Antitrust trial against Live Nation and Ticketmaster continues with states leading the charge

NEW YORK (AP) — The antitrust trial of Live Nation and Ticketmaster resumed Monday in a New York federal court with three dozen states remaining in the case a week after the Justice Department settled its claims and withdrew.

Judge Arun Subramanian told jurors in Manhattan that Arkansas, Nebraska and South Dakota, like the U.S. government, had settled claims and were no longer part of the case.

Testimony then resumed with an attorney for the remaining states questioning Jay Marciano, the chief executive of AEG Presents, which is Live Nation’s chief competitor.

Marciano said his company has trouble overcoming exclusive contracts used by Live Nation Entertainment and Ticketmaster to dominate the industry in the U.S. He said a more competitive environment exists in Europe, where consumers pay 15% fees on tickets rather than the 25% it costs concertgoers in the United States.

He said AEG would prefer that multiple ticketing companies be allowed to sell every show because “fans are rewarded.” On cross examination, Marciano conceded that his private company was a giant in the industry as well, drawing revenues from events that attracted over 100 million customers annually.

Later in the day, Robert Roux, Live Nation’s president of live concerts, described his employer as an “artist-first company” that does 90% of shows in smaller venues, where it can groom artists to someday reach the large crowds and big paydays that come with stadiums, arenas and amphitheaters.

He said there was already “extreme” competition in the industry from players like AEG who cause Live Nation to change its offers to artists “all the time” to keep or gain a client.

Roux said companies like Live Nation operate in a high risk, low-margin business where contracts they sign require guaranteed money be paid to artists, often in advance, with no assurance ticket sales won’t be spoiled by something the artist says, a change in the economy or a surprise like the onset of the coronavirus pandemic.

One tour, he testified, required an advance payment to cover roughly $20 million pre-tour costs, including the rental of 87 semitractor trailers to haul everything needed for the show.

“Through it all, we just keep doing what we’re used to doing and do our best,” he said.

Questioned by a Live Nation lawyer, Roux said artists choose where they play and negotiate details like ticket prices. He said he never asked artists to play venues where they didn’t want to play and, asked if his company ever withheld shows from venues that refused to use Ticketmaster, he said flatly: “Not true.”

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For a time last week, it seemed the trial might not proceed at all. The states requested a mistrial after U.S. government lawyers said they’d reached a tentative settlement. After the judge urged states to negotiate for several days with attorneys for Live Nation, the states withdrew their mistrial request and Subramanian said the trial would resume Monday.

On Friday, lawyers for the states indicated that seven states were well on their way to joining the federal government’s planned settlement, but the judge said any state that had not reached a final signed deal by Monday would remain in the case until they did.

As the trial resumed, 36 states and the District of Columbia continued to press claims that Live Nation Entertainment and its ticketing subsidiary, Ticketmaster, are blocking competition and driving up prices for fans. They say this was done through threats, retaliation and other tactics to control virtually every aspect of the industry, from concert promotion to ticketing.

Lawyers for Live Nation and Ticketmaster have tried to show jurors that the entertainment and ticketing business is more complicated than the states are portraying it and that it’s impossible to monopolize an industry that is largely controlled by artists, sports teams and venues that set prices and decide how tickets are sold.

The Justice Department said last week that it settled its case after winning concessions from Live Nation that would open up some ticketing to rival ticketing companies and ultimately lower prices for consumers. Numerous states criticized the deal, saying the federal government failed to get enough concessions from the company.