Live Nation Entertainment’s stock jumped 6.5% on Friday after the U.S. Justice Department argued in federal court that the company should be broken up for allegedly monopolistic practices. The DOJ claims that Live Nation uses its Ticketmaster subsidiary to control the live events industry, making it hard for venues to work with competing ticketing services.
Government lawyers said that venues that switched from Ticketmaster to rivals lost about five concerts a year promoted by Live Nation. This translated into roughly $1.5 million in lost revenue, or more than $300,000 per event. The DOJ specifically mentioned New York’s Barclays Center as an example of a venue that lost shows after leaving Ticketmaster. Lawyers also noted that some venues believe Ticketmaster’s services are inferior to competitors.
Live Nation merged with Ticketmaster in 2010 and has denied any illegal monopoly. The company has asked U.S. District Judge Arun Subramanian to dismiss the lawsuit or rule without a trial. The case is set for trial on March 2.
The DOJ highlighted Live Nation’s size in the industry: the company controls more than 265 concert venues in North America and manages over 400 musical artists. According to the government, Live Nation accounts for roughly 87% of the concert ticketing market through Ticketmaster and over 65% of the concert promotion market.
Representing Live Nation, Andrew Gass argued that in 15 years of investigation, the government could only identify eight instances where Live Nation allegedly threatened to withhold concerts from venues that switched ticketing services.
The case is being heard in the U.S. District Court for the Southern District of New York. Investors appear to have reacted positively to the proceedings, driving the stock higher, despite the potential legal challenges facing the company.
