International Courant
The US Division of Justice is suing to interrupt up Stay nation, Ticketmaster’s mother or father firm, for alleged antitrust violations.
The lawsuit, filed by 30 states and filed Thursday, follows a DOJ investigation into whether or not Stay Nation maintains a monopoly within the ticketing trade, an investigation that was launched in 2022 and amplified by fan complaints after a failed rollout of tickets for Taylor Swift’s Eras tour.
“We allege that Stay Nation depends on illegal, anticompetitive conduct to exert its monopolistic management over the reside occasions trade in the US on the expense of followers, artists, smaller promoters, and venue operators,” mentioned Lawyer Normal Merrick Garland in a press release. . “The result’s followers paying extra in charges, artists having fewer choices to carry out live shows, smaller promoters being ignored and venues having fewer actual decisions for ticketing providers. It is time to break up Stay Nation-Ticketmaster.”
Shares of Stay Nation fell 6% on Thursday.
Stay Nation reported this in a press release The DOJ’s claims of a monopoly are “absurd.”
“The DOJ grievance makes an attempt to painting Stay Nation and Ticketmaster because the supply of followers’ frustration with the reside leisure trade. It blames live performance promoters and ticketing firms – neither of which have management over ticket costs – for the excessive ticket costs “It ignores every thing that’s really chargeable for increased ticket costs, from rising manufacturing prices to artist reputation, to 24/7 on-line ticket scalping that exhibits the general public’s willingness to pay way over the first ticket price,” says Dan Wall, Stay Nation Government Vice President for Company and Regulatory Affairs.
Dominance of the placement
Stay Nation and Ticketmaster merged in 2010, making a dominant entity within the reside occasions trade. The corporate immediately manages greater than 400 artists, controls roughly 60% of live performance promotions at main live performance venues, operates and manages reside leisure ticket gross sales worldwide and in addition owns and operates greater than 265 leisure venues in North America, together with greater than 60 of the highest 100 amphitheaters, in keeping with the DOJ lawsuit.
By way of Ticketmaster, Stay Nation controls roughly 80% or extra of main live performance halls’ major live performance ticket gross sales, the grievance mentioned.
“Individually and collectively, the conduct of Stay Nation and Ticketmaster permits them to take advantage of their conflicts of curiosity – as promoters, ticket sellers, venue homeowners and artist managers – within the reside music trade and additional entrench their dominant place,” the grievance reads.
U.S. Lawyer Normal Merrick Garland solutions questions from reporters throughout a press convention on the Division of Justice constructing on Might 23, 2024 in Washington, DC.
Kent Nishimura | Getty Pictures
The Justice Division’s lawsuit, filed within the U.S. District Court docket for the Southern District of New York, accuses Stay Nation of violating the Sherman Act and perpetuating a self-reinforcing enterprise mannequin by gathering charges and income from live performance followers and sponsorships. gather, which then makes use of it. to tie artists to unique promotional agreements that give the artists entry to main leisure venues throughout the nation. Stay Nation then makes use of that dominance to signal new live performance venues into long-term lockout contracts, restarting the cycle, the lawsuit alleges.
Stay Nation can be accused of threatening monetary retaliation in opposition to potential opponents and venues that collaborate with rivals; strategically buying smaller and regional aggressive threats with the goal of accelerating their aggressive place; and exploiting a relationship with venue accomplice Oak View Group, transferring the latter’s contracts to Ticketmaster and discouraging competitors in live performance promotions.
The lawsuit alleges that Stay Nation discouraged bidding wars for artists and unlawfully pressured artists to join promotional providers in the event that they needed to make use of the corporate’s venues, generally sacrificing the earnings it earned as venue proprietor can earn by preferring to go away his areas in place. empty as an alternative of getting artists with different promotional contracts.
“In its personal phrases, Stay Nation makes use of its exclusionary conduct as a ‘hedge in opposition to important enhancements by the competitors or perhaps a new competitor.’ However the price of that hedge is one all of us pay, for instance a damaged ticketing web site with substandard customer support that also captures your worthwhile information,” Assistant Lawyer Normal Jonathan Kanter mentioned at a information convention.
“It’s due to these unique ticketing preparations that People face the dreaded Ticketmaster tax, the seemingly limitless sequence of charges mockingly known as service charges or comfort charges, when they’re something however,” Kanter mentioned.
Value of tickets
Stay Nation made headlines final yr when a surge in demand from 14 million customers, together with bots, for Taylor Swift live performance tickets led to disruptions on the venue and gradual queues. A Senate subcommittee issued a subpoena to Stay Nation and Ticketmaster in November 2023, following a months-long investigation into exorbitant ticket costs throughout Swift’s Eras tour.
The excessive costs for the US exhibits precipitated dozens of followers to search for tickets for Swift’s tour in different nations, which may usually be cheaper even after worldwide air journey.
“In different nations the place venues should not certain by Ticketmaster’s unique ticketing contracts, venues usually use a number of ticket firms for a similar occasion and followers see decrease charges and extra revolutionary ticket merchandise because of this,” Garland mentioned at a press convention.
Stay Nation mentioned Thursday that it doesn’t profit from monopoly pricing and mentioned Ticketmaster’s service charges are “no increased than elsewhere, and sometimes decrease.” The corporate famous that its total web revenue margin is on the decrease finish of S&P 500 firms.
Stay Nation additional argued that the lawsuit is not going to cut back ticket costs or service charges. It mentioned that artist groups set the costs for his or her tickets and that venues set and retain nearly all of ticket prices.
“Some name this ‘anti-monopoly,’ however in actuality it is simply anti-business,” Stay Nation’s Wall mentioned. “There is no such thing as a authorized foundation to object to vertical integration on these grounds.”
Stay Nation earlier this month reported its “largest first quarter ever”, citing first quarter gross sales that have been 21% increased than the identical interval final yr.
The corporate has additionally acquired loads of consideration from the general public over the previous yr as a consequence of transparency points concerning hidden charges in ticket costs.
Justice is suing Stay Nation, the mother or father firm of Ticketmaster
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