SeatGeek was approaching an agreement poised to significantly elevate its ticketing operations. The firm was engaged in discussions with the Dallas Cowboys, seeking to manage primary ticket sales at their venue. However, a major obstacle emerged: “the concert dilemma.” The team apprehended that should it discontinue using SeatGeek’s competitor, Ticketmaster, Ticketmaster’s holding corporation, Live Nation, might withdraw musical performances from the team’s stadium, thereby jeopardizing a crucial income source.
This is how SeatGeek CEO Jack Groetzinger recalls the events. The agreement eventually concluded favorably, leading to an exclusive ticketing collaboration unveiled in 2018. Yet, for a period, Groetzinger testified before a Manhattan jury last Friday that “the concert dilemma was the sole impediment we could not overcome, and it appeared likely to derail the entire undertaking.”
In the initial days of the government’s month-and-a-half-long antitrust proceedings against Live Nation-Ticketmaster, reprisal — an accusation Live Nation vehemently disputes — emerged as a central motif. Numerous industry insiders held the conviction that Live Nation’s event organizers would decline to book shows at facilities not utilizing Ticketmaster, multiple witnesses attested. This actual or imagined menace generated such apprehension, witnesses asserted, that significant entertainment locations would refuse to transition to what they considered a superior ticketing solution, merely to avoid incurring Live Nation’s displeasure. As a resolution is reportedly forthcoming, alterations might be enacted — yet not the complete dissolution the government proposed during the proceedings. The numerous individual states party to the litigation, meanwhile, will concurrently need to determine their next course of action.
SeatGeek wasn’t certain Live Nation would retaliate. However, the apprehension among venues regarding potential concert losses was detrimental to SeatGeek’s commercial interests, Groetzinger noted. With the Cowboys agreement seeming to falter, a SeatGeek employee proposed an audacious concept: What if they provided indemnification against reprisal? The company could assure venues that, should Live Nation bypass them for a performance, it would furnish sufficient funds to compensate for the anticipated income.
The proposition made Groetzinger “profoundly uneasy,” he testified. SeatGeek would have to allocate a substantial amount of capital for this coverage. Even if they never had to disburse funds, Groetzinger stated, the company would need to offset those resources through other provisions in the agreement — in his words, “the facility receives a less favorable arrangement.” Nevertheless, SeatGeek’s board eventually endorsed the proposition, and it secured the Cowboys agreement. Subsequently, providing indemnification against reprisal was adopted as a final recourse. “It’s truly daunting, but if we perceive no alternative, we will proceed,” he remarked.
To date, two venues that enrolled in indemnification against reprisal have asserted the clause had been activated — one being the Cowboys. In 2022, the team informed SeatGeek they were convinced Live Nation overlooked their venue for a Coldplay performance. To preserve the rapport with SeatGeek, Groetzinger mentioned, the Cowboys did not pursue the claim then.
The dangers are amplified with more modest venues, where there is a broader selection available to performers and event organizers, Groetzinger stated.
Earlier in the week, the panel listened to testimony from two individuals with direct oversight of arena ticketing operations: John Abbamondi, the prior Chief Executive Officer of Barclays Center owner BSE Global, and Mitch Helgerson, head of revenue for the Minnesota Wild hockey team. The Wild evaluated a proposal from SeatGeek, but Live Nation-Ticketmaster purportedly menaced to relocate its performances to the Target Center in proximate Minneapolis, a “nearly ruinous” (in Helgerson’s words) outcome that even indemnification against reprisal would fail to remedy. Barclays discussions progressed more favorably, and SeatGeek inked a seven-year agreement in 2021. But swiftly, the entire arrangement unraveled.
SeatGeek undertook considerable concessions to secure Barclays. BSE estimated the venue might forfeit $20 million should Live Nation bypass the facility, a sum SeatGeek was unable to fully compensate for directly, so it presented the subsequent most viable alternative: $20 million of equity in its enterprise. The deal would be “among the least lucrative agreements we concluded,” Groetzinger stated. “But we thought it was worth doing because this was going to be such a pivotal juncture for our company.” In fact, in the year following SeatGeek’s agreement execution, it succeeded in incorporating three NFL stadia and two additional arenas to its roster of clients, he mentioned.
But it swiftly became apparent that the volume of Barclays performances was “significantly beneath our projections,” Groetzinger recalled. Abbamondi’s agreement was not extended, and the arena commenced “voicing grievances about matters that were either illogical or quite minor.” While some were valid problems with SeatGeek’s platform that it endeavored to rectify, others were data input errors generated by BSE’s internal ticketing personnel, which Abbamondi similarly corroborated. Groetzinger sensed Barclays was fabricating an excuse to revert to Ticketmaster because it was desperate over the prospect of forfeiting Live Nation performances. The agreement concluded after a year and a half. During cross-interrogation, Live Nation’s legal counsel posited SeatGeek’s lack of proficiency, rather than Live Nation’s purported reprisal, led to the unraveling of the agreement.
The more arenas SeatGeek could not secure or subsequently forfeited, the more challenging it grew to acquire additional clients, Groetzinger noted. SeatGeek has contracted a total of five arenas for its principal ticketing services. “A venue becomes apprehensive about being overlooked when it perceives itself as isolated,” Groetzinger stated.
It transcends Ticketmaster
The litigation extends beyond mere ticket transactions. The government also contends that Live Nation wields monopolistic control over the sector of substantial open-air venues in the US — outdoor performance spaces favored by traveling musicians during the warmer seasons.
It is claimed that the corporation reportedly links entry to these establishments to the utilization of its proprietary event organizers, effectively making it exceedingly difficult for competitors to gain a foothold.
During the prior week, the panel of judges also commenced receiving testimony regarding this matter, notably from Seth Hurwitz, proprietor of It’s My Party (I.M.P.). His firm manages significant establishments throughout the greater Washington, DC region, such as the 9:30 Club and Merriweather Post Pavilion, an amphitheater not managed by Live Nation. He stated that, concerning open-air concert halls, it’s virtually “just myself and Live Nation.”
Oliver Chi, previously the city manager for Irvine, CA, provided further testimony, characterizing Live Nation’s forceful strategies as the municipality explored different managing entities for the new open-air venue under construction. It is purported that a company representative informed Chi that “Live Nation would merely bypass” the facility if the agreement was not granted.
Live Nation has endeavored to demonstrate that numerous methods for which it has faced scrutiny—such as entering into sole agreements with establishments and operating a vertically integrated enterprise—are likewise activities undertaken by its competitors. The company sought to discredit the purported intimidations, postulating, by way of illustration, that they merely presented potential hazards objectively.
Should no resolution be declared today, it is probable that the panel of judges will continue receiving testimony this week from AEG, an enterprise with a parallel setup for organizing and selling tickets for musical performances, alongside an admirer of live music and some corporate leaders. Ultimately, they are anticipated to receive testimony from its chief executive officer, and performers Kid Rock and Ben Lovett of Mumford & Sons. In the event of a government agreement, at least some states might proceed, and the tribunal will determine the destiny of one of the largest live entertainment empires in the United States.