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Live Nation suit: No 'silver bullet' in DOJ's approach

Alleging a monopoly over live events, US Justice Department officials have filed an antitrust lawsuit against event promoter and ticket vendor Live Nation (LYV). Northeastern University School of Law professor David Herlihy joins Market Domination Overtime to discuss the Justice Department's approach.

Herlihy claims that breaking up the company won't quite fix the problem, but outlines what this possible scenario might look like.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This article was written by Gabriel Roy

Trascrizione video

The Justice Department is suing Live Nation, the parent company of Ticketmaster alleging the company has a monopoly over live events, harming fans, artists and venues in the process.

ANNUNCIO PUBBLICITARIO

Joining us now, Northeastern University Professor David H he David, thanks for being here.

Um So the remedy that the justice department appears to be looking for is breaking up the company, right?

Uh A merger that they approved back in 2010 of Live Nation and Ticketmaster, they essentially want to undo it does that fix the issue that they seem to be trying to fix.

Not really, this is a very complicated space.

Uh The live music ecosystem has several different players.

You have artists, you have managers, you have venues, you have promoters, you have ticketing uh concert promoters.

And I think um it's very difficult to really regulate this in a way that's not going to still get abused by, by companies that have a dominant market share.

And so I don't think there's really any silver bullet here.

It's interesting, it'll be interesting to see whether uh Ticketmaster is indeed broken away from Live Nation.

Um But it's um I don't think it's gonna fix it Now, uh uh David, let, let's say that the government actually won this thing and there was a breakup.

What did a breakup actually look like?

Well, I guess you'd have essentially uh uh there would be no opportunity for Ticketmaster to really directly connect with live nation.

There would be a stand ticketing company that could provide their services to any promoter.

I think so.

Uh It would be essentially a although the, the 2010 consent decree required Ticketmaster to provide its code and its uh its system to a competing ticket services.

Um Essentially, I think having one ticketing company that provides agnostic services to any promoter at any venue.

I think that what the government is looking for as opposed to sort of these uh integrated deals that uh enable Ticketmaster to work with live Nation and to do certain kinds of deals that sort of cross pollinate and create multiple opportunities for Ticketmaster and lab Nation to double dip.

Um I've got part of Live Nation's response in my inbox here.

And one of the things they point out is that they say there's more competition in the live events market and they say that Ticketmaster's market share has actually declined since 2010, although I think it's still something like 80%.

Um So I guess the question is what would be the remedy?

I mean, one of the things um in this email that that Live Nation is proposing is letting artists cap resale prices, we know resale, the resale market is one of the things that really gets people's attention.

Well, I think how do you really do that in an effective way?

I mean, you have people that are buying tickets and then they're reselling the tickets and, uh, there's a, there's this effort to try to figure out how much should we charge.

What's the right price to charge?

And Ticketmaster is also engaging in dynamic pricing to make sure that I think when you're buying an airline ticket, depending upon when you buy it, how many seats are left, the price fluctuates.

And so it's a real conundrum, I think, to try to figure out what is the exact best price.

But the secondary market, I mean, how do you control somebody from um selling a ticket that they bought uh legitimately and on a secondary market.

And the truth is a lot of artists are uh themselves on the secondary market as is Ticketmaster.

And so um it's, it's a very difficult uh ecosystem to control.

It's actually several, many, multiple different ecosystems that each operate in a free market.

And they're trying to create to, to, to regulate this in such a way that they don't want to damage consumers.

It's a very difficult, there's no silver bullet here that's going to just make this work.

David, let me ask you, we are in an election year.

Uh Let's say there's a change in the White House could that affect this in any way or?

No, neither, neither Biden nor Trump would be, will be riding to the rescue for live Nation.

Well, um I don't know that everyone's going to want to ride to the rescue Aladdin Nation in a way.

Uh It's funny because uh Ticketmaster is sort of the fall guy for artists and Aladin Nation Two.

What's not really realized is that the artists are the ones that set the prices.

People have this illusion that Ticketmaster comes in and says, we're going to charge this much money for Bruce Springsteen or this much money for Taylor Swift or this much money for Beyonce.

The artists are the ones who actually set the high water mark that begins the whole uh offering to the public and then you have a secondary market which made the show that the prices were, were lower than they could have been.

And so, um so I don't know that they, that really anybody wants to come in necessarily and save Ticketmaster, especially when you have Taylor Swift fans and their parents who are outraged at the way that the whole ticketing availability came into play.

It's very, I don't think there's really anybody that wants to own this in terms of like, uh being the, being the, the champion of the, of the fiasco.

David.

Thank you.

It's a big complicated story.

Thanks for walking us through it.

Sure, happy to help