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Spokane, Washington  Est. May 19, 1883

Live Nation’s bid to avoid U.S. antitrust suit seen as likely to fail

Live Nation’s settlement proffer is not expected to forestall a U.S. Department of Justice antitrust case.  (Rafael Henrique/Dreamstime/TNS)
By Leah Nylen Bloomberg News

Live Nation Entertainment Inc. is set to meet with senior Justice Department officials in the coming weeks in a bid to stave off a potential antitrust lawsuit to break up the company.

It isn’t likely to work.

The Justice Department staff has recommended a suit against Ticketmaster, Live Nation’s ticketing arm, according to people familiar with the matter. Antitrust chief Jonathan Kanter – who makes the final decision – doesn’t favor settlements, especially not in this case, said the people, who asked not to be named discussing an ongoing investigation.

The DOJ’s antitrust enforcers have also been coordinating with state attorneys general – including Tennessee, California, New York and Washington, D.C. – in an effort to persuade them to join the lawsuit, said the people. The offices of the attorneys general didn’t immediately respond to requests for comment.

One of Live Nation’s meetings at the Justice Department is slated to be with Kanter himself, according to the people. That’s likely to be a so-called last rites meeting, where companies get a final opportunity to try to make their case before the agency sues.

Live Nation officials said they are open to negotiating a settlement to resolve the Justice Department’s nearly two-year investigation into its operations and believe a breakup would be unwarranted.

“We’re looking forward to our upcoming meeting with the division leadership and remain hopeful that we can amicably resolve any remaining disputes,” Live Nation President Joe Berchtold said on a call with investors last week. “But if not, we’re prepared to defend ourselves in court.”

A lawsuit could come as soon as this month, though a final decision hasn’t been made and the timing could slip, according to the people. The Justice Department declined to comment. Live Nation didn’t immediately respond to a request for comment.

The Biden administration has made competition a key pillar of its economic policy. Unlike some of his predecessors, Kanter has preferred to file lawsuits challenging mergers and illegal business conduct, instead of entering into settlements. The antitrust division is pursuing twin monopolization cases against Alphabet Inc.’s Google and in March sued Apple Inc. for allegedly using its power over app distribution on the iPhone to thwart innovations that would have made it easier for consumers to switch phones.

Ticketmaster says it controls 50% to 60% of the market for primary ticket sales, and 20% to 25% of the resale market. A report by the anti-monopoly group American Economic Liberties Project found that Live Nation controls more than two-thirds of the largest U.S. amphitheaters and arenas – 109 out of 156 – most of which use Ticketmaster.

Ticketmaster’s botched 2022 sale for Taylor Swift’s blockbuster Eras tour fueled a surge of criticism of the entertainment giant, which controls the largest concert promoter and the biggest U.S. ticketing company. Ticketmaster said the Eras tour failure, when tens of thousands of fans were unable to complete their ticket orders, resulted from “industrial-scale ticket scalping” fueled by automated “bots.”

U.S. lawmakers introduced a series of bills aimed at requiring greater transparency in pricing or banning multiyear exclusive contracts for ticketing and a Senate panel subpoenaed Live Nation and its Chief Executive Officer Michael Rapino.

At a public event hosted by Bloomberg this week, Kanter’s top deputy, Doha Mekki, hinted at additional cases in the works noting that the agency has several “mature late-stage investigations that we are looking forward to making enforcement decisions about.”

After investigating and deciding to sue, filing a complaint and having a public trial on antitrust issues serves an important function, Hetal Doshi, the Justice Department’s top antitrust litigator, said at the same event.

“The trial and the outcome is the end goal” of any case, said Doshi, who wasn’t speaking about any particular case. “There is enormous value in the transparency that it takes, that I think is an essential part of our public mission and mandate.”

Live Nation merged with Ticketmaster in 2010. President Barack Obama’s Justice Department reviewed the transaction and allowed it to move forward as part of a settlement in which the company promised it wouldn’t retaliate against concert venues that opted against using Ticketmaster.

The Trump administration found Live Nation had repeatedly violated that promise and modified the settlement in 2019 to impose an external monitor to investigate further allegations. The Biden administration opened a new probe of the company in 2022 amid continued concerns that Live Nation hasn’t abided by the settlement terms.