The Live Nation settlement has industry insiders baffled

Instead of moving forward with a jury trial against Live Nation-Ticketmaster as planned, the Justice Department announced a settlement Monday that omitted what was once at the top of its wish list: a breakup.

What the DOJ got was a series of concessions that some in the industry found unsatisfactory, even confusing. There are some positives, those we spoke to The edge said: a 15% cap on Ticketmaster service fees at amphitheaters owned or operated by Live Nation, for example, and a commitment to giving artists more transparency over their own ticket sales. But they remain unconvinced that the deal would bring about the large-scale change advocates of the lawsuit want. Many hope that state attorneys general will pursue their case by seeking broader remedies, even though there is no guarantee that a jury will rule in their favor or that Judge Arun Subramanian will grant more dramatic requests.

“The theme today in the discussions I had with partner organizations and members was: who asked for this? said Stephen Parker, executive director of the National Independent Venue Association (NIVA). “Most of us are just perplexed. One, why now? Two, why this? And three, where did this come from.” Parker said several provisions of the agreement offer solutions that its members probably won’t want to take advantage of — such as using multiple ticketing systems for an event — or are so pared down that they make little sense.

Kevin Erickson, director of the artist advocacy group Future of Music Coalition, echoed that, pointing to a provision that Ticketmaster committed to opening its backend to competitors. At trial, witnesses (including the CEO of competitor SeatGeek) described Ticketmaster software as “something out of the 1980s” or as “code flying across the screen” in The matrixand the DOJ noted problems Ticketmaster encountered selling tickets for Taylor Swift’s Eras tour (the company blamed a cyberattack). “I don’t see who’s asking that. They just argued that Ticketmaster’s tech stack is held together by duct tape, and so why is giving people access to Ticketmaster’s tech stack a cure?”

Both Parker and Erickson said the company’s deal to divest exclusive booking deals for 13 U.S. amphitheaters covers only a relatively small portion of the venues it controls. The DOJ asserted that Live Nation “exclusively owns, operates, or manages at least 40 of the Top 50 and 60 of the Top 100 amphitheaters in the United States.” The company says it will not sell any amps as part of the settlement, but will instead let other promoters book at those 13 venues. Erickson noted that some appear to be in areas where an outdoor venue might face weather constraints that would shorten its season or create an uncomfortable viewing environment in the summer. “Is this a concession or is this a move into areas of business where you’re actually going to improve the company’s margins?”

Leaving the decision to the jury and judge is riskier than entering into a known agreement. Even if the affected states get a jury to recognize that Live Nation is an illegal monopoly, the judge cannot grant all the remedies he wants. The Google search case could serve as an example of such a Pyrrhic victory, in which the government essentially won its case at the liability stage, but the judge awarded relief far less than the DOJ had sought to resolve its concerns. Live Nation CEO Michael Rapino said in a statement that the settlement “marks a major step in improving the concert experience for artists and fans across the United States.”

But with the trial cut short — at least for now — the public won’t have as clear a picture of what the government accused Live Nation of doing in the first place. “Beyond the presentation of evidence and appeals, it is particularly difficult to determine whether the sentence fits the crime,” Erickson said. “That was a part of the testimony I was looking forward to, hearing more directly from some of the people on the witness list about the barriers they faced in accessing lecture theaters and arranging lecture theater tours.” Subramanian said that if the case resumes Monday, the jury will continue to hear from Jay Marciano, COO of AEG, a rival to Live Nation-Ticketmaster in concert promotion and ticketing. There are also other venues, Live Nation executives and artists, including Kid Rock, on the plaintiffs’ witness list who have yet to testify.

The settlement includes an anti-retaliation provision, but it was already a central part of the consent decree between Live Nation and the DOJ first reached in 2010, and the DOJ suit claims it did not end the practice.

Critics of the deal say that without a structural separation of the company and a change in its incentives, the changes will not be enough. “Today’s settlement does little to reduce costs, preserve independent sites, and protect fans. They should be dismantled,” said Sen. Amy Klobuchar (D-MN). The edge. “It will just be the same thing, the same thing with the way this regulation works. »

Klobuchar plans to introduce a new bill to strengthen court review of antitrust agreements, including giving states the power to play a greater role and ensuring that courts cannot approve agreements that fail to resolve antitrust issues. Reviews under the Tunney Act already aim to ensure that antitrust deals are in the public interest, although Syracuse law professor Shubha Ghosh says it’s rare for a judge to completely throw out a deal. In reviewing the Tunney Act, the court will assess whether the parties are likely to return to the same issues and whether the proposal creates new problems, he said.

What about the outcome many music fans hoped for: lower ticket prices? Capping prices on tickets could help, but Bill Werde, director of the Bandier Program for the Music Industry at Syracuse University, said the problem is even larger and more complex than this one case could solve. “For the typical music fan, they just want to know that they can get tickets to the shows they want to go to and they want those tickets to be affordable,” Werde said. “I don’t think this settlement, and I don’t think a likely outcome even if the states continue to sue, will move the needle on this issue.” Indeed, another part of the problem with skyrocketing ticket prices is massive demand for tickets outstripping supply, Werde said.

Additionally, as long as Live Nation and Ticketmaster are linked, the company could theoretically shift lost revenue from fee capping to other areas. That could either offer less to artists or drive up ticket prices in underlying costs before fees, Werde said. A similar dynamic could also persist when it comes to corporate power over music venues. “As long as Live Nation still owns Ticketmaster, whether the Department of Justice has proven anything or not, whether Live Nation threatens people with this or not, the influence is pretty clear and implicit,” Werde said. “The problem with leverage is that if you really have it, you usually don’t need to use it.”