Business
Would breaking up Live Nation and Ticketmaster actually lower concert ticket prices?
The U.S. Department of Justice’s effort to break up Live Nation and Ticketmaster has been a long time coming, following years of complaints from concertgoers who say they’ve been squeezed by exorbitant prices and hidden fees when trying to buy passes to see Taylor Swift, Beyoncé and other music megastars.
Ever since the government cleared the merger of concert promoter Live Nation and ticketseller Ticketmaster in 2010, there have been demands from consumer advocates to cleave them. The Justice Department argues that the combination is a monopoly that has resulted in harm for music fans and has clamped down competition in the multibillion-dollar live music market.
Live Nation says the arguments are off-base and will probably fail in court. Either way, it will take a long time for the case to wind through the legal system.
Why is the government suing Live Nation?
The Justice Department has raised concerns that Live Nation and Ticketmaster have retaliated against competitors and new entrants and locked out competition with exclusionary contracts.
“The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services,” said Atty. Gen. Merrick B. Garland. “It is time to break up Live Nation-Ticketmaster.”
Beverly Hills-based Live Nation, the world’s largest concert company, has long been a target for government scrutiny.
When the U.S. approved the 2010 merger, it did so after the companies agreed to a settlement meant to ensure fair competition in the ticketing marketplace and prohibit Live Nation from retaliating against venue owners that decided to defect to competitors. The consent decree was extended and amended in 2019.
But this time, the government is going hard at the company. In its Thursday lawsuit, the U.S. accused Live Nation of various anticompetitive practices and said the company uses its market dominance to impose fees on consumers and pressure artists to use its services.
The suit comes amid a wave of antitrust action from the Biden administration, which has sought to curb the power of conglomerates and Big Tech. The U.S. government has filed other cases against tech giants including Apple, Amazon and Google, taking them to task for their alleged impact on competition.
Live Nation said that the lawsuit will not solve issues related to ticket prices, service fees or access to in-demand shows.
“Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, such as the fact that the bulk of service fees go to venues, and that competition has steadily eroded Ticketmaster’s market share and profit margin,” Live Nation said in a statement.
Would breaking up Live Nation lower prices?
Several industry observers who spoke to The Times expressed doubt that the lawsuit would significantly reduce prices for consumers.
Brandon Ross, an analyst at research firm LightShed Partners, said that artists decide how much they want to charge for a tour and then the promoter buys the tour from them. Due to Live Nation’s large scale, it is able to take a lower profit margin, with most of the money going back to the artist, Ross added.
“There is an efficiency in having a large player in the industry,” Ross said. “If that goes away, then that’s going to come out of either the artist’s take, or the artists are going to charge consumers even more.”
Artists like Swift and Bruce Springsteen are able to charge big sums for tickets because the concerts are one-time events, and some people are willing to pay. Because of supply and demand, tickets resold on the secondary market can be much higher than face value.
But James Sammataro, co-chair of Pryor Cashman’s music group, said he believes the lawsuit could address issues such as excess ticketing fees.
“What’s really harming the consumer is all these excess fees and the restrictions on getting the tickets,” Sammataro said. “For most artists, these ‘increased prices’ aren’t really benefiting the artists. In many cases, it’s alienating their core ticket buyers and their core audience.”
There is a larger issue in the music industry of concert tickets being bought at face value by scalpers and resold on secondary markets for astronomical prices.
It’s leading to two classes of music fans: those who can afford to pony up and those who can’t.
Meanwhile, many promoters left the industry after getting clobbered by the pandemic, which shut down or restricted many live events. Some smaller music artists have also been hurt by the lack of competition among promoters and are not given opportunities to play at larger venues, Sammataro said.
“The overall effect is that it leads to a very tilted playing field where it’s difficult for promoters to compete,” Sammataro said. “And when you have a lack of competition, essentially like the basis of predatory pricing, ultimately there’s going to be long term gouging.”
Could the company actually be broken up?
Anything is possible, but there is one thing everyone agrees on: This legal battle will be a long fight.
“Antitrust litigation can be long and protracted,” said Eric Enson, an antitrust partner at Crowell & Moring. “I expect that this will be a matter of years and not months.”
Music industry expert Bill Werde, who runs the music business program at Syracuse University, cautioned that splitting up such a large enterprise wouldn’t be easy, and it’s unclear what the businesses would look like after being disentangled from one another more than a decade after merging.
“They make their margin in ticketing and sponsorships, so if you break up this company, … I don’t know how Live Nation the concert promotion business necessarily lives and thrives independent of this high-margin ticketing business,” said Werde, who also publishes a weekly newsletter.
But even if it could lose, there are reasons the government might be motivated to go after the company in an election year. As Werde and other experts were quick to point out, there’s nothing that unites people like hating Ticketmaster.
Lululemon, the yoga pants and athletic clothing company, has hired a former executive from a rival, Nike, as its new chief executive.
Heidi O’Neill, who spent more than 25 years at Nike, will take the reins and join Lululemon’s board of directors on Sept. 8, the company announced on Wednesday.
The leadership change is happening during a tumultuous time for Lululemon, which had grown to $11 billion in revenue by persuading shoppers to ditch their jeans and slacks for stretchy leggings. But lately, sales have declined in North America amid intense competition and shifting fashion trends, with consumers favoring looser styles rather than the form-fitting silhouettes for which Lululemon is best known.
“As I step into the C.E.O. role in September, my job will be to build on that foundation — to accelerate product breakthroughs, deepen the brand’s cultural relevance, and unlock growth in markets around the world,” Ms. O’Neill, 61, said in a statement.
Lululemon, based in Vancouver, British Columbia, has also been entangled in a corporate power struggle over the company’s future. Its billionaire founder, Chip Wilson, has feuded with the board, nominated independent directors and criticized executives.
Lululemon’s previous chief executive, Calvin McDonald, stepped down at the end of January as pressure mounted from Mr. Wilson and some investors. One activist investor, Elliott Investment Management, had pushed its own chief executive candidate, who was not selected.
The interim co-chiefs, Meghan Frank and André Maestrini, will lead the company until Ms. O’Neill’s arrival, when they are expected to return to other senior roles. The pair had outlined a plan to revive sales at Lululemon, promising to invest in stores, save more money and speed up product development.
“We start the year with a real plan, with real strategies,” Mr. Maestrini said in an interview this year. “We make sure decisions are made fast.”
Lululemon said last month that it would add Chip Bergh, the former chief executive of Levi Strauss, to its board to replace David Mussafer, the chairman of the private equity firm Advent International, whom Mr. Wilson had sought to remove.
Ms. O’Neill climbed the organizational chart at Nike for decades, working across divisions including consumer sports, product innovation and brand marketing, and was most recently its president of consumer, product and brand. She left Nike last year amid a shake-up of senior management that led to the elimination of her role.
Analysts said Ms. O’Neill would be expected to find ways to energize Lululemon’s business and reset the company’s culture in order to improve performance.
“O’Neill is her own person who will come with an agenda of change,” said Neil Saunders, the managing director of GlobalData, a data analytics and consulting company. “The task ahead is a significant one, but it can be undertaken from a position of relative stability.”
Eaton wildfire survivors’ anger about Southern California Edison’s burying of electric wires in Altadena boiled over Tuesday with residents calling on government officials to temporarily halt the work.
In a letter to the Los Angeles County Board of Supervisors, more than 120 Altadena residents and the town’s council wrote that they had witnessed “manifest failures” by Edison in recent months as it has been tearing up streets and digging trenches to bury the wires.
The residents cited the unexpected financial cost of the work to homeowners and possible harm to the town’s remaining trees. They also pointed out how the work will leave telecommunication wires above ground on poles.
“The current lack of coordination is compounding the stress of a community still reeling from the Eaton Fire, and risks causing further irreparable harm,” the residents wrote.
The council voted unanimously Tuesday night to send the letter.
Scott Johnson, an Edison spokesman, said Wednesday that the company has been working to address the concerns, including by looking for other sources of funds to help pay for the homeowners’ costs.
“We recognize this community has already faced a number of challenges,” he said.
Johnson said the company will allow homeowners to keep existing overhead lines connecting their homes to the grid if they are worried about the cost.
Edison’s crews, Johnson said, have also been trained to use equipment that avoids roots and preserves the health of trees.
The utility has said that burying the wires as the town rebuilds thousands of homes destroyed in the fire will make the electrical grid safer and more reliable.
But anger has grown as work crews have shown up unexpectedly and residents learned they’re on the hook to pay tens of thousands of dollars to connect their homes to the buried lines.
Residents have also found the crews digging under the town’s oak and pine trees that survived last year’s fire. Arborists say the trenches could destroy the roots of some of the last remaining trees and kill them.
Amy Bodek, the county’s regional planning director, recently warned Edison that a government ordinance protects oak trees and that “utility trenching is not exempt from these requirements.”
Residents have also pointed out that in much of Altadena, the telecom companies, including Spectrum and AT&T, have not agreed to bury their wires in Edison’s trenches. That means the telecom wires will remain on poles above ground, which residents say is visually unappealing.
“While our community supports the long-term benefits of moving utilities underground, the current execution by SCE is placing undue financial and planning burdens on homeowners, causing irreparable harm to our heritage tree canopy, and proceeding without adequate local oversight,” the residents wrote.
They want the project halted until the problems are addressed.
Edison announced last year that it would spend as much as $925 million to underground and rebuild its grid in Altadena and Malibu, where the Palisades fire caused devastation.
The work — which costs an estimated $4 million per mile — will earn the utility millions of dollars in profits as its electric customers pay for it over the next decades.
Pedro Pizarro, chief executive of Edison International, told Gov. Gavin Newsom last year that state utility rules would require Altadena and Malibu homeowners to pay to underground the electric wire from their property line to the panel on their house. Pizarro estimated it would cost $8,000 to $10,000 for each home.
But some residents, who need to dig long trenches, say it will cost them much more.
“We are rebuilding and with the insurance shortfall, our finances are stretched already,” Marilyn Chong, an Altadena resident, wrote in a comment attached to the letter. “Incurring the additional burden of financing SCE’s infrastructure is not something we can or should have to do.”
Other fire survivors complained of Edison’s lack of planning and coordination with residents.
“I’ve started rebuilding, and apparently there won’t be underground power lines for me to connect with in time when my house will be done,” wrote Gail Murphy. “So apparently I’m supposed to be using a generator, and for how long!?”
Johnson said the company has set up a phone line for people with concerns or questions. That line — 1-800-250-7339 — is answered Monday through Saturday, he said.
Residents can also go to Edison’s office in Altadena at 2680 Fair Oaks Avenue. The office is open Monday to Friday from 8 to 4:30.
It’s unclear if the Eaton fire would have been less disastrous if Altadena’s neighborhood power lines had been buried.
The blaze ignited under Edison’s towering transmission lines that run through Eaton Canyon. Those lines carry bulk power through the company’s territory. In Altadena, Edison is burying the smaller distribution lines, which carry power to homes.
The government investigation into the cause of the fire has not yet been released. Pizarro has said that a leading theory is that a century-old transmission line, which had not carried power for 50 years, somehow re-energized to spark the blaze.
The fire killed at least 19 people and destroyed more than 9,400 homes and other structures.
Oil prices rose and stocks moved slightly higher on Wednesday as investors tried to make sense of President Trump’s decision to extend the cease-fire with Iran despite doubts about the status of another round of peace talks.
An adviser to Mohammad Bagher Ghalibaf, the influential speaker of the Iranian Parliament, dismissed the cease-fire announcement, saying that it had “no meaning.” He equated the U.S. naval blockade with bombings, with commercial vessels coming under attack near the Strait of Hormuz, the crucial shipping lane that has been at the center of a growing energy crisis.
-
New York1 hour agoMamdani Considers Delaying Pension-Fund Payments to Ease Budget Gap
-
Detroit, MI2 hours agoThings to do in Metro Detroit, April 24 and beyond
-
San Francisco, CA2 hours agoCA to open 3 new state parks and expand others, including in Bay Area: Here’s where
-
Dallas, TX2 hours agoWild vs. Stars Game 3: Key takeaways as Dallas takes series lead on Wyatt Johnston’s 2OT winner
-
Miami, FL2 hours agoMiami-Dade deputies detain elderly father who they say shot and killed his son after a domestic dispute
-
Boston, MA2 hours agoBoston has one of the best public markets in the country, says USA TODAY
-
Denver, CO2 hours agoRed flag fatigue? Colorado sees near-record number of critical fire days
-
Seattle, WA2 hours agoFOLLOWUP: West Seattle pickleball players band together to save court access