The United States Department of Justice (DOJ) is suing Live Nation. They think Live Nation has too much control over live entertainment. Live Nation not only controls concert ticket prices; they have dominion over who is allowed to play at major venues, how much artists get paid to perform there, and they hold shares through secondary entertainment companies such as artist management teams.
Live Nation owns Ticketmaster, Front Line Management Group, C3 Presents, AC Entertainment, Festival Republic, and Blockfest, in addition to their own merchandising, ticketing, planning and marketing services. The DOJ alleges that Live Nation is using its power unfairly, threatening to keep popular artists away from bigger venues if they don’t use Ticketmaster, and punishing venues who try and use other ticketing services. Most of the country is stuck under Live Nation’s thumb, and now it’s spreading throughout the globe as the entertainment giant purchases equity in more venues located in Australia, Canada, and Germany. They hold a majority stake in Brazil‘s Rock in Rio festival as well as Israeli Blue Stone Entertainment, and Philippines-based promoter Music Management International.
Live Nation has been reported in the past to use heavy-handed, defamatory tactics like directly using claims that producers “cannot afford talent to sufficiently stage” a particular venue, or issuing warnings to venues who try and use other ticketing systems/companies. These are just a small number of complaints that have been filed against them. Live Nation’s response the DOJ’s newest lawsuit is that “the government is simply being mean to big businesses” and denies doing anything wrong. And in technical terms, they’re not. Instead of competing fairly like most businesses, Live Nation forms alliances with other companies in order to avoid that competition. Of course, those strategies are shady; part of the DOJ’s complaint is in regards to Live Nation’s “anticompetitive practices”.
Anticompetitive Practices are defined by the Federal Trade Commission as “activities like price fixing, group boycotts, and exclusionary exclusive dealing contracts or trade association rules, and are generally grouped into two types: agreements between competitors, also referred to as horizontal conduct, and monopolization, also referred to as single firm conduct.”
Live Nation has the ability to determine how much artists get paid and where they play because they control so many parts of the concert business. They sell tickets, own venues, own management companies, and promote concerts.
The DOJ wants to break up Live Nation so that they can’t keep controlling everything. The idea is that this might make concerts fairer and maybe cheaper for fans; however, that’s not as realistic as they’d like to believe. Ticket prices are not determined by Live Nation alone. Prices are a combination of original ticketing plus add ons by promoters and venues. In addition, breaking up Ticketmaster and Live Nation would not stop the former from locking venues into contracts.
There is much more to Live Nation’s power than the merger with Ticketmaster and concert pricing. Live Nation has many irons in the pot and can afford future partnerships (and long, drawn out legal battles). In the simplest of terms, it’s like if one kid owned all the playground equipment, decided who could play, and made everyone pay extra to use the swings. The government is saying that’s not fair and wants to make sure everyone gets a chance to play. But as any adult with an ounce of life experience knows, there is always a bigger economic picture.
