In a downtown Manhattan courtroom on Monday, lawyers for the U.S. Justice Department and 40 state and district attorneys general warned the jury that the concert industry was being squeezed by a monopolist: Live Nation-Tickmaster. David Dahlquist, lead attorney for the DOJ, alleged that by gaining dominance over ticketing and the use of large amphitheaters by artists, Live Nation created a “flywheel” of power that forced the venue’s customers to remain within its ecosystem. When they considered leaving it threatened them or retaliated against them. To try to win business, Dahlquist said, venues worried about losing out on Live Nation shows by switching to ticketing competitors need to offer “retaliation insurance.” “Today, the concert ticketing industry is broken,” Dahlquist told the jury in his opening statement. “It is controlled by Live Nation and its owned company Ticketmaster.”
According to Live Nation, the story is more exciting. David Marriott, lead counsel for Live Nation, said the company’s goal is to spread joy and, in fact, there are more concert venues than ever before. Even the opening slides were energetic, sparkling with images of colorful concert and tour posters from famous artists like Bad Bunny and Ariana Grande. “Saying you’re better is no threat!” In one memorable slide the jury was told that the last word was written in red to emphasize the point.
The next six weeks will see a long-awaited court battle over whether Live Nation-Ticketmaster illegally monopolized the markets for ticketing at major concert venues and the use of large amphitheaters by artists. A finding of liability by a jury could potentially lead to the breakup of the company, although Live Nation argues that it should be off the table based on some of the claims being dismissed before trial. A loss for the government would be a blow to its aggressive anti-monopoly effort in recent years, at a time when recent changes to the antitrust division have raised questions about corporate influence.
On the first day in court, the government and Live Nation painted competing pictures of a company that is omnipresent in the music business. Behind the scenes, they engaged in aggressive advocacy – before the jury entered the courtroom, Judge Arun Subramaniam warned the lawyers that they had detected “gamesmanship” in attempts to blow each other’s performance or arguments out of the case.
To win, the DOJ and the states need to prove that Live Nation-Ticketmaster – which is estimated to have an 86 percent market share in primary ticketing for major concert venues, and a 78 percent market share for the use of large amphitheaters by artists – has monopoly power in the relevant markets, and that it illegally used that dominance to harm competition by making it difficult for customers to abandon a rival. A prime example of the plan to use it to showcase this is the conversation with Barclays Center, which moved to Ticketmaster as a vendor, then back again. “When they tried to switch, they were penalized,” Dahlquist said.
“There is no harm done here, because we have done nothing wrong.”
Ticketmaster is expected to go on trial over the disastrous Taylor Swift meltdown, which the DOJ cites as evidence of a monopolist’s underinvestment in its technology. Marriott framed this as a cyberattack that only Ticketmaster’s systems could handle, and ultimately it did. While the state plaintiffs are seeking damages for what they believe Ticketmaster overcharged customers in a fair market, Marriott said, “There are no damages here, because we did nothing wrong.”
Marriott attempted to humanize the business, introducing his trial team and some executives into the courtroom, who stood and smiled at the jury. Although Live Nation and Ticketmaster are corporations, he said, they are made up of “men and women who have a very strong desire to do the right thing.” Marriott recounts his experiences with live events ranging from the circus as a child to an “awkward” first date at a Lionel Richie concert. “Live Nation and Ticketmaster are about bringing joy to people’s lives and doing it in a legitimate way,” he said.
Ticketmaster takes a small cut of the money from ticket sales, with a rate of just 5 percent, Marriott said. Marriott said a slide by large venues such as the Intuit Dome, owned by former Microsoft CEO Steve Ballmer, and their owners, and that the venue operators who are “allegedly being abused” by the business are actually “affluent people.”
“Live Nation and Ticketmaster are about bringing joy to people’s lives and doing it the right way.”
Marriott argued that Live Nation-Ticketmaster’s market share is actually only 40 percent in ticketing and 18 percent in venues, when you count the things the DOJ left out, like stadiums and most arenas, which are often used for sporting events as well as concerts. And it wasn’t retaliation that brought Barclays Center back with Ticketmaster, but the fact that “SeatGeek lost its job,” he said. Marriott acknowledged that the jury could hear about a call with Barclays Center leadership where Live Nation CEO Michael Rapinoe “lost his temper” and “dropped an F-bomb”, but these were merely hints of frustration about losing the contract, not true threats. After all, he said, telling a customer there will be consequences for choosing a substandard product is telling it like it is.
That call and other details could emerge on Wednesday, when the DOJ plans to call former Barclays Center CEO John Abbamondi to testify. Shortly thereafter, the jury is expected to hear from the top executive of the Minnesota Wild hockey club, a venue management company, and the co-founder and CEO of SeatGeek. During the test, they’ll likely hear from artists like Rapinoe, Kid Rock and Ben Lovett of Mumford & Sons, and even some music fans. Then, the jury will be out on whether the concert industry is really as joyful as Live Nation claims.
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