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Live Nation’s share price tumbles amid reports of competition regulator lawsuit in the US

By | Published on Monday 16 December 2019

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Live Nation’s share price took a tumble on Friday following a report in the Wall Street Journal that the US Department Of Justice is preparing legal action against the live music giant in relation to allegations of anti-competitive behaviour.

Those allegations mainly relate to the so called consent decree that Live Nation agreed with the DoJ when it bought Ticketmaster back in 2010. That consent decree sought to stop Live Nation/Ticketmaster from leveraging its concert promotions business to secure competitive advantage for its ticketing business, or vice versa.

Live Nation has been accused, mainly by its rivals, of breaking the terms of that consent decree at various points. It all became a much bigger talking point last year after the New York Times published an article summarising all the criticism. And it’s come up again more recently during conversations about the wider ticketing business among political types in Washington.

The live music firm has always denied any wrong-doing. Back in September its boss, Michael Rapino, spoke about all the criticism during a Goldman Sachs organised conference. He insisted that his company’s critics misunderstand the DoJ agreement.

“I negotiated it and it’s very simple”, he said. “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'”.

However, 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”.

Nevertheless, the criticism continues. And sources have told the WSJ that certain DoJ officials now also believe that the consent decree may have been breached. Hence the talk of legal action.

That consent decree is actually due to expire next year. So one of the things that the DoJ will reportedly ask a judge for is an extension. Whether any other sanctions will be sought remains unclear.

According to Billboard, this is all complicated further by yet another planned Live Nation acquisition, this time of a rival ticketing company called, well, Rival. The LA-based primary ticketing and technology company was launched last year by former Ticketmaster CEO Nathan Hubbard and is seemingly in talks to sell itself to its founder’s former employer.

Billboard’s sources say that the DoJ is also investigating that deal, partly because of a complaint by SeatGeek, which is also reportedly interested in bidding for Rival.

So, that’s all rather complicated isn’t it? Neither the DoJ nor Live Nation have formally commented on the former’s planned legal action.

Meanwhile some US lawyers are already fishing around for a possible investor lawsuit following Friday’s share price tumble, based on the allegation Live Nation issued “materially misleading business information” regarding the allegations of anticompetitive conduct.

So fun times all round.