Nation and Ticketmaster abused monopoly power and gouged consumers, jury finds

[0:00] A federal jury has found Live Nation and its subsidiary, Ticketmaster, [0:04] have been operating as a monopoly in violation of federal and state laws. [0:08] It's the long-awaited conclusion to a blockbuster antitrust trial [0:13] that could have big implications for both the company and the entertainment industry at large. [0:18] Dozens of states were party to the suit, which argue that Live Nation used its combined control [0:23] of ticketing platforms and a nationwide network of concert venues to force artists into bad deals [0:29] and drive up prices for consumers. For more on this, we're joined by Jem Oswadi, [0:34] music editor at Variety. Jem, thanks so much for being with us. Before we get into details, [0:39] just for context here, how big a moment is this for Live Nation, Ticketmaster and the industry? [0:45] JEM Oswadi, Ticketmaster, It is a big moment, but nobody knows yet what exactly it is going to mean. [0:50] It is very much a rebuke to the Department of Justice's decision early last month to settle [0:58] with Live Nation and, you know, have them modify some of their policies and pay a few fines. [1:03] I think it was $260 million, which Live Nation earns in a couple of days. [1:10] We should point out that suit was first filed by the Biden administration. That's when the DOJ [1:15] was involved. When the Trump administration came into office, the DOJ, a few days in, [1:20] walked away. States decided to continue with that lawsuit, which is how we ended up where we are today. [1:25] But in retrospect, that settlement that they reached, how does that look right now? [1:31] Well, it was never approved by the judge. This is all being decided by one judge, [1:35] Aaron Sabramian, I think is how you say his name. And he was furious over the settlement because it [1:42] was basically done in a smoke-filled room. There was a deal between DOJ officials and Live Nation CEO [1:51] Michael Rapinoe and presumably some other people. And the judge didn't even know. [1:56] So he was furious over that. And the states decided to continue pushing ahead. Now, [2:02] does this mean that Live Nation and Ticketmaster are going to be broken up and [2:07] tickets are going to get a lot cheaper? Absolutely not. [2:10] LISA DESJARDINS- We will get into more on that and what we could expect ahead in just a moment. [2:14] But I want to remind folks about what the argument was here behind the monopoly prosecution. [2:19] So DOJ was basically arguing that they were stifling innovation, [2:23] they were causing higher prices for consumers. Remind people how they were doing that. [2:28] What were the actual practices they were alleged to have engaged in? [2:31] I mean, there are so many, it's a little hard to begin. The practices that they were [2:36] really being criticized for really only trickled down to consumers, quite honestly. [2:42] But it was things like, I got to be careful with the verbs here, like persuading venues to use Ticketmaster, [2:51] their ticketing service. And Rapinoe is heard in a recorded phone call, kind of threatening [2:59] a venue by saying, well, if you don't go with Ticketmaster and you go with our competitor, [3:04] boy, I don't know, we're going to have a hard time routing some of our big artists to your venue. [3:08] And that venue is Barclays Center in Brooklyn, one of the biggest arenas in the tri-state area. [3:13] And Rapinoe, we should note, as the head of Live Nation and those stories, [3:16] I know were reported on for so long. As you mentioned, though, we do not yet know [3:21] what the remedies could be. We should point out in the verdict that the jury found Ticketmaster [3:25] overcharged consumers by about $1.72 a ticket. Is there a chance here that concert goers could [3:32] see some of their money coming back? It is really hard to say. It's very early [3:40] in this process, quite honestly. And we need to be fair to Live Nation here. They did not create [3:46] this system. The problem stems from when ticketing went online. Because before, when it was just hard [3:54] tickets, you know, you couldn't have a bot buying up thousands of tickets and flipping them for, [4:00] you know, exponentially more than their face value. And Live Nation has tried to fight that [4:06] syndrome. Sometimes they're successful. Sometimes they're not. They're up against the [4:10] most sophisticated bots in the world. So in sympathy to them, they are trying to keep things [4:17] in the stakeholders, the people who actually put money and, you know, have skin in the game with [4:22] putting on shows, venues, artists, managers, promoters, people like that, instead of bots and scalpers. [4:28] But they do play rough, you know. And, I mean, this is a capitalist society. We're allowed to [4:35] push the limits to a degree. But the question here is whether they pushed them too far. [4:39] And the jury today found that they did. [4:41] AMNA NAWAZER, I mean, Live Nation has inarguably been an absolute force in this industry, right? [4:46] According to some of the trial testimony, they sold about 10 times the number of tickets as the next [4:51] closest competitor. What else have we heard from them over the course of this trial? What's been [4:56] their response to the accusations about their practices? [5:00] Oh, throughout, they've been saying, we're not a monopoly. We play rough. [5:04] They don't say we play rough. They say we're competitive and we're aggressive. All of which [5:09] is certainly true and somewhat defensible. But when you start getting into some of the details, [5:15] like, you know, with them trying to explain away, you know, those famous Slack messages where people [5:22] were saying, oh my gosh, can you believe these suckers? Meaning concert goers paying for tickets. [5:29] You know, it wasn't that exactly words, exactly those words, but it was the sentiment. [5:34] The particulars, they were less strong on. But generally, they're just saying, we are not a [5:38] monopoly. They dispute a lot of the numbers. You know, the percentages of how much of the ticketing [5:43] market they have. The prosecution said it was about 86%. They said, oh, no, no, it's more like 44%. [5:52] And with anything like that, it's how you slice and dice the numbers. But they've basically been [5:58] saying, we are playing by the rules. And it is up to the jury to decide whether or not they believe that. [6:05] We will see what happens next. That is Jem Oswad, music editor for Variety. Jem, thank you so much. [6:10] Jem Oswad, Thank you.