After she was appointed as the Justice Department’s top competition cop, Gail Slater articulated an “America First” agenda that would involve empowering the middle class to “shape the economy toward their own flourishing” by way of aggressive antitrust enforcement. Gone are the days of rubber stamping mergers and lax enforcement, she made clear in a speech given at the University of Notre Dame’s law school in April of last year.
The veteran tech and media lawyer ended up lasting roughly a year at her post, stepping down on Thursday amid mounting tension over her authority to pursue cases against large companies cozying up to the administration and going above her head to strike deals with higher-ups at the Justice Department. Among the questions at the forefront of her departure: Is the agency about to settle its bid to break up Live Nation and Ticketmaster?
Signs point to an agreement to end the lawsuit without a trial. In August, Roger Alford, Slater’s former-second-in-command, described a “new normal” in which cases are “being resolved based on political connections, not the legal merits.”
“Which case is the next casualty,” he said. “Will the same senior DOJ officials ignore the President’s Executive Order just because Live Nation and Ticketmaster have paid a bevy of cozy MAGA friends to roam the halls of the Fifth Floor in defense of their monopoly abuses?”
According to a Semafor report, those MAGA friends were Mike Davis, a Trump ally who juiced settlement talks between the Justice Department and Hewlett Packard to greenlight its acquisition of Juniper Networks, and former Trump campaign manager Kellyanne Conway. The report had the National Independent Venue Association, one of Live Nation’s most vocal critics, publicly calling on the DOJ to continue its push.
“There is no pathway to restore competition in ticketing and live performance across America without Live Nation’s breakup,” NIVA said.
Despite those warnings, don’t be shocked if the Justice Department announces a settlement with minor concessions before the trial set to start next month. But what exactly will the deal, if one is reached, entail? A complete break up of Live Nation and Ticketmaster would likely be off the table, but a smaller divestiture could appease the Michael Rapino-led company while maintaining some sense of enforcement.
Save for a breakup, competing ticketing services have also argued ending Ticketmaster’s exclusivity agreements with concert venues would increase competition in ticketing while ending the sort of quid pro quo venues have worried about, where choosing another ticketing provider means they wouldn’t get access to Live Nation’s concerts. (A consent decree from Live Nation’s initial merger with Ticketmaster over a decade ago specified that Live Nation couldn’t threaten venues about withholding shows if they use other ticketers, though the company settled with the DOJ in 2019 after Live Nation was found violating that decree.)
A caveat: While an end to exclusivity agreements would be a boon for the likes of AEG or SeatGeek, smaller independent concert venues have argued an end to such deals would only hurt them, as they often rely on the Ticketmaster exclusivity payments for revenue. Meanwhile, others worry having multiple ticket providers for shows would lead to disorganization when scanning concertgoers at the doors.
Some Live Nation critics have floated the company’s artist management arm as a possible option. Aside from its status as the world’s largest concert promoter and primary ticket seller, the company also directly manages hundreds of acts. If not a divestment in promotion or ticketing, would the Justice Department be open to carving out a smaller concession involving the separation of management services, or at the least, sanctioning how their managed artists work with the promotion arm?
Also under the court spotlight was Live Nation’s alleged “competitive détente” with Oak View Group, the venue development and management company. The government claimed the duo colluded by establishing a partnership to divvy up certain parts of their businesses by agreeing not to compete against each other for artists and tours. In 2016, Rapino warned Oak View Group, which offered to promote an artist Live Nation formerly worked with, that such competition would lead to artists demanding more compensation, according to the complaint. He wrote, “Whats up? We have done his [touring] and vegas[.] Let’s make sure we don’t let [the artist agency] now start playing us off,” the suit said.
In exchange for allegedly ceding concert promotions to Live Nation, Oak View Group gained ground in its arena consulting business. The Justice Department claimed the partnership extended to Oak View Group recognizing that it has a “significant financial interest in maintaining existing Ticketmaster contracts” under a 2022 long-term agreement between the two companies. The deal allows the pair to tie up all of its facilities to exclusive 10-year deals, among other things.
Live Nation would likely be hard-pressed to terminate its ticketing agreement with Oak View Group, though that could be viewed as a major concession by the company to some within the Justice Department.
Another possibility: Pricing transparency and restrictions around the use of data to facilitate pricing algorithms, or in Live Nation’s case, dynamic pricing. A thrust of the Justice Department’s complaint was the company’s mass collection of user data to prop up its “self-reinforcing flywheel” of interconnected businesses, driving substantial advertising revenue and entrenching its monopoly across live events.
A target could be encrypted mobile ticket program SafeTix, which requires all ticket transfers to occur with the Ticketmaster platform and is alleged to have grown the size of the company’s database by as much as 40 percent. “One of the advantages we’ve launched under the transfer strategy is we now not only know the person that bought the ticket, but we’re going to know those three people that you are taking to the show, which we have not known historically,” Rapino said in 2013.
Such a move would align with the Justice Department’s focus on algorithmic pricing, most recently in its settlement last year with RealPage.
And of course there’s the assessment of monetary fines, though that would do little to address the structural and behavioral issues at the core of the competition concerns with Live Nation.
A trial over the department’s bid to force Live Nation to sell off Ticketmaster is scheduled to start next month. If a settlement is struck before then, it’d likely be up to the 40 states across the U.S. that joined in the suit as well. Time will tell how many of those states — which include California and New York — would decide to pursue the case without the DOJ, though many are still expected to remain in litigation.
“We look forward to going to trial on March 2 against Live Nation,” said Paula Blizzard, California’s top antitrust enforcer under Attorney General Rob Bonta.