Live Nation Settlement Spurs Chaos in Court

The Trump administration settled its antitrust case against concert monopoly Live Nation during its antitrust trial in New York City last week, for the equivalent of three days’ revenue and an agreement to somehow “open source” its ticketing platform. But no one told the judge, the 12-member jury, or the Department of Justice line attorneys prosecuting the case about the deal until this morning, causing a meltdown that played out like a courtroom version of the internet Armageddon that touched off the case in the first place, the infamous 2022 presale event for Taylor Swift’s $2 billion Eras Tour.

Live Nation stock surged 5 percent on the news, in defiance of the broader bear market.

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Judge Arun Subramanian demanded to know why Live Nation hadn’t told him about the deal during a private meeting Friday evening, wondered what he was supposed to tell the jury, and bemoaned the government’s “absolute disrespect for the court, the jury, and the entire process.” Attorneys for at least 27 of the 40 states (plus the District of Columbia) that had joined the case offered to continue prosecuting it in lieu of the DOJ lawyers. Judge Subramanian told the jury to go home and report back to the courtroom in a week, which may not be enough time for the remaining states to assemble a full team of litigators and pursue a case where Live Nation’s main argument would be that the experts at DOJ already settled it.

But wait, how exactly did the DOJ propose to transfer the agency’s work product, expert witnesses, and years of accumulated expertise on the topic to a completely different group of attorneys, the judge asked the government’s lead trial attorney David Dahlquist, according to a surreal livestream posted on X by the one-man Manhattan legal news outlet Inner City Press:

“I only saw the term sheet when you did, your honor,” Dahlquist replied.

“You are the lead trial counsel and you were only told when I asked this morning?”

“Correct.”

It’s difficult to make the case that the government’s remedy does anything whatsoever to assuage the obvious anti-competitive bait and switch.

This explained the lingering mystery of why, if it had already decided to settle the case, the DOJ had bothered filing a 20-page brief this morning opposing Live Nation’s motion to exclude a raft of incriminating Slack messages in which a top executive “calls fans ‘REDACTED’, explains that he ‘REDACTED’ them, and brags that Live Nation is ‘REDACTED PHRASE.’” (“Redacted” is a defining feature of this trial, though the Inner City Press has petitioned the judge to unseal some more relevant exhibits.)

Thickening the plot, though, was an affidavit filed by New York Office of the Attorney General Antitrust Bureau chief Elinor Hoffman, revealing that the DOJ had circulated the term sheet to her and state attorneys general last Thursday, and requested an answer about whether or not they intended to join the settlement by close of business Friday. Perhaps the holdout states simply didn’t want to kill Dahlquist’s vibe?

Whatever the drama, the fact is that the outcome was preordained the day Live Nation signed million-dollar MAGA influencer Mike Davis to lobby for them. He clearly stage-managed the deal and bulldozed anyone in his way, including the now-departed former head of the federal Antitrust Division, Gail Slater. Under Trump 2.0, competition policy has devolved into a pay-to-play scheme, and the real decisions are being made over cocktails in Pam Bondi’s office, not in such low-class environments as a courtroom with evidence. But those details matter, at least to those of us who have to deal with these unaccountable giants.

THE TRIAL’S FIRST WEEK LOOKED LIKE a spectacular success story for the beleaguered Justice Department, which has lost 2,000 attorneys and paralegals over the past year. To be fair, it is not hard to prove that Live Nation is a monopoly, as jurors learned when the government’s very first witness, John Abbamondi, told the story of what happened when, as the CEO of the Brooklyn Nets in 2021, he switched the ticketing vendor of the team’s Park Slope stadium to SeatGeek from Live Nation’s Ticketmaster.

First a friend who worked at Live Nation sent him a text message cautioning him to consider the potential repercussions, wink emoji; then Live Nation CEO Michael Rapino called to say he had no choice but to pull concerts from the venue; then a Billie Eilish concert that had been postponed during the pandemic was rescheduled at a stadium on Long Island instead of Brooklyn; then he lost his job.

Another stadium CEO testified next about how he’d never been able to summon the courage to drop Ticketmaster for a competitor, because Live Nation’s executives had not been subtle about threatening to destroy his business if he did. That guy, Mitch Helgerson of the Minnesota Wild, knew he couldn’t afford to gamble. The billion-dollar Barclays Center, serviced by a dozen subway lines and the Long Island Rail Road, might be the most accessible stadium on Earth not named Madison Square Garden; the Minnesota Wild Grand Casino Arena had to compete with the more convenient Target Center to serve a far more limited population of fans. Losing Live Nation’s concert lineup, he said, would be “almost catastrophic.” So he stayed.

Then on Friday, after Live Nation had secretly settled its case, the jury heard from the guy masochistic enough to try to go up against this Goliath, SeatGeek CEO and co-founder John Groetzinger. To close his first big Ticketmaster conversion with the Dallas Cowboys, Groetzinger had to write into SeatGeek’s contract with the team a whole “retaliation insurance” section promising the team payouts in the event that Live Nation pulled a major concert from the stadium. SeatGeek couldn’t afford to write such a policy for Barclays Center, so instead he gave the arena a major equity stake in SeatGeek’s business, which enabled him to close that deal and sign up a few more teams. But once Live Nation’s campaign of retaliation began and spooked other venues, he was cooked.

Live Nation’s cross-examination of Groetzinger, which consisted largely of attempting to paint the ticketing entrepreneur as a jealous hater, was so half-hearted and pathetic it probably should have alerted observers that the fix was in. At one point, Live Nation attorney David Marriott presented Groetzinger with a message he’d sent an investor the day the Biden administration first filed its antitrust complaint against the live events monopoly, containing a link to a story about how Live Nation’s stock was down 7 percent and—smoking-gun alert—“a smiley emoji.”

“You see this lawsuit as a potential benefit to your business?” he challenged, according to an account in Courthouse News.

“Absolutely,” Groetzinger replied.

ALAS, BETTER LUCK NEXT TIME? It’s difficult to make the case that the government’s remedy, in which Live Nation promises to pay $280 million, divest more than 10 and as many as 13 of the 400 venues it owns or controls, and make its ticketing platform interoperable with those of competitors like SeatGeek and Eventbrite, does anything whatsoever to assuage the obvious anti-competitive bait and switch—what the DOJ’s original complaint calls the “flywheel effect”—that nearly a dozen stadium executives and concert promoters described during the first week.

Other settlement terms are similarly toothless. Ticketing exclusivity contracts with venues will be limited to four years, but as long as Live Nation remains a giant in artist promotion and management, it is hard to see those deals not being perpetually renewed. Ticketing fees at amphitheaters, where Live Nation has roughly 78 percent market share, would be capped at 15 percent. But the company could presumably adjust by capitalizing fees into the base ticket price.

“They basically got away with paying a cheap parking ticket,” said Tommy Dorfman, a door-to-door broadband salesman in Massachusetts who was once muscled out of concert promotion by Live Nation and has a long-running lawsuit against the company. “Ticket prices will continue to increase and independent promoters will become extinct. This will be an extinction-level event for independent promoters. It shows how powerful Live Nation is that the Mafia couldn’t get a love tap on the wrist like this.” Dorfman vowed to continue his case “so the world and the fans can see the evidence, not like the DOJ did here.”

How Live Nation’s Monopoly Works

It’s also worth noting that Live Nation agreed to an eerily similar remedy as a condition of its 2010 merger with Ticketmaster: First it was forced to open its ticketing platform to AEG, and secondly it was ordered to sell its own proprietary ticketing service Paciolan to Comcast-Spectacor’s Spectra, a division of the cable giant that operated and managed hundreds of arenas and convention centers across the country. Spectra allowed Paciolan to languish, finally selling it off in 2017—then sold itself in 2021 to Oak View Group, an outfit co-founded by Irving Azoff, the veteran music mogul who was the architect of the Ticketmaster–Live Nation merger and ran the combined company until 2012.

In its antitrust complaint against Live Nation, the DOJ described in extensive detail how Oak View operated as a self-described “pimp” and “hammer” for Ticketmaster, collecting $20 million in kickbacks for inducing its arena clients to outsource their ticketing to Ticketmaster. It is unclear why the DOJ didn’t just name Oak View as a co-defendant in the case, though its bid-rigging indictment of Azoff’s partner Tim Leiweke last summer appeared to be an attempt to induce the executive to cooperate in the case against Live Nation; that attempt famously failed a few months later when Trump pardoned Leiweke on the advice of his golf buddy Trey Gowdy.

It’s not clear whether the DOJ planned to pursue the Oak View collusion allegations at trial following that setback and the strange ruling Judge Subramanian made two weeks before the trial began, dismissing the agency’s flywheel argument altogether and ordering the government to make a plain-vanilla monopolization case focused on the company’s specific dominance over amphitheaters. The chef’s kiss will come when Live Nation reveals the identity of the acquirers of its divested amphitheaters: perhaps a joint venture of Azoff, Leiweke, Jerry Jones, and Makan Delrahim?

All jokes aside, of course, Subramanian still needs to approve the settlement, and as of today he appeared to be scrambling for a way to fix the case the Trump administration just imploded alongside the 27 state attorneys general who have refused to join the settlement.

“If the principal attorney was a bystander to the actual negotiations, that tells us a lot about the current state of antitrust,” said John Kwoka, an economics professor at Northeastern University and former DOJ staffer who long ago advised seven holdout states that refused to join the DOJ’s 2000 antitrust settlement with Microsoft. “States don’t have the budget or the resources for this kind of litigation and judges didn’t take us too seriously,” he cautioned, adding that while the former hasn’t changed, the opprobrium of Judge Subramanian suggested that desperate times might call for unusual measures. “This is a story about the DOJ during the Trump administration, a story of deep corruption where no staff attorney, no staff economist, no witness, and no juror can tell what is going to happen because it’s all decided in some smoke-filled back room.”