Live Nation Surges on U.S. Settlement Over Ticketmaster Deal
Live Nation Settles U.S. Claims Against Ticketmaster Unit
(Bloomberg) -- Live Nation Entertainment Inc. settled a U.S. Justice Department investigation that found the company repeatedly violated terms aimed at protecting competition in live music promotion and ticketing when the government approved its purchase of Ticketmaster in 2010.
The original agreement that cleared the Ticketmaster deal will be extended by five and a half years to 2025, the Justice Department said in a statement Thursday. The terms prohibit Live Nation from retaliating against concert venues that use a ticketing company that competes with Ticketmaster.
The settlement “will ensure that American consumers get the benefit of the bargain that the United States and Live Nation agreed to in 2010,” the Justice Department’s antitrust chief, Makan Delrahim, said in the statement.
The U.S. called the resolution, which requires court approval, the “most significant enforcement action” of an existing antitrust decree in 20 years. The original 2010 order clearing the takeover, which was set to expire next year, has long been held up as a prime example of the type of merger settlement that is subject to abuse. That’s because it imposed conditions on how Live Nation operated rather forcing the sale of a business. Delrahim has sharply criticized the government’s use of these so-called behavioral decrees.
Investors applauded the resolution, sending Live Nation shares up as much as 10.5% to $70.65 in New York after CNBC first reported on it. That’s the biggest intraday gain since May 2018. Shares closed up 9.2% to $69.83. Analysts at Evercore ISI called the deal “as close to a best-case scenario as possible” for the company.
Live Nation’s merger with Ticketmaster united the world’s largest concert promoter with the dominant ticket seller in North America. Industry executives have long complained in private about the power of Live Nation, saying that venues feared picking a rival to Ticketmaster because Live Nation could then direct its artists to competing locations.
Live Nation, based in Beverly Hills, California, accounted for more than four times more ticket sales than any other promoter last year, according to Pollstar, an industry trade publication. Fans purchased 49.5 million tickets to Live Nation events, and 11.6 million tickets to events from AEG Presents.
The concert promoter said in a statement that the Justice Department settlement is “the best outcome for our business, clients and shareholders.”
The agreement with the Justice Department clarifies that Live Nation can’t withhold concerts from a venue if the venue chooses a ticketer other than Ticketmaster. The department will also appoint an independent monitor to investigate and report on the company’s compliance.
To contact the reporters on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net;Kelly Gilblom in Los Angeles at kgilblom@bloomberg.net
To contact the editor responsible for this story: Sara Forden at sforden@bloomberg.net
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