In its lawsuit accusing Reside Nation Leisure, the live performance behemoth that owns Ticketmaster, of being an unlawful monopoly, the Justice Division drew on a raft of inside communications that supplied a uncommon behind-the-scenes take a look at the trade.
The Justice Division argued in an intensive criticism filed on Thursday that the merger of Reside Nation and Ticketmaster, which went via in 2010, had damage competitors, hindered innovation and resulted in larger ticket costs and costs for customers. It referred to as for the corporate to be damaged up.
In response, Reside Nation, which can be the world’s largest live performance promoter, has stated that it’s not a monopoly, and denied that it has the unilateral energy to lift costs. Opposite to the federal government’s argument about its nice energy, Reside Nation says it now faces extra competitors than ever, and that the Justice Division’s go well with “received’t scale back ticket costs or service charges.”
Detailing its allegations, the federal government relied on eye-opening emails that it says have been written by Reside Nation’s chief government, Michael Rapino, and different high-powered figures within the live performance world.
Listed below are a couple of of these accusations.
A possible rival’s Kanye West live performance
One episode from 2021 goes to the center of the Justice Division’s allegations that Reside Nation went to excessive lengths to guard its aggressive edge.
Late that yr, the federal government says, Reside Nation “threatened business retaliation” in opposition to the non-public fairness agency Silver Lake, which had an funding in TEG, an Australian ticketing and promotions firm that was concerned in a extremely anticipated profit present by Kanye West and Drake on the L.A. Coliseum. Silver Lake had additionally invested in Oak View Group, a venue administration firm with shut ties to Reside Nation.
In response to the federal government, Rapino complained to an Oak View Group government that he considered TEG as a competitor, and Oak View Group relayed to the investor that Reside Nation was “not joyful.” Rapino then advised Silver Lake he was “all in” with Oak View Group, “the place the massive play lies with venues — why insult me with this funding in ticketing/promotions and many others.”
TEG had organized a deal to promote some tickets via StubHub. In response to the criticism, Reside Nation sought to “frustrate” TEG by blocking these tickets, and consequently “tons of of StubHub’s prospects have been refused entry to the occasion.”
Reside Nation then “threatened to tug its assist from Oak View Group,” and Irving Azoff, the highly effective artist supervisor who was a co-founder of Oak View Group, refused to permit TEG to advertise reveals with any of the artists he managed. Azoff advised Rapino he would demand that Silver Lake promote TEG, and Rapino replied, “Love ya.” In response to the criticism, Silver Lake sought to promote TEG — and supplied it to Reside Nation.
In an in depth response to the Justice Division’s lawsuit, Dan Wall, Reside Nation’s government vice chairman of company and regulatory affairs, stated the declare that Reside Nation had threatened Silver Lake “reveals not solely a disregard for the info, but in addition deep hypocrisy.”
Rapino’s criticism, Wall stated, was “basically the identical” as a priority by each the Justice Division and the Federal Commerce Fee over “non-public fairness firms making a number of investments in the identical trade due to aggressive ‘entanglements.’”
In a separate assertion concerning the live performance on the L.A. Coliseum, Reside Nation stated: “The one factor that we did was frustrate TEG’s efforts to place tickets straight on the secondary market in violation of our unique rights over main tickets.” Silver Lake didn’t reply to a request for remark.
A competitor turned ‘hammer’
Reside Nation, the federal government says, initially considered Oak View Group as one in every of its “Largest Competitor Threats.” However quickly the businesses “colluded,” the federal government says, to “keep away from competing with one another, and chart a mutually helpful marketing strategy to cement Reside Nation’s dominance.”
Oak View Group, the federal government says, operated as an “agent” for Reside Nation, even calling itself a “pimp” and a “hammer” for the bigger firm, generally delivering threats on behalf of Reside Nation to venues that have been contemplating dropping Ticketmaster for an additional ticket supplier.
The federal government’s criticism quotes from what it says are emails from 2016 through which Rapino complains to Oak View Group executives about their intention to advertise reveals with an artist that Reside Nation works with. Oak View Group backs down, with the corporate’s chief government — who isn’t recognized within the criticism, however is Timothy Leiweke — saying: “Our guys received a bit forward. All know we don’t promote and we solely do excursions with Reside Nation.”
Wall, the Reside Nation government, stated in response that Oak View Group “has by no means been a live performance promoter, nor aspired to be one,” and that it was merely seeking to fill the occasional darkish night time at one in every of its venues. “To painting that as an settlement to not compete in live performance promotion is farcical,” Wall wrote. A consultant of Oak View Group declined to remark.
A ticketing rival at Barclays Heart
In early 2023, The New York Occasions broke the information that Barclays Heart, the sector in Brooklyn, was dropping SeatGeek, the younger and aggressive ticketing enterprise it had simply entered a seven-year contract with, and signing a brand new take care of Ticketmaster.
The abrupt change raised eyebrows within the trade, and led to questions on whether or not Reside Nation had denied the venue entry to Reside Nation’s largest excursions as retaliation for switching from Ticketmaster to SeatGeek. Reside Nation denied that on the time, and a evaluate of live performance information by The Occasions was inconclusive. The variety of Reside Nation-promoted reveals at Barclays had certainly fallen since SeatGeek took over, however so had these by unbiased promoters.
The Justice Division’s case omits Barclays’ title from the go well with, however Wall confirmed it in a convention name with buyers late Thursday. The federal government quotes from an e-mail that it says was despatched to the venue’s chief government from “a senior Reside Nation government” who had heard the venue was switching to SeatGeek: “In any case,” the e-mail says, “ought to take into consideration larger relationship with LN not simply who’s writing an even bigger sponsorship test,” including a “wink” emoji.
In response to the federal government, Reside Nation “adopted via on its threats, re-routing concert events to different venues.”
In response, Reside Nation stated, “We categorically deny that any concert events have been rerouted to retaliate in opposition to their choice to go to SeatGeek.”
Shopping for rival firms
The federal government argues that Reside Nation has acquired a variety of firms with an goal to remove rivals in each live performance promotion and ticketing.
Among the many examples the federal government cites are United Live shows in Utah, which used a regional ticketing firm referred to as SmithsTix. In response to the what the federal government says have been inside communications at Reside Nation, the corporate needed a higher ticketing foothold in Utah however selected to not purchase SmithsTix as a result of doing so would “require us to go to the DOJ.” As a substitute, Reside Nation purchased United Live shows in 2017 and transformed its venues to Ticketmaster; SmithsTix, it stated, finally went out of enterprise.
One other is AC Leisure in Tennessee, which had performed a component within the Bonnaroo pageant there. Reside Nation took a controlling stake within the firm in 2016. A Reside Nation government considered the economics of the deal as “not tremendous thrilling,” however referred to as it “a defensive transfer” in opposition to AEG, in line with the criticism. In 2018, Reside Nation purchased Frank Productions, a promoter in Wisconsin that used ticketers aside from Ticketmaster; Reside Nation acquired the corporate and “flipped the venues to unique Ticketmaster contracts.”
In response, Wall stated the deal for AC Leisure was made with a promoter who was in his 60s and needed to retire. “Reside Nation didn’t have a Knoxville workplace, so for $15 million it made the deal,” Wall wrote. “Critically? The DOJ is difficult that?”
