Following the US government’s explosive lawsuit against Live Nation last week, a class action has been filed with the New York courts potentially on behalf of millions of American ticket buyers. Like the government’s litigation, the class action lawsuit accuses Live Nation and its Ticketmaster subsidiary of anticompetitive conduct. Although the impact of Live Nation’s dominance on the ticket resale sector seems to be of particular concern.
“Over the past three decades”, the new lawsuit states, “Live Nation and Ticketmaster collectively built empires in several key markets within the live concert and event economy”. The merger of the companies, in 2010, then created “a vertically integrated monopoly and juggernaut trust”.
As with the government’s legal action, the class action sets out Live Nation’s dominant position in tour promotion, venue management, and both primary and secondary ticketing across the American market.
The allegation is that it exploits its dominance in the various different strands of live music to force venues into exclusivity deals, and to prevent rival ticketing companies and ticket brokers from selling tickets to many major shows, even when Live Nation itself isn’t the promoter. And where Live Nation is the promoter and the primary ticket seller, it also seeks to restrict the flow of tickets to rival resale platforms.
“To access the majority of significant concert and event tours in the United States, a consumer must interact, directly or indirectly, with Live Nation”, claims the lawsuit. That, it alleges, allows Live Nation and Ticketmaster to set uncompetitive ticket prices and charge excessive ticketing fees, on both primary ticket sales and tickets resold by touts (or ‘scalpers’ or ‘brokers’ if you prefer) on its secondary ticketing platforms.
Although the new lawsuit goes to great lengths to explain how the live music business works, the different business partners involved, and Live Nation’s role at multiple links in the supply chain, Live Nation will almost certainly insist that the legal filing misrepresents - or at least misunderstands - industry practices and market pressures.
Just two days before the US government filed its antitrust lawsuit on Thursday, Live Nation CFO Joe Berchtold discussed his company’s venue exclusivity deals at a conference organised by JP Morgan. He insisted that exclusivity was not a condition of working with Live Nation or Ticketmaster, but something the company’s venue partners usually wanted.
“I’ve got no issues with any venue that says they want to be non-exclusive and want a financial arrangement that reflects that and want an operational arrangement that reflects that”, he told the conference. “All of that is fine, as far as we’re concerned. We just find that that’s not generally what the venues are asking for”.
Meanwhile, as the US government's Department Of Justice worked on the investigation that led to last week’s lawsuit, Live Nation started pushing out blog posts arguing that high ticket prices for the most in-demand shows are down to market demand, surging production costs and artists relying heavily on touring income. And Ticketmaster's fees, it also claimed, are very competitive and - on its primary platform at least - not even set by Ticketmaster.
That the consumer class action lawsuit is focusing on ticket resale is interesting. Plenty of people working across the live sector have expressed concerns about the market dominance of Live Nation and Ticketmaster. Among the critics are artists, managers and promoters, but also ticket touts and the resale platforms they use. And groups representing artists, managers and promoters are also often critical of the touts and resale platforms.
Unlike in the UK, Ticketmaster is still directly involved in ticket resale in the US. However, Live Nation has nevertheless introduced or proposed some measures to restrict resale in the American market. Measures which have often been welcomed by those artists, managers and promoters who are critical of the touts. Although the outcome is often the strengthening of Ticketmaster’s own resale platforms or things like dynamic pricing on its primary platform. Which means it can be hard for artists, managers and promoters to know who to root for.
Live Nation has certainly used ticket resale as a distraction tactic when lawmakers in Washington have been investigating the ticketing sector. It tells lawmakers that they should focus their efforts on regulating touts and resale platforms, rather than other aspects of Live Nation’s business. Meanwhile, when the US government filed its lawsuit last week, Live Nation blamed the regulatory intervention on “a long-term lobbying campaign from rivals and ticket brokers seeking government protection for themselves”.
Nevertheless, assuming these cases are not settled and therefore get to court, they should shine at least some light on how the live industry works and where Live Nation’s market power is problematic.
The DoJ lawsuit ultimately calls for Live Nation and Ticketmaster to be split up. The class action, meanwhile, demands “statutory, actual, compensatory, consequential, treble, punitive and nominal damages” for the potentially millions of ticket-buyers who could end up being members of the class.