Instead of pursuing a jury trial against Live Nation-Ticketmaster, as expected, the Justice Department announced a settlement on Monday, leaving aside what used to be at the top of its wish list: a breakup.
The DOJ received a series of concessions that some industry stakeholders found unsatisfactory and even shocking. There are some bright spots that spoke to The Verge Said: For example, a 15 percent limit on Ticketmaster service fees at amphitheaters owned or operated by Live Nation, and a pledge to give artists greater transparency on their ticket sales. But they were not convinced that the settlement would lead to widespread change in favor of the lawsuit. Many are expecting the state attorney general to continue his case in pursuit of broader remedies, even though there is no guarantee that a jury will rule in his favor or that Judge Arun Subramaniam will grant a more dramatic request.
“The topic of my discussion with partner organizations and members today is: Who asked for this?” said Stephen Parker, executive director of the National Independent Venue Association (NIVA). “Most of us are surprised. One, why now? Two, why this? And three, where did this come from.” Parker said many of the provisions in the agreement either propose solutions that their members won’t care to take advantage of – like using multiple ticketing systems for an event – or are so watered down that they’re hardly worthwhile.
Kevin Erickson, director of the artist advocacy group Future of Music Coalition, echoed this, pointing to a provision requiring Ticketmaster to promise to open its backend to competitors. During the trial, witnesses (including the CEO of competitor SeatGeek) described the Ticketmaster software as resembling “something from the 1980s” or “codes flying across the screen”. math questionAnd the DOJ looked into issues with Ticketmaster selling tickets to Taylor Swift’s Eras Tour (the company blamed a cyberattack). “I don’t understand who is asking for this. They just argued that Ticketmaster’s tech stack is held together with duct tape, and so why is giving people access to Ticketmaster’s tech stack a solution?”
“They simply argued that Ticketmaster’s tech stack is held together with duct tape, and so why is giving people access to Ticketmaster’s tech stack a solution?”
Both Parker and Erickson said the company’s agreement to sell exclusive booking agreements for 13 amphitheaters in the U.S. covers a relatively small portion of the venues it controls. The DOJ alleged Live Nation “owns, operates, or exclusively books at least 40 of the top 50 and 60 of the top 100 amphitheatres in the United States.” The company says it is not actually selling any amps as part of the agreement, but rather letting other promoters book those 13 venues. Erickson said there are some areas where an outdoor venue may face weather constraints that could shorten its season or create an uncomfortable environment for summer viewing. “Is this a concession or is this moving the business in a direction that is actually going to improve the company’s margins?”
Leaving the decision up to the jury and judge is riskier than taking a known deal. Even if the suit states that a jury agrees that Live Nation is an illegal monopolist, the judge may not give them all the remedies they want. The Google Search case may serve as an example of such a pyrrhic victory, where the government won most of its claims in the liability phase, but the judge granted far fewer remedies than the DOJ sought to resolve its concerns. For his part, Live Nation CEO Michael Rapinoe said in a statement that the agreement is “a major step toward improving the concert experience for artists and fans across the United States.”
“This technology will give venues, promoters, and artists the freedom to reach fans through the markets they choose,” Omed Assefy, acting head of the DOJ Antitrust Division, said in a statement. “Today, ticketing fees remain high because venues are locked into long-term contracts that bind how tickets are distributed. Under this deal, Live Nation will be required to limit the number of third-party distributors they offer tickets to and limit the length of their contracts, opening up competition in the ticketing market. These changes will provide meaningful relief for consumers.”
But with testing limited — at least for now — the public won’t get a clear look at what the government accused Live Nation of doing in the first place. “With the jump from transmission of evidence to treatments, it becomes especially difficult to decide whether the punishment fits the crime,” Erickson said. “This was part of the testimony I was looking forward to, hearing firsthand from some of the people on the witness list about the barriers they have experienced in gaining access to the amphitheater and establishing amphitheater tours.” Subramaniam said if the case resumes on Monday, the jury will continue the trial of Jay Marciano, COO of AEG, which is a Live Nation-Ticketmaster rival in both concert promotion and ticketing. The plaintiffs’ witness list also includes other venues, Live Nation executives and artists, including Kid Rock, who have not yet testified.
The agreement includes an anti-retaliation provision, but it was already central to the consent decree between Live Nation and the DOJ, which was first entered in 2010, and the DOJ’s lawsuit claims it did not end the practice.
“The way this deal works it’s just going to be the same old, same old.”
Critics of the deal say that without structurally breaking up the company and changing its incentives, there will not be enough change. Senator Amy Klobuchar (D-MN) said, “Today’s agreement does nothing to reduce costs or preserve independent venues and protect fans. They should be torn up.” The Verge. “With the way this agreement works it’s just going to be the same old, same old.”
Klobuchar plans to introduce a new bill to strengthen the courts’ review of antitrust settlements, including giving states the right to play a larger role and ensuring that courts cannot approve settlements that fail to resolve antitrust issues. Review under the Tunney Act is already in place to ensure that antitrust settlements are in the public interest, though Syracuse law professor Shubha Ghosh says it’s rare for a judge to reject a deal entirely. Under Tunney Act review, he said, the court will evaluate whether the parties are likely to return to the same issues, and whether the motion creates new problems.
What about the outcome that many music fans hope for: lower ticket prices? Limiting fees on tickets could help, but Bill Warde, director of the Bandier Music Industry Program at Syracuse University, said the issue is bigger and more complex than this case alone can solve. “For the average 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,” Wrede said. “I don’t think this agreement, and I don’t think almost any potential outcome, even from one that the states are continuing to pursue, is going to move the needle on that issue.” That’s because another part of the problem with skyrocketing ticket prices is the huge demand for tickets that exceeds supply, Wrede said.
Plus, as long as Live Nation and Ticketmaster are linked, the company could theoretically shift lost revenue from the fee cap to other areas. This could either lead to artists being offered less, Wrede said, or increasing ticket prices to the underlying cost before fees. A similar dynamic may hold for the company’s power at concert venues. “As long as Live Nation still owns Ticketmaster, whether or not the Justice Department has proven anything, whether Live Nation is threatening people with it or not, the leverage is very clear and implicit,” Wrede said. “The thing about leverage is that if you really have it, you usually don’t need to throw it around.”
Update, March 11: Added comments from Omed Assefy, acting head of the DOJ Antitrust Division.
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