Will Kbach (Senior Editor and Host) (20:09)
Thanks, John. Now here's my take. I came of age as a concert goer in the post Covid world, so I didn't have a strong sense of the before times. Now that I'm out of school and living in New York City, I attend a lot more live events these days. And even without a baseline to compare it to, in just the past few years, ticket prices seem to have shot up, the buying process has become more convoluted, and the event experience itself is a lot more corporate and less human. So when I read about the Justice Department's lawsuit against Live Nation back in 2024, I was excited by the prospect of change. Live Nation and Ticketmaster are ubiquitous in all things events, and it seemed obvious to me that they are, at minimum, approaching monopoly status and abusing their growing leverage. Industry experts, lawmakers and reporters confirmed that sense at the time and after the 2022 Taylor Swift debacle, a range of Republican and Democratic attorneys generals signing onto the DOJ suit looked like responsive Democratic governance. That suit has now produced a settlement agreement that potentially includes $280 million for damage claims and changes to the company's most pernicious alleged practices. I support this outcome, and I think the deal will rein in some of Live Nation's worst behavior to the benefit of artists, venues and fans alike. But I also think that Live Nation has become a punching bag for all the things we dislike about live events, and the tendency to blame them for everything wrong with the industry obscures one key issue that they don't control, which is demand. But first, let's talk about the benefits of this settlement. In 2024, the DOJ accused Live Nation of a host of anti competitive practices, all of which plausibly damaged the event experience. In simple terms, the company allegedly drove up prices and boxed out competitors by amassing control over venues, tours and ticket sales, particularly after it acquired Ticketmaster. And the numbers really speak for themselves here. Under the DOJ's definition of the events market, Live Nation controls over 80% of major concert venues, primary ticketing for concerts, and about 60% of concert promotions at major US venues. It also holds exclusive arrangements with 265 venues. That degree of control is ripe for abuse. In one example cited in the suit, Live Nation allegedly colluded with venue development company Oakview Group OVG to minimize competition and maintain leverage over artists in 2016. According to emails obtained by the DOJ, Live Nation CEO Michael Rapinoe emailed OVG CEO Timothy Leiweke, seemingly warning against taking on an artist that Live Nation had previously promoted and suggesting it would allow the artist agent to play the companies off each other. Labeki replied, quote, our guys got a bit ahead. All know we don't promote and we only do tours with Live Nation. When a similar issue arose in 2022, Labicki told Rapinoe, we have never promoted without you won't, adding, quote, I never want to be competitors. In its rebuttal to the DOJ suit, Live Nation said that OVG is a venue manager, not a promoter, so a mutually beneficial agreement between the companies is reasonable and legal in theory. That's a fair point, but the emails suggest a deeper relationship wherein OVG acted as an unofficial arm of Live Nation in return for exclusive business arrangements. Such arrangements would strip leverage from both artists and fans and could constitute violations of the 1914 Clayton Act. Now, monetarily, the settlement is a slap on the wrist. The $280 million fund amounts to just 1% of Live Nation's $25.1 billion in revenue in fiscal year 2025. Now, yes, that's also about 40% of its reported $690 million profit for fiscal year 2025. But they get to keep their business whole and avoid what could have been a crippling cost if they had lost at trial. However, the changes to how Live Nation interacts with other players in the event space are much more significant, in my view. The deal would reportedly end its exclusive relationship with venues, allowing multiple vendors to sell tickets for an event, and it would permit touring artists performing in Live Nation owned amphitheaters to use non Live Nation promotion companies. Both of these reforms take direct aim at monopolistic practices and seem like wins for artists and venues, though it bears mentioning that many venues do prefer to have exclusive partnerships with ticket platforms for simplicity's sake. But the biggest victory in this settlement, in my opinion, is the agreement to cap service fees at 15% of a ticket's face value, though this only applies to amphitheaters that Live Nation owns, operates or controls. The company owns many of the most popular amphitheaters, so many consumers should pay lower fees now and for reference, more of a personal example, I recently bought tickets through Ticketmaster to see one of my favorite artists, Rufus De Sole, perform at a Live Nation owned amphitheater. The tickets themselves were $64.50 each, with a $19.25 service fee tacked on, and that's 30% of the face price. Now, Ticketmaster doesn't keep 100% of that fee. A portion does go to venues to support their operations, but revenue from fees is a major part of Live Nation's business model. Under this settlement, that fee would be halved, meaningfully lowering the cost to attend many shows and dampening the frustration of extra costs in the checkout process for consumers. It's also a major concession for Live Nation, given how much money it makes from these fees. So again, with all this in mind, the core tenets of this deal contain wins for venues, artists and fans, and it would represent a major step toward a healthier live event space. But I don't think crucially that it will bring down event prices or make the ticket buying process less stressful. For all the talk of the pandemic leaving us more isolated and introverted, demand for in person experiences has boomed over the last few years. If you've participated in concert pre sales recently, you've probably witnessed that demand firsthand. For the show that I talked about before, over 60,000 people were with me in the ticket queue for the presale, and that's for a venue with a 27,500 person capacity. And hey, that is great. I love that people want to get together to dance and listen to music, and I love that it means more support for amazing artists of all stripes, not just Taylor Swift and Harry Styles. But demand is outstripping supply, and supply is inherently limited by the venue's capacity and finite tour dates. I don't think any government intervention can change this reality now. One possibility to address affordability is to crack down on the ticket resale market, which has become a diseased husk of bot activity. Maine recently enacted a first of its kind law that bans ticket purchasers from using bots to buy tickets in bulk and then charge more than 10% of the total price of the original ticket on the resale market. I'll be curious to see what effect that law has on ticket prices and whether other states follow suit. Bluntly, though, I don't think laws like this are the answer either. The resale market has grown so big because people are willing to pay for these tickets, even at massive markups. We simply haven't hit a point where enough people decide they can't afford a ticket for an event they want to attend to bring demand into equilibrium with supply. Or at least closer to it. Putting limits on resale prices might bring down the average cost of tickets, yes, but I suspect it will just make live events inaccessible to almost everyone except those lucky enough to be at the front of the virtual queue when tickets are first released. Now that's a bitter pill to swallow. I don't like to say that, but high prices are the cost of making tickets accessible to the people who want them most. And that will remain true no matter how big a fine Live Nation pays, how many reforms it agrees to, or even in the most extreme outcome, if it's forced to split off from Ticketmaster. Demand is demand. So yes, this settlement addresses real problems that should lead to tangible improvements at several levels of the events industry. But we should also note that it's not a silver bullet. All right, that is it for my take. I'm going to pass it over to our executive producer, John Lal. I know you usually hear him at the front and end of the podcast, but John is somebody who has direct personal experience in the live events industry, and he authored A Descent to My Take today. He has a really valuable perspective to share, and we're excited to have him make his debut in the Descent section. So Jon, I'll pass it over to you and then I'll jump back in to answer our reader question.