The United States Justice Department is reportedly probing business practices and reported threats made by Live Nation.
According to a long piece by the New York Times on Live Nation and the competition, or lack thereof, in the live music business, the Justice Department seems to be having some regrets about allowing Ticketmaster and Live Nation to merge in 2010. Live Nation was already the world’s largest concert promoter and Ticketmaster the largest ticket provider and together, they have created a monopolistic behemoth that reportedly seems to be bullying venues, artists and others into working with them.
The article cites several examples of the rivalry between Live Nation and the second largest promoter in the United States, AEG. One example happened in 2013 where a Matchbox Twenty show in Atlanta bypassed the city’s Gwynett Center for another venue in town. Live Nation said the decision wasn’t because the Gwynett Center chose AEG ticketing over Ticketmaster, but a Ticketmaster rep reportedly said when asked why the move happened, "Three letters. Can you guess what they are?"
The article goes into the cosent degree that Live Nation had to sign with the DOJ at the time of the merger. One main component was that they couldn’t use the two companies to influence a venue’s choice in promoter. If you don’t use Ticketmaster, Live Nation won’t book shows there, for example. To potentially get around this and it is allowed in the deal, they can “bundle” the services together and put Live Nation and Ticketmaster in one bundle (plus anything else). As a result, they come as a package deal and the pressure comes through a bundle.
In a speech last November, Beau Buffier, the chief of the New York Attorney General’s Antitrust Bureau was not so kind in how the ticket and live music marketplace was shaping up.
“The Consent Decree was supposed to prevent Live Nation from using its strength in live entertainment to foreclose competition in ticketing,” said Mr. Buffier. “But it is now widely seen as the poster child for the problems that arise when enforcers adopt these temporary fixes to limit the anticompetitive effects of deeply problematic vertical mergers.”
Ticketmaster President Jared Smith wrote a long response to the article on the company website. Like really long. He goes on to say everything is false, they are better than everyone, invest more money, were fully vetted by the DOJ etc. He says in one part, “The New York Times article suggests that any benefits of being a vertically integrated company are, in and of themselves, anticompetitive. They insinuate that we 'condition' content. That we ‘retaliate’ when Ticketmaster is not selected as a venue’s ticketing partner. In short, they say we have stifled competition.
The reality is that none of these things are true. It is absolutely against Live Nation and Ticketmaster policy to threaten venues that they won’t get any Live Nation shows if they don’t use Ticketmaster. We also do not re-route content as retaliation for a lost ticketing deal. Live Nation is the most artist-focused company in the world, and misusing our relationship with artists to ‘settle scores’ with venues would be both bad business and counter to our core beliefs.”
AEG does admit that they have made missteps and haven’t been as technologically advanced as say Live Nation. However any reported threats and anti-competitive behavior should be investigated.