Despite Multiple Consent Decree Violations, Live Nation Gets Slap on Wrist from DOJ

IndustryLegalTop Story

January 14, 2020
Dave Clark 1

The Department of Justice detailed six instances where Live Nation violated a 2010 consent decree by using threats to ensure venue clients used Ticketmaster in court filings made public last week. Such threats, which Live Nation has long denied, were the reason for the DOJ’s plans to bring court proceedings against the entertainment giant, which were halted by the company’s quick settlement clarifying and extending the consent decree by five years to 2025.

As part of the settlement, Live Nation Entertainment will pay for the costs of the DOJ’s enforcement (set at $3 million), and agreed to the setting of harsher penalties for future violations to the consent decree. It did not, however, include any provisions against the increasing use of technology to restrict the transfer or resale of tickets outside of Ticketmaster-controlled systems, which had been rumored to be among the anti-trust investigation targets before the settlement.

The full documents and updates proposed updates to the consent decree are available at Justice.gov: Amended Judgement | Motion to Modify.

In the filing, the DOJ outlined its findings that Live Nation “executives have retaliated against or threatened venues throughout the United States” in violation of the 2010 consent decree that paved the way for its merger with Ticketmaster. “These violations began shortly after the decree was entered in 2010 and have recurred throughout its term, with the most recent known violation occurring as late as March 2019.”

“As a result of this conduct, venues throughout the United States have come to expect that refusing to contract with Ticketmaster will result in the venue receiving fewer Live Nation concerts or none at all… As a result,  many  venues  are  effectively  required  to  contract  with  Ticketmaster  to  obtain  Live  Nation concerts on reasonable terms, limiting the ability of Ticketmaster’s competitors to compete in the primary ticketing market and harming venues that would benefit from increased competition.”

It goes on to detail specific instances of what it believes to be threats and retaliation, covering six venues (indicated as Venue A through Venue F rather than by name, for fear of future retaliatory action from the entertainment giant).

Unsurprisingly, Live Nation disagreed with the findings despite the settlement.

“Live Nation settled this matter to make clear that it has no interest in threatening or retaliating against venues that consider or choose other ticketing companies,” a rep for the company said in a statement provided to Rolling Stone. “We strongly disagree with the DOJ’s allegations in the filing and the conclusions they seek to draw from six isolated episodes among some 5,000 ticketing deals negotiated during the life of the consent decree. Nevertheless, in keeping with our decision to settle, our focus is now on bringing this matter to its conclusion and continuing to deliver the best live event experiences to fans everywhere.”

Going forward, Live Nation must maintain its own compliance department related to its adherence to the decree, in addition to the appointment of an independent “monitoring trustee” to keep an eye on things. The decree itself has been extended by five and a half years, with the explanation that the standard ticketing contract is shorter than that period. Any violations found in this period (or within a four year window following the expiration of the extended decree for violations found to have occurred while the decree was in force) are subject to a $1 million penalty for each instance.

All in all, the prevailing opinion we’ve seen is that Live Nation got off fairly light. Despite the DOJ finding numerous examples of specific violations of its consent decree, it is walking away with no significant changes to its current business, and only a $3 million slap on the wrist. Whether or not the increased scrutiny on its contract processes will lead to additional fines and penalties down the road remains to be seen, but it appears that, for now, it will be business as usual for the company in charge of most of the North American live entertainment business.

Despite Multiple Consent Decree Violations, Live Nation Gets Slap on Wrist from DOJ