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Live Nation Addresses Unlikely Breakup Amid Looming DOJ Lawsuit
May 7, 2024
In a recent discourse addressing the specter of a Department of Justice (DOJ) lawsuit, Live Nation’s chief financial officer and president, Joe Berchtold, offered insights into the impending legal predicament. Berchtold underscored Live Nation’s proactive stance, indicating forthcoming deliberations with senior DOJ officials. However, he believes that the breakup of Live Nation and Ticketmaster, although speculated upon, is unlikely due to a complex array of legal obstacles.
“Based on the issues we know about, we don’t believe a breakup of Live Nation and Ticketmaster would be a legally permissible remedy,” Berchtold said. He explained that the crux of the DOJ’s investigation appears more fixated on dissecting specific business practices rather than scrutinizing the 2010 merger between Live Nation and Ticketmaster, which was greenlit by the DOJ.
The looming antitrust lawsuit is reportedly slated for filing as soon as this month, according to the Wall Street Journal’s original report in April. The allegations pertain to how “the nation’s biggest concert promoter has leveraged its dominance in a way that undermined competition for ticketing live events.”
The lawsuit is a continuation of the DOJ’s prior findings in 2019 when it found that Live Nation had purportedly been violating the terms of its merger agreement. Specifically, Live Nation was allegedly coercing venues into utilizing Ticketmaster’s services and retaliating against dissenting venues.
Further complicating Live Nation’s situation is the proposed class action lawsuit filed by investors, claiming that the company hid the true extent of its legal problems, citing instances of market power abuse within the live events industry.
Despite the legal turmoil encircling Live Nation, the company reported resilient first-quarter revenue of $3.8 billion — a 21% year-over-year increase — strengthened by resolute fan fervor. However, an operating loss of $37 million was ascribed to “one-time accruals.”
CEO Michael Rapino, in a press release, praised Live Nation’s dedication to live events. He emphasized the unstoppable global excitement from fans, predicting more growth ahead.
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