New Live Nation lawsuits, investor action signal turbulent times ahead

Even as Live Nation basks in a record breaking concert season and the likelihood that a Trump led DoJ will take a less aggressive posture, new lawsuits and investor activity point to a turbulent year ahead for the concert giant.

In recent days, lawsuits have flared on both sides of the Atlantic at the same time that investor confidence in Live Nation and Ticketmaster’s continued growth seems to have shifted.

In The Courts

Even without the DoJ lawsuit, Live Nation will be spending a great deal of time and money fighting other court actions.

Taylor Swift fans evoke RICO

In one new lawsuit, 400 Taylor Swift fans used a law intended to fight organized crime – the Racketeer Influenced and Corrupt Organizations Act (aka RICO) – to accuse Ticketmaster and its parent company of conspiring with with stadiums and others to inflate concert ticket prices.

Expanding on an existing federal court case brought by Swift fans, the new suit accuses the company of engaging “in a pattern of racketeering activity” that forces ticket buyers to “part with more money than they are led to believe, and well exceeding the value of the products and services they receive.”

“This lawsuit is based on false assumptions about how ticketing works. Artist teams, not Ticketmaster, set ticket prices,” responded Live Nation. “Live Nation does not own stadiums in the U.S. and primary tickets are consistently priced below market value, as evidenced by resale prices averaging more than double.”

VIP tickets under fire

British PRO PRS is suing Live Nation claiming that it does not properly account for VIP ticketing, which may mean that its songwriters and publishers are may not be being paid properly for live performances.

“The vast majority of promoters and venues” comply with the requirements of the live music licensing tariff,” PRS said in a statement to UK outlet CMU, “ensuring that music creators receive rightful payment for their works”. But according to the PRO Live Nation has shown “disregard for these requirements (which, for) a company which is dominant in the live music market is unacceptable.”

Class Action suit can continue

Last week, Live Nation Entertainment and Ticketmaster failed to persuade a U.S. appeals court to block a proposed class action lawsuit accusing them of charging artificially high ticket prices.

San Francisco’s 9th U.S. Circuit Court of Appeals upheld a lower court ruling that Live Nation could not enforce contract provisions that required ticket buyers to arbitrate their claims rather than sue in federal court.

Investors Shift

Saudis sell 100% of shares

The Saudi Wealth Fund that backed Live Nation during the pandemic recently sold its entire 5% stake in the company at a $940 million profit in less than 5 years.

It’s unclear exactly when the Fall that the Saudis cashed our or why. The fund was Live Nation’s third largest investor.

Liberty Media spins off Live Nation

Live Nation’s largest shareholder Liberty Media last week announced plans to spin off its 69.5 million LYV shares into a new “Liberty Live” group along with its recently-acquired 90% stake in event experience business Quint.

Short Sellers Circle

Last month Live Nation reported that 14 million of its shares were sold short, or 8.63% of all regular shares available for trading.

Short sellers circle when the believe that as stock price is set to decline.

According to one analysis, Live Nation stock was in the top 4 stock among short sellers in October.

Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.