With claims that the company aimed to coerce music venues into using its Ticketmaster subsidiary, the Justice Department is reportedly gearing up to take legal action against Live Nation Entertainment, Inc. The department has the opinion that the company’s conduct went against the merger settlement that Ticketmaster and Live Nation arrived at with the government nearly a decade ago, The Wall Street Journal reported, citing unnamed sources.
The merger between Ticketmaster and Live Nation brought together two of the music industry’s most formidable forces. Live Nation serves the biggest concert promoter in the world and organizes live music events by securing venues, reserving talent, marketing shows and establishing ticket prices. The company has also created an artist-management business.
With the settlement, the antitrust division of the department let the firms join together. However, it made them follow a host of conditions that were meant to keep prices in check for consumers by maintaining competition in the ticketing and music spaces. But critics have wondered if the arrangement worked as it was designed, since ticket prices have increased.
According to unnamed sources cited in the report, Live Nation doesn’t have the opinion that it committed violations. The sources also noted that the firm and the Justice Department have held discussions, but they haven’t reconciled, while the report indicated that details surrounding the specific concerns of the department could not be discerned immediately.
CNBC reported that Live Nation’s shares dropped approximately 7 percent after WSJ reported that the Justice Department was getting ready to take legal action against the firm. The decrease took away approximately $1 billion off of the market cap of the company. That value reportedly stands at about $13.8 billion.
The news comes as Billboard reported that legislators were putting “renewed scrutiny” on Live Nation and the consent order regarding its merger with Ticketmaster.