Live Nation/Ticketmaster Lawsuit Explained: Why the Justice Department Wants to Break Up the Company
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Given that Ticketmaster is essentially the only live-event ticket seller in America, the company is shockingly bad at what it does. Of the many times America’s virtual live-event ticketing monopoly has thoroughly screwed up, the botched presale for Taylor Swift’s Eras Tour stands out. But that is just one example that got splashed across the headlines; ticket sales for Bruce Springsteen and Ed Sheeran suffered the same fate, and The Cure’s lead singer, Robert Smith, said he was “sickened” by the outrageous fees Ticketmaster charged fans to get into their shows. A cacophony of cries from artists and fans alike has been ringing out since seemingly forever: Ticketmaster sucks!
The Swift debacle was so public and so outrageous, it triggered a cascade of spite and venom that flew at Ticketmaster and its parent company, Live Nation, from every direction, including Swifties, anti-monopoly groups, and lawmakers. Whether folks thought Ticketmaster was malicious for charging wildly high fees or incompetent for repeatedly flubbing ticket sales and failing to stop scalpers from jumping to the front of the line, it didn’t matter; in every instance, the company appeared too powerful and unaccountable, and the chorus called for the Live Nation/Ticketmaster monster to be broken up.
In late May, the cries of that chorus were finally answered. The Department of Justice sued Live Nation in federal court over its multi-armed monopoly in the industry, with the explicit goal of breaking up the company being part of its ultimate goal to “restore competition to this industry.” (Live Nation blamed the lawsuit on “political pressure,” claiming the case “ignores everything that is actually responsible for higher ticket prices, from increasing production costs to artist popularity to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost.”)
The suit has been a long time coming. It could also be seen as a mea culpa by the same government agency that, more than a decade ago, made the Ticketmaster problem far worse than it would have been otherwise. To understand how and why the Justice Department allowed Live Nation to secure a death grip on the live music industry — wresting control from venues, promoters, artists, and fans — we should look back at the industry and government policy.
Before the Ticketmaster and Live Nation merger in 2011, the companies were the twin centers of power in the live music world. Ticketmaster, of course, was the most powerful ticketing company in America, particularly for concerts and tours by big stars who perform in big venues; it also managed more than 200 artists by acquiring a controlling interest in the firm Front Line Management Group. Live Nation, meanwhile, was the country’s largest concert promoter, a major venue owner and operator, and a major artist manager in its own right, with the likes of Jay-Z and Madonna on its roster. Combined, the company would dominate nearly every aspect of the live music world, dictating which big stars would play in which venues on which dates, and, in turn, how much fans would have to pay to see them.
Critics clamored for the government to block this mega-merger when the companies announced it in 2009. Their concerns made sense. It wasn’t hard to imagine Live Nation tying Ticketmaster to its dominant concert promotion business, forcing artists, venues, and fans to use Ticketmaster whether they wanted to or not — shutting out other ticketing companies from those venues and tours in the process.
The Justice Department, and the country’s other antitrust enforcer, the Federal Trade Commission, reviews these kinds of mergers as part of its core job to protect the economy. Under the law, the agency is supposed to examine all corporate deals above a certain size and stop the ones that look dangerous or, as the law says, “tend to create a monopoly.” On that front, the Live Nation/Ticketmaster deal looked like it had obvious problems: For instance, the country’s de facto concert promotion monopoly wanted to buy a live-event ticketing monopoly, creating an even bigger monopoly.
Despite the Justice Department's long and proud history of busting up corporate titans like Standard Oil and AT&T for their monopoly abuses, the agency, around 1980, got infected with the same brain worms that began plaguing most other regulatory agencies in Washington. For regulators, big corporations were suddenly beautiful. At the time, no merger was too big or too bad, no abuse too egregious. By the time the Ticketmaster/Live Nation deal came around, that philosophy was baked into the agency's operations. The government forced the companies to license and sell off some of their tech, made them promise to behave, and then just let the merger happen.
That was nearly 15 years ago. Since then the company has swelled in size and power. Live Nation put on a staggering 50,000 live events last year and controls around 60% of concert promotions at major venues. Ticketmaster tickets around 80% of all major concerts and tours. Overall, the company made nearly $23 billion in revenue last year — a record haul. Meanwhile, Ticketmaster’s fees became a cash cow for Live Nation; today, fees can account for more than 80% of the full price of a concert ticket.
For the government, last month’s lawsuit feels almost like a kind of public apology for getting fans, artists, and venues stuck in this monopoly-made mess in the first place. Justice Department officials made it clear: This lawsuit isn’t about the inconveniences and annoyances Ticketmaster forces on its customers, even those as public as Swift’s tour presale; the lawsuit, the government says, is about the overwhelming control Ticketmaster and its parent company Live Nation have over the live music industry and how they’ve used that power to snuff out any and all threats to their throne.
That outsize power wouldn’t have been possible without the government’s initial decision to allow the merger to happen. The damage has been done — neither you nor I nor anyone else is getting back the money we’ve spent on Ticketmaster fees. Fortunately, though, for music fans and everyone else, this lawsuit is the latest sign that regulators have gotten back to doing their basic job of stopping corporate power from snowballing out of control — and that they’re willing to make up for the mistakes of the past.
This return to duty is in part because of the leaders now in charge of our anti-monopoly agencies: Jonathan Kanter at the Justice Department and Lina Khan at the Federal Trade Commission. But it’s also down to artists and fans banging the drum about how terrible Ticketmaster has been to deal with. Were it not for the troves of Swifties calling for the company’s breakup, the spotlight on the company’s wrongdoing might not have been as bright. Maybe the lawmakers who chastised the company, and the Justice Department that ultimately sued to stop the company’s monopoly, would have focused their attention elsewhere. The power resides with the people, as it should.
Even if the government can compel the judge overseeing the case to break up Ticketmaster/Live Nation — a big if due to the current pro-corporate state of antitrust law — that result is many months away. With any luck, though, the government’s antitrust case will mean a better music industry for everyone involved.
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Originally Appeared on Teen Vogue
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