Connecticut joined the Justice Department and 29 other states Thursday in an antitrust suit aiming to break up Live Nation Entertainment, a dominant player in the concert business through its ownership of Ticketmaster and control of venues throughout the U.S.
The 128-page lawsuit filed in U.S. District Court in Manhattan accuses Live Nation of exercising monopoly power in violation of the Sherman Antitrust Act, driving up ticket costs for fans, harming performers and erecting barriers to independent promoters and other competitors.
In Connecticut, Live Nation owns amphitheaters in Hartford and Bridgeport and the Toyota Oakdale Theatre in Wallingford and typically is the promoter for major acts playing other venues, such as the XL Center in Hartford. The company owns or controls more than 265 venues in North America.
Connecticut’s attorney general, William Tong, said Live Nation is a vertically integrated monopoly that uses its “immense monopoly market power to hurt competitors, to limit choice for consumers, to crush competition and ultimately to stifle innovation.”
Live Nation quickly pushed back at the lawsuit’s claim that its merger with Ticketmaster, which the Justice Department allowed during the Obama administration, was responsible for “fan frustration” or that any promoter or ticketing company controlled 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,” said Dan Wall, the executive vice president of Live Nation Entertainment.
Connecticut’s biggest name in concert promotion, Jim Koplik, is president of the company’s Live Nation Connecticut, the operator of Oakdale, Xfinity Theater in Hartford and the new Hartford HealthCare Amphitheater in Bridgeport.
Tong made a courtesy call Wednesday night to Koplik, who lives in Stamford, the city Tong once represented in the House of Representatives. Koplik could not be reached for comment Thursday.
The Justice Department says Live Nation directly manages 400 musical acts and controls about 60% of concert promotions at major venues and 80% of ticketing, and it blames the company for the add-on fees that can sharply boost the actual price of tickets.
“The real world, practical costs of Live Nation’s strategy are well known. Public frustration with concert ticket pricing and sales is a constant drumbeat. The fees that must be paid to attend a live concert in America far exceed fees in comparable parts of the world,” the suit says.
The company’s dominance and performance became a national issue, drawing the attention of the U.S. Senate, after a botched presale of Taylor Swift tour tickets on Ticketmaster.
U.S. Sen. Richard Blumenthal, one of Tong’s predecessors, was quick to praise the litigation.
“This enforcement action should be music to the ears of consumers — a strong step supporting fair competition,” Blumenthal said. “Fans, artists, venues, small promoters and many others will enjoy enormous benefits.”
Live Nation said those expectations will not be met.
“The DOJ’s complaint attempts to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry,” Wall said. “It blames concert promoters and ticketing companies — neither of which control ticket prices — for high ticket prices.”
Service charges on Ticketmaster are no higher than elsewhere, and frequently lower, the company said, and it net profit margin is at the low end of profitable S&P 500 companies.
At least short-term, the lawsuit landed a solid blow on Live Nation’s stock price, which fell steadily throughout the day. It lost more than 8% in value, falling to $93.14 by mid-afternoon.
Live Nation and its corporate predecessor, SFX Entertainment, once were portrayed as a counter balance to Ticketmaster, a company that flourished in the pre-digital age as supplier of printed tickets that could be purchased conveniently at music shops and other retailers, rather than lining up at the box office window.
In 2009, Ticketmaster and Live Nation announced a $2.5 billion merger deal that was decried by Bruce Springsteen, who said, “The one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing.”
The Obama administration’s Justice Department approved the merger in 2010, but the Biden administration now calls the company a “monopolist [that] serves as the gatekeeper for the delivery of nearly all live music in America today.”
Wall said Live Nation was “another casualty of this Administration’s decision to turn over antitrust enforcement to a populist urge that simply rejects how antitrust law works. Some call this ‘anti-monopoly,’ but in reality, it is just anti-business.”
He noted the Obama administration “saw it differently:” There was no legal basis for challenging a concert promoter from merging with a ticketing company.
“In one filing, it said that it had ‘determined that it could not prove that the vertical integration resulting from the merger would significantly harm competition in the concert promotion market.’ There is no factual basis for concluding otherwise today,” Wall said. “The world is a better place because of that merger, not a worse one.”