Day 11: States Reveal Ongoing Settlement Talks with Live Nation
On an otherwise slow day of amphitheater testimony and evidentiary hearings, the courtroom saw the clearest sign yet that the states might settle with Live Nation.
If you left the courtroom before proceedings concluded on Friday, you might have concluded that it was the least consequential day of the blockbuster antitrust trial. That impression, however, would have been mistaken. In its final minutes, we learned that the states and Live Nation are actively engaged in settlement negotiations.
Most of the day unfolded outside of the presence of the jury, with the parties discussing what the plaintiffs’ key expert, Dr. Nicholas Hill, will be allowed to include in his testimony on Monday. Dr. Hill is expected to present an analysis that examines the share of concerts at major concert venues (MCV) promoted by Live Nation. His report is likely to show that the share of concerts declines after a venue switches away from Ticketmaster.
The defense took issue with such analysis, arguing that the inclusion of promoters implies a distinct market between artists, promoters and concert booking, a litigation claim that Judge Subramanian has already dismissed. The judge rejected their argument, but he sided with them on a couple more narrow issues.
One Witness
The sole witness, Live Nation Touring Division VP Colin Lewis, gave the jury a different flavor of the testimony that we’ve heard repeatedly throughout this trial about Live Nation effectively excluding competitors from amphitheaters.
When AEG (a rival promotion company) sought to book a Ben Platt concert at the Hollywood Bowl during a period when Live Nation had exclusive access, Lewis wrote in an email, “No AEG under any circumstances.” In another instance, Live Nation staff considered hosting an AEG-sponsored tour featuring Kem and Babyface at the Concord Pavilion, another Live Nation amphitheater. To this, Lewis responded, “We’re not doing that.” Why? Because, as he said, “You can only play amps with us.” In a separate discussion about guarantees for a 2022 Snoop Dogg and Wiz Khalifa tour, Colin said there was “no reason to pay them more because they don’t have options to play other amps.”
On the stand, Lewis said he intended these messages to be understood differently than how the plaintiffs suggested, but he offered little clarification on what he meant. Like other Live Nation/Ticketmaster employees, he said that it is uncommon for artists to structure tours exclusively around amphitheaters, though he maintained that such tours could, in theory, take place without relying on Live Nation venues. He also said that the company’s exclusive use of amphitheaters allows artists to receive greater revenue, as
Will They Settle?
In the final minutes of the day’s proceedings, Judge Subramanian asked if there were any updates on settlement discussions. Surprisingly, there were.
NY State Attorney General Antitrust Chief Elinor Hoffman, who hasn’t spoken in court since she announced that she would lead the states’ settlement consortium two weeks ago, said that the states had made a counteroffer to Live Nation on Wednesday. Both sides seemed to be under the impression that Live Nation was considering the offer. Dan Wall, Live Nation’s top counsel, said the company was understandably busy the previous day with Michael Rapino’s testimony, but that they would get back to the states shortly. Judge Subramanian even offered to provide the parties with a magistrate judge later that afternoon, but they opted to wait for Live Nation’s response before going down that path.
This was the first the courtroom has heard of continued negotiations since the trial recommenced without the DOJ. There is no way of knowing how close the sides are to making a deal. It’s difficult to imagine the states agreeing anything close to the DOJ’s settlement terms.
That settlement leaves intact much of Live Nation’s vertically integrated structure. The company’s so-called flywheel, across promotion, ticketing and venues, allows it to absorb concessions in one segment and potentially recoup losses in another. Consider the settlement requirement that that Ticketmaster impose a 15 percent fee cap on ticketing fees at amphitheaters. Even if Ticketmaster lowers its fees at amphitheaters, Live Nation, which would still owns or exclusively operate the top amphitheaters in the U.S., could offset that cost through ancillary fees, like the $15 lawn chair rentals that took center stage on Thursday.
The DOJ settlement was reported by the Wall Street Journal to have been conceived after lobbyists and powerful industry executives, including WME CEO Ariel Emmanuel, appealed directly to Trump to settle the deal.
The states AG’s have their own motivations, some of which are undoubtedly political as well. It may not bode well with their constituents to settle with Live Nation on unfavorable terms after embarking on this widely popular war against the company.
Following news of the DOJ settlement Sen. Amy Klobuchar (D-MN) introduced the Antitrust Accountability and Transparency Act to reform the Tunney Act, the process by which courts approve settlements like this.
You should expect an interesting report on Monday’s events. Either there will be big settlement news, or we will hear from the plaintiffs’ key expert. Or both.