Maryland joined the Justice Department, 28 other states and the District of Columbia on Thursday in an antitrust lawsuit against Ticketmaster and its parent company Live Nation Entertainment, alleging a monopoly in the live entertainment industry that harms concertgoing fans.
The move could retune the music industry by splitting up the concert promotion and ticketing giant, and comes on the heels of state legislation regulating online ticket sales signed into law this month by Gov. Wes Moore.
“When the world’s largest live entertainment company illegally dominates ticket sales, artist management and promotion, and venue choices, fans are the ones who are hurt the most,” Attorney General Anthony Brown said in a statement announcing the lawsuit Thursday morning. “This unlawful conduct drives up prices, leaves fans with poor customer service, and limits opportunities for people’s access to live entertainment.”
The antitrust lawsuit, filed in the U.S. District Court for the Southern District of New York, claims that Live Nation has violated federal and state laws, including in Maryland.
Live Nation, the lawsuit alleges, “engages in threats … and pressure campaigns to nullify rivals” and uses long-term exclusive contracts to prevent concert venues from working with competing ticketers. The lawsuit draws attention to what it calls Live Nation’s “flywheel.”
“The flywheel is Live Nation-Ticketmaster’s self-reinforcing business model that captures fees and revenue from concert fans and sponsorship, uses that revenue to lock up artists to exclusive promotion deals, and then uses its powerful cache of live content to sign venues into long term exclusive ticketing deals, thereby starting the cycle all over again,” a DOJ statement says.
The lawsuit also scrutinizes Live Nation’s business behavior with Oak View Group, which it calls a “potential competitor-turned-partner.”
Oak View Group owns and operates Baltimore’s CFG Bank Arena, which opened last year after a $250 million renovation and has drawn big names to the city. The DOJ alleged that Live Nation-Ticketmaster “exploits its longtime relationship” with Oak View Group, which it said “has avoided bidding against Live Nation for artist talent and influenced venues to sign exclusive agreements with Ticketmaster.”
In a Thursday morning email, Live Nation rebuked the lawsuit’s claim that it is a monopoly, saying that artist teams set ticket prices and venues reap the bulk of ticket fees. The company said that its net profit margin in the past fiscal year was just over 1%, and that Ticketmaster’s market share has decreased since it merged with Live Nation, a fate it attributed to competition.
“The DOJ’s complaint attempts to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry,” Dan Wall, Live Nation’s executive vice president for corporate and regulatory affairs, said in a statement. “It blames concert promoters and ticketing companies — neither of which control ticket prices — for high ticket prices. It 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.”
“It is also absurd to claim that Live Nation and Ticketmaster are wielding monopoly power,” Wall continued. “The defining feature of a monopolist is monopoly profits derived from monopoly pricing. Live Nation in no way fits the profile. … The company is profitable and growing because it helps grow the industry, not because it has market power.”
Brown said Thursday that Live Nation is the “exclusive ticketer to nearly all large concert venues” in Maryland, D.C. and Virginia, listing Pier Six Pavilion in Baltimore, The Fillmore Silver Spring and Maryland Hall in Annapolis as local examples.
Live Nation owns or has control of more than 60 of the top 100 amphitheaters in the country, for a total of over 265 North American concert venues, the Justice Department said. It merged with Ticketmaster in 2010.
Thursday’s lawsuit calls for enforcement to end Live Nation’s alleged “anticompetitive practices” and a jury trial — plus the divestiture of Ticketmaster.
“It really is incumbent upon the federal government to take action against Ticketmaster and Live Nation. Everyone knows the behemoth that is Ticketmaster,” said Sen. Dawn Gile, a Democrat who represents part of Anne Arundel County.
This year, Maryland legislators passed a bill sponsored by Gile that will protect consumers when they purchase event tickets online.
Under the legislation, electronic marketplaces that enable the sale, purchase or resale of event tickets must disclose the total price of tickets, including all fees and taxes, in addition to showing a breakdown of fees that contribute to the total cost, not including shipping fees for physical tickets.
The law, which will go into effect July 1, will also prohibit the sale of speculative tickets — tickets that are not in the physical possession of, owned by, or under contract to be transferred to a reseller.
It also requires the attorney general’s office to conduct a review of Maryland’s event ticket market, including how brokers and resellers obtain tickets and how they price them in comparison to their face value.
“There were some questions that were asked of me … as to why my bill seemed to go more after the secondary market,” including platforms like StubHub and SeatGeek, Gile said. “The reason that I gave then was that the main attack against Ticketmaster is really on the basis of federal law.”
She said high ticket prices have frustrated fans and that she anticipates a positive outcome for fans in Maryland if the lawsuit is successful.
“I’m glad that Maryland’s stepping up and being a leader on this issue, and recognizing the importance of protecting consumers,” she said. “I think we’re going to see a fair marketplace for buying tickets, but I think that there’s still a lot more work ahead.”
