DoJ calls for breakup of the Live Nation and Ticketmaster ‘flywheel’

The U.S. Department of Justice and 30 states called for Live Nation and Ticketmaster’s breakup Thursday for allegedly using their dominance in live music to create an “unlawful monopoly” that hurts fans, artists, and independent competitors.

Live Nation’s “Flywheel”

The Justice Department’s lawsuit accuses LiveNation of locking out competitors to protect its “flywheel” which it describes as “a self-reinforcing business model that captures fees and revenue from concert fans and sponsorship, uses that revenue to lock up artists to exclusive promotion deals, and then uses its powerful cache of live content to sign venues into long-term exclusive ticketing deals, thereby starting the cycle all over again.”

“The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services,” Attorney General Merrick Garland said at a press conference announcing the lawsuit. “It is time to break up Live Nation.”

“For too long, Live Nation and Ticketmaster have unfairly and illegally run the world of live events, abusing their dominance to overcharge fans, bully venues, and limit artists,” added New York Attorney General Letitia James, in a statement. “When companies like Live Nation control every aspect of an event, it leads to bad blood — concertgoers and sports fans suffer and are forced to pay more. Everybody agrees, Live Nation and Ticketmaster are the problem and it’s time for a new era. Today, we are taking this important action to protect consumers and force big companies to stop abusing their influence and get in formation.”

AC, Oakview, and TAG named

Garland specifically named as an example of alleged unlawful actions Live Nation’s overpayment for the acquisition of independent promoter AC Entertainment to “create a mote around the Memphis market,” collusion with venue operator Oakviww Group, and threats to investment firm Silverlake for backing the expansion of independent promoter TAG.