As we approach a year since Live Nation Entertainment’s disastrous rollout of tickets for Taylor Swift’s nationwide tour, it remains to be seen whether the company’s pairing with Ticketmaster will be challenged or undone.

While a variety of class-action antitrust lawsuits have since targeted the Beverly Hills-based venue owner and event promoter, their efficacy in shaping business practices is seen as questionable. And although there were reports this summer that the Department of Justice may file antitrust action by the end of this year, that hasn’t yet materialized and there aren’t many indications suggesting a stronger likelihood that it’s coming.

At any rate, the company certainly continues to endure derision from the public, which has decried the operation as a monopoly since the merger nearly 14 years ago.

“My big-picture view of Live Nation is there’s a little bit of absurdity going on that many people predicted when there was the coordination and consolidation resulting from the government approving the Live Nation-Ticketmaster conglomerate,” said Steve Weisburd, managing shareholder at the Century City office of law firm Carlton Fields. “When I saw the government approving that, I remember thinking ‘Wow.’”

Still, Live Nation is joined by a variety of venue owners and entertainment entities that saw and continue to see the combination as beneficial for more than just the company. Executives claimed at the time the operation would be better for artists, venues and consumers – and they’re likely to lean on the past 14 years of industry data to support that claim should they wind up back in federal court.

“There are reasons why you could argue that it might (be an improvement). You might say now that they’re a bigger company, they can make a better product, invest more, reach more people,” posited Milan Miric, an assistant professor of data sciences and operations at USC Marshall School of Business. “You have these arguments about whether this could be better for everyone overall. To make this merger happen, I would assume that a similar argument was made.” 

Live Nation is Los Angeles County’s sixth largest public company as ranked by the Business Journal in July because of its $21 billion in market capitalization on June 30.

How we got here

Live Nation’s and Ticketmaster’s debacle a year ago with Swift’s tour has been thoroughly documented.

While the company created a presale screening process for fans, an effort to prevent bots from scooping up tickets, it apparently failed to anticipate the sheer volume of so-called Swifties clamoring for the singer’s first tour in years. And if it anticipated that volume, it certainly wasn’t prepared to handle the amount of internet traffic that occurred when the presale went live, with thousands of fans failing to receive the necessary codes to enter the portal or having their internet browsers crash upon entering that portal.

The fans who made it past all of that found tickets that cost hundreds of dollars for even the least desirable seats.

And although this policy was not in place for the Eras Tour, in other instances, Ticketmaster’s tickets can be resold through its own marketplace only, where it charges a fee for the resale, a policy the company claims stymies scalpers.

“Personally, I’m on the side of that being a little bit too cute,” Miric said. “I think you can make an argument that a resale market managed by an entity like Ticketmaster can overcome things like fraud. At the same time, you might raise the question of how big is that market and how many people are actually being defrauded? To what extent is that a significant issue?”

Live Nation repeated the experience months later, when it opened ticket sales for the Swift tour in the European market. Since then, a variety of class-action suits have been filed, for the most part challenging the conglomerate’s hold over the industry. Separately, Congress has held hearings investigating the issue, and there has been rampant speculation about federal antitrust action.

“The plaintiffs are saying, ‘I’ve been damaged because I bought tickets that were priced way too high because of the combination of Ticketmaster and Live Nation controlling way too much of the market,’” explained Bryan Sullivan, a founding partner with downtown-based Early Sullivan Wright Gizer & McRae LLP, “whereas the government would be arguing, ‘This is a combination that restricts trade to the extent that it violates the Sherman Act and Clayton Act and we’ve got to break this up.’”

The merger attracted skepticism because the most logical conclusion, critics contend, was that Live Nation’s control of venues would give it a significant amount of leverage over artists seeking a promotor. 

“There’s usually a bunch of reasons these companies want to get together. It has to do with removing competition, and it also has to do with offering a bundle of things,” Miric said. “That’s what they want, and there’s a natural tendency to move toward that, and then you have these regulators whose jobs it is to look at this and determine whether this is good for consumers.”

The Justice Department ultimately allowed the merger to happen after Live Nation made several concessions – chiefly that it had to sell college sports marketing company Paciolan, license certain software to competitor Anschutz Entertainment Group, known as AEG, for five years and agree to not retaliate against venues that accept competing ticket contracts until 2020. Federal oversight of the company will continue through 2025, on account of a decree violation in 2019.

The company contends that its merger has secured victories for consumers and artists. While testifying before the Senate Judiciary Committee in January, Joe Berchtold, the company’s president, noted that live music was a $12 billion industry in the United States last year, four times what it was in 2005 – a statistic he attributed in no small part to Live Nation. He added that artist payment across all of its venues averaged $178,000 per show – a 67% increase since 2011. 

Regarding the Taylor Swift fiasco, Berchtold testified that Ticketmaster’s website was hit with three times the amount of bot attacks than it had ever contended with before, and that, for the first time, bots targeted the presale access code servers.

And while the Justice Department claimed in its arguments that Ticketmaster in 2009 held 80% of the market share, Berchtold alleged this year that multiple competitors – old foes like AEG and Paciolan and newcomers like SeatGeek and Eventbrite – have whittled away at that share since then.

“Ticketmaster has lost, not gained, market share, and every year competitive bidding results in ticketing companies getting less of the economic value in a ticketing contract while venues and teams get more,” Berchtold told the committee. “The bottom line is that U.S. ticketing markets have never been more competitive than they are today, and we read about new potential entrants all the time.”

Live Nation did not respond to a request for comment.

For its part, Live Nation has amassed a show of support from venue owners including Kroenke Sports & Entertainment and entities such as Major League Soccer’s Los Angeles Football Club. And while shares in Live Nation fell nearly 11% in the wake of the Taylor Swift disaster (they closed at $66.21 on Nov. 18, the low point for 2022), this year has been mostly a good one for Live Nation’s stock price. It closed at $77.70 on Wednesday.

Now what?

With civil legal action underway, and the potential for federal action, what can Live Nation and its competitors expect?

Class actions famously coax large settlements or verdicts out of large companies, such as what happened at Uber or Meta, for wage-related or data-privacy reasons. However, the large number of plaintiffs that sign onto the suits mean settlements divided among millions of plaintiffs. Furthermore, it’s unclear whether the suits influence or modify company behavior.

“Those hearings do always play out better for the complaining plaintiff groups than they do for the companies,” Weisburd said. “The thing that troubles me also about class-action lawsuits is that we think it resolves the problem. I don’t know of that many suits that ultimately truly provide a remedy for a problem of this structural magnitude.”

Sullivan agreed that those filing class actions have a colorable claim against Live Nation, but actually litigating them to victory will probably be a challenge. Live Nation reported $16.7 billion in revenue last year, so it certainly has the means to fight a case and pay out a disbursement if need be.

 “I’m going to guess this is millions of dollars of expert testimony to pay for if this case goes to trial,” Sullivan said. “In general, these claims are difficult. It requires an analysis of the entire marketplace in your market.”

Federal action, on the other hand, would specifically target business practices and arrangements – if it even comes. While the Swift tour concentrated the public’s attention, Politico reported in July that the feds had been looking at Live Nation even before that, though no officials have yet been deposed.

Sullivan said the worst-case scenario, should this materialize, is that the merger would be broken up. Short of that, smaller arms of the operation could be sold off.

Politically, the appetite might be there – President Joe Biden and other Democrats have been vocal about addressing the ticketing market. The Federal Trade Commission, under chairwoman Lina Khan, has amplified its antitrust activity, albeit to mixed results; earlier this year the agency lost its lawsuit to prevent Microsoft’s acquisition of Santa Monica game developer Activision-Blizzard. However, as Politico reported, the FTC is already busy with a trial against Google, a suit to block the merger of JetBlue and Spirit Airlines and ongoing investigations against Apple, Visa and Adobe’s proposed takeover of Figma.

Weisburd noted that while Democrats have positioned themselves as the antitrust party, there has been some bipartisan cooperation on antitrust matters in recent memory. Khan’s appointment to the FTC, as a Biden nominee, was bipartisan in large part because of the general animus toward Amazon shared by major political blocs. Senate Republicans have also specifically taken aim at Live Nation since last year.

“Typically, we’ve seen Democratic administrations in the past being more activist, and it is an election year,” Weisburd added. “But maybe this is an issue that cuts across the aisles, because everybody likes Taylor Swift and everybody likes entertainment.”