptions about the nature of the consent decree, Rapino said: “I negotiated it and it’s very simple: It says we can’t threaten venues. We can’t say to a Ticketmaster venue that says they want to use a different ticketing platform, ‘If you do that, we won’t put shows in your building'”.

But, he went on, “it also says [that] we can do what’s right for our business, so we have to put the show where we make the most economics, and maybe that venue [that wants to use a different ticketing platform] won’t be the best economic place anymore because we don’t hold the revenue”.

That latter point is key, in that the consent decree does provide a certain degree of flexibility for Live Nation, which arguably makes the core “you can’t bully venues” element harder to enforce. Because if any one venue claims that Live Nation’s touring division punished it over its ticketing choices, the live firm could counter that its decisions to use another venue were economic not political.

Rapino went on: “We’re eight-plus years into the decree, and with 30,000 shows a year and 30,000 employees, you can imagine all the emails flying around. Every now and then one of our competitors runs to the DoJ and says ‘We lost the Kansas City venue, [because Ticketmaster] threatened [sanctions]!'”

“We [then] get an inquiry from the DoJ [to the effect of] ‘Hey, can we get some emails from over the years’. They’ve done it and [they’ve] never found anything wrong. We’re very compliant, we understand it clearly – trust me, after eight years and all those emails, if you weren’t compliant, with your competitors playing that game, you’d have been exposed as being in violation long ago”.

The Live Nation boss added that when people talk about his company being “investigated” by the DoJ, they often mean that the government department has simply requested information, which is a routine part of managing the consent decree.

Talk of a DoJ investigation would be a much bigger deal, he mused, if there was no existing agreement. “If you’re not under a decree”, he said, “[then] it’s bigger news if the DOJ woke up one day and said, ‘We’re gonna look at this guy'”.

Concluding, Rapino insisted that the US ticketing market is sufficiently competitive. Name-checking AEG’s ticketing business AXS, the various operations of eBay’s StubHub and relative newcomer Vivid, he said: “It’s not like venues don’t have options. If you’re a venue you can pick any ticket platform you want, and we have to provide a better product and win that business fair and square”.

You can read Variety’s full write-up of Rapino’s comments here.