A Wild Day as Trump DOJ Settles with Live Nation/Ticketmaster, State Enforcers Balk
The Trump DOJ settled with Ticketmaster, while state enforcers said they'll continue. The judge is mad, the parties showed "absolute disrespect for the court, for the jury, for this entire process."
It’s been a wild day in the courtroom. Gigi Liman is there, but I’m writing it up because she’s not allowed to use electronics in the courtroom. On day one of this trial, we noted that the specter of corruption and a potential settlement is hanging over the proceedings, because Live Nation retained well-known MAGA lobbyist and fixer Mike Davis. Well today the Antitrust Division abruptly announced that it has reached a deal with Live Nation. The stock of Live Nation skyrocketed on the news.
The details are probably the least important part of the deal, but here’s what the chatter suggests. It involves Live Nation paying $300 million to states for restitution, some behavioral remedies to allow rivals to sell tickets, a restriction on exclusive contracts, and the sale of 10 amphitheaters. That said, this consent decree would be the third such decree since 2010, and none of them have delivered competition to the market. So there’s no reason to assume this one will either.
There are a bunch of oddities here. First, the settlement was seemingly hidden from Judge Arun Subramanian. The term sheet was signed on March 5th by the CEO of Live Nation and the Acting Assistant Attorney General. The following day, there was a meeting in chambers with the judge. No one brought up the fact that there was movement with a settlement.
“It was never stated to me that there was an executed term sheet that was signed the prior day,” Judge Subramanian said.
The judge apparently first found out about the executed term sheet last night. “Among other things I received notification of at 8pm last night that the parties had a term sheet,” he said. “You know what was not attached to that email? A term sheet.” He didn’t get eyes on the term sheet until 6:30 am this morning. The closest to irate this otherwise temperate judge has gotten, he told the DOJ and Live Nation that their conduct “shows absolute disrespect for the court, for the jury, for this entire process.”
And that’s not all. David Dahlquist, who is lead counsel for DOJ, didn’t see the term agreement till this morning either, the same time as the judge. That’s extremely weird, and suggests this deal was cooked up by the higher up politicos. It’s unclear exactly when Live Nation’s counsel learned that the term sheet had been executed.
“We cannot agree to it.”
That said, there are other parties to this trial, which is to say, the state attorneys general. And they have not relented. New York AG Tish James said the deal “fails to address the monopoly at the center of this case, and would benefit Live Nation at the expense of consumers.” And they will continue litigating. James issued a list, which notably includes both red and blue states.
Joining Attorney General James in continuing the lawsuit against Live Nation are the attorneys general of Arizona, California, Colorado, Connecticut, Illinois, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin, Wyoming, and the District of Columbia.
The states have asked for a mistrial, arguing that the settlement has “has materially and irreparably prejudiced the Plaintiff States before the currently empaneled jury, and materially altered the character of these proceedings, including by jeopardizing Plaintiff States’ access to experts, witnesses, trial exhibits, demonstratives and necessary support staff (including graphic designers, trial technicians, related personnel).”
The DOJ has carried the majority of the government’s litigation (including the states’). The DOJ currently has about 40 lawyers working round-the-clock on this case. The states do not. To run this trial on their own, they say, they would need to obtain large swaths of materials, transfer data bases and reallocate their own resources. There are also questions about whether the states could retain the same key experts expected to testify on behalf of the plaintiffs.
The judge didn’t buy this as reason enough to grant their request and was just as unhappy with them as he was with the other parties. The states knew, he said, that there was discussion of settlement, as early as January 29. Why weren’t they preparing? “Now you’re saying to the court we don’t like where we are and we want a redo,” he said.
Trump’s Department of Justice Doesn’t Want to Break Up Live Nation
The judge has dismissed the jury for a week, and will have the parties in tomorrow to talk about the motion for a mistrial, including the Acting Assistant Attorney General, Omeed Assefi, and the CEO of Live Nation, Michael Rapino.
It seems clear that the DOJ leaders aren’t conceding for strategic reasons, they just don’t want to break up the company. Here’s a quote by a top DOJ official given to Ben Remaly of the Global Competition Review. "If the concern is that Ticketmaster operates as a monopoly, how does the American consumer benefit from an existing monopoly being offloaded to a third party... probably private equity." My guess is that’s coming from outside of the Antitrust Division. And it shows how they can’t imagine a non-dysfunctional economic order.
More on this fiasco soon.