A former employee has made a number of serious allegations of misconduct against Live Nation, all neatly set out in a brand new lawsuit filed just one week after a jury ruled that the live music company operates as an unlawful monopoly. Which means these allegations have arrived just as Live Nation’s conduct is in the fall glare of regulators, politicians, the music industry and music fans.
Among other things, ex-EVP Nicholas Rumanes claims he discovered a “company-wide pattern of financial misrepresentation and misleading disclosures”. He says the live music company breached the terms of the 2010 consent decree it agreed with the US Department Of Justice. And ‘junk fees’ added to tickets were listed as ‘venue charges’ when they were in fact a revenue stream for Live Nation.
And when Rumanes raised concerns about all this misconduct with his boss, Global President Of Venues Jordan Zachary, he claims he was subjected to “a toxic and retaliatory work environment for months”, and then - in May last year - had his contract terminated “abruptly, illegally and without warning”.
Unsurprisingly, Live Nation says that Rumanes' claims are “false and without merit”, while also insisting that the former employee “did not raise these allegations during his employment”.
He was let go from his EVP role “after failing to meet expectations”, a spokesperson claims. And when Rumanes started making all his allegations against Live Nation after losing his job, “an independent investigation found no evidence to support them”.
By his own admission, LA-based Rumanes was not happy working at Live Nation almost from the start. He says the job he was offered was not the job he ended up performing.
“Rather than the unique opportunity he was promised” during the recruitment process, once in position he was “stripped of any meaningful discretion and subject to the siloed and renegade whims of Zachary”, his lawsuit claims. Therefore, Rumanes has plenty of reason to be aggrieved with his former employer.
But, he says in his legal filing, he didn’t have to go digging about to find “systemic internal problems and misconduct” at Live Nation, because he could observe it all “in plain sight in materials and documents that routinely crossed his desk”. That included, he alleges, a business model that involved “mistating and exaggerating” financial figures to key partners “in efforts to solicit and secure business”.
Documents and budgets he dealt with, he claims, showed that Live Nation “inflated projected revenues across multiple venue development projects”, “materially understated capital expenditures on projects”, “concealed project delays” and “manipulated” data in presentations to “municipalities, investors and shareholders”.
Other allegations in Rumanes’ lawsuit link to some of the big political issues around Live Nation, including ‘junk fees’ in ticketing, and the high profile competition law concerns, where the operations of Live Nation’s concert promotions division and its ticketing business Ticketmaster are allegedly tied together.
Rumanes claims that Live Nation misrepresented fees on tickets it sold, and used Ticketmaster revenues to “inflate” financial forecasting for concerts, possibly in violation of rules put in place by the DoJ when Live Nation and Ticketmaster merged back in 2010.
Live Nation’s spokesperson says the company will respond to Rumanes’ specific allegations “through the appropriate legal process”. It remains to be seen if the ex-EVP has a legal case against his former employer, although whatever happens his claims will further damage Live Nation’s already flagging corporate reputation.