Ticketmaster: Monopoly’s Grip or Music’s Gateway?

On Monday, in a central Manhattan courthouse, legal representatives for the U.S. Justice Department and 40 state and district attorneys general alerted a jury that the live music sector was being constrained by a single dominant entity: Live Nation-Ticketmaster. After accumulating control over ticketing and performers’ utilization of major amphitheaters, lead DOJ counsel David Dahlquist contended, Live Nation devised a “flywheel” of influence that compelled venue patrons to remain within its operational sphere. It intimidated or took punitive action against them when they contemplated leaving. To even endeavor to secure business, Dahlquist stated, rival ticketing firms needed to provide “retaliation insurance” to establishments apprehensive about forfeiting Live Nation events by changing providers. “Currently, the concert ticket sales market is dysfunctional,” Dahlquist informed the jury in his opening remarks. “It is governed by Live Nation and its subsidiary, Ticketmaster.”

According to Live Nation’s account, the narrative is more optimistic. The corporation strives to disseminate happiness, and indeed, there are more music venues than ever before, noted lead Live Nation attorney David Marriott. Even the initial presentations were vibrant, illuminated with visuals of colorful concerts and tour advertisements for renowned artists such as Bad Bunny and Ariana Grande. “Asserting you’re superior is not a THREAT!” one distinguished slide conveyed to the jury, with the final term emblazoned in red to underscore the assertion.

The forthcoming six weeks will witness an anticipated legal dispute regarding whether Live Nation-Ticketmaster unlawfully dominated markets for ticket sales at significant concert locations and for artists’ use of large amphitheaters. A determination of culpability by the jury could potentially lead to the dismantling of the company, although Live Nation asserts that such a measure should be excluded based on certain allegations dismissed before the trial. A defeat for the prosecution would be a setback for its vigorous anti-trust efforts in recent years, at a time when a recent restructuring at the Antitrust Division itself has prompted inquiries about corporate influence.

On the initial day of proceedings, the government and Live Nation presented contrasting portrayals of an enterprise that is pervasive in the music entertainment sector. Behind the scenes, they were engaging in assertive legal tactics — before the jury entered the courtroom, Judge Arun Subramanian admonished the attorneys that he perceived “gamesmanship” in attempts to get each others’ evidence or arguments disqualified from the proceedings.

To succeed, the DOJ and states must demonstrate that Live Nation-Ticketmaster — which they calculate possesses an 86 percent market share in primary ticketing for major concert locations, and a 78 percent market share for performers’ use of large amphitheaters — wields monopoly power in the pertinent sectors, and that it unlawfully leveraged that dominance to the detriment of competition, through conduct that hindered patrons from switching to rivals. One notable instance it intends to employ to illustrate this involves discussions with the Barclays Center, which departed, then subsequently returned, to Ticketmaster as a supplier. “When they attempted to change providers, they faced repercussions,” Dahlquist remarked.

Ticketmaster’s catastrophic Taylor Swift debacle is anticipated to arise during the trial proceedings, which the DOJ points to as proof of a monopolist’s insufficient allocation of resources into its infrastructure. Marriott attributed it to a cyberattack that only Ticketmaster’s system could have managed as effectively as it ultimately did. While the state prosecutors are pursuing compensation for what they contend Ticketmaster excessively billed customers in what would have been an equitable market, Marriott declared, “no reparations are warranted here, because we’ve committed no wrongdoing.”

Marriott endeavored to portray the enterprise as more relatable, presenting his legal team and some senior managers in the courtroom, who rose and acknowledged the jury. Though Live Nation and Ticketmaster are corporate entities, he said, they are “composed of individuals who desire earnestly to act ethically.” Marriott recalled his personal attendances at live events spanning from the circus as a child, to an “uncomfortable” initial outing at a Lionel Richie performance. “Live Nation and Ticketmaster are dedicated to delivering happiness to people’s lives and operating within legal bounds,” he stated.

Ticketmaster only acquires a modest portion of the revenue from a ticket sale, Marriott noted, with merely a 5 percent commission rate. And the establishment managers that are “allegedly exploited” by the business are actually “affluent individuals,” Marriott affirmed, indicating a presentation slide of prominent locations and their proprietors, such as Intuit Dome, owned by former Microsoft CEO Steve Ballmer.

Marriott contended that Live Nation-Ticketmaster’s actual share of the market is only 40 percent in ticketing and 18 percent in venues, when accounting for elements that the prosecution omitted, such as stadiums and most arenas, which are primarily utilized for athletic competitions but also musical performances. Furthermore, it was not punitive action that reintegrated the Barclays Center into the system with Ticketmaster, but the fact that “SeatGeek failed in its duties,” he said. Marriott conceded that the jury may be apprised of a communication with Barclays Center senior management where Live Nation CEO Michael Rapino “becomes agitated” and “uses strong language,” but these were simply indicators of vexation about missing an agreement, not genuine menaces. After all, he reasoned, informing a client there are ramifications for choosing a substandard offering is simply stating the reality.

This conversation and additional particulars could emerge on Wednesday, when the DOJ intends to summon former Barclays Center chief executive John Abbamondi to provide testimony. Shortly thereafter, the jury is anticipated to receive testimony from a senior official for the Minnesota Wild.