Day #14: Company Paid $70 Million to Steer Venues to Ticketmaster, Executive Testifies
The CEO of Oak View Group, a management company hired to act in the best interest of venues, told a jury Wednesday that it is paid tens of millions of dollars to push the venues towards Ticketmaster.
A company hired to advise venues on ticketing decisions is being paid tens of millions of dollars to steer them toward Ticketmaster, at times without telling its clients.
Oak View Group (OVG), co-founded by the former CEO of Ticketmaster, is one of the largest venue management companies in the U.S. It owns a handful of arenas and manages more than 200 venues across the country. In those managed venues, it controls operations and advises on strategic decisions, including which ticketing service venues should hire.
The company is also required to push those venues to select Ticketmaster.
Contractual Obligation to “Sing the Praises of Ticketmaster”
On Wednesday, OVG president Chris Granger told the jury about a 10-year agreement it signed in 2022 with Ticketmaster. The deal guarantees Ticketmaster exclusive ticketing rights at venues OVG owns. More importantly, for the venues OVG manages it is required to advocate Ticketmaster to be the exclusive ticketing service. OVG is also required to act in the venues’ best interest.
Plaintiffs’ attorney Josh Hafenbrack laid it out: “So, one of these venues, their contract comes up for renewal, and what you are obligated to do is to go in and sing the praises of Ticketmaster to that venue, is that true?”
“Correct” said Granger.
It Goes Further…
At venues already using Ticketmaster, OVG must push not just for renewal, but for annual increases of at least 2 percent in Ticketmaster’s share of ticketing fees. At venues using rival ticketing services, OVG must advocate for switching to Ticketmaster and a 60/40 fee split agreement as part of the deal, with 60 percent going to the venue and 40 percent going to Ticketmaster.
But OVG’s own internal analysis showed that this deal was financially worse for the venues, the Hafenbrack argued. In 2023, six OVG-managed venues using Paciolan (a rival ticketing service) came up for renewal. Hafenbrack presented Granger with the results of an “apples-to-apples” study the company conducted, which found that all six would make less money under Ticketmaster’s required 60/40 split.
They all switched anyway.
Hiding the Ticketmaster Contract From Venues
Despite having a fiduciary duty to disclose “material information including conflicts of interest,” Granger admitted OVG did not tell these venues about its financial incentives from Ticketmaster, which include an annual bonus of up to $7.5 million and its $20 million signing bonus in 2022.
When pressed about this, Granger simply uttered that he didn’t know why they didn’t reveal this, followed by “we should have.” It was a rare moment of apparent regret and humility the likes of which this courtroom has seen little of over the past several weeks.
(Not coincidentally, the Antitrust Division had charged Tim Leiweke, the former CEO and co-founder of OVG, with bid-rigging, before Trump pardoned him last December. This deal with Ticketmaster is in the non-prosecution agreement with OVG. However, this whole saga didn’t come up at trial.)
Though Granger acknowledged that more competition generally produces better outcomes for venues, he also admitted that several of its managed venues have only had one competitor join the bidding process: Ticketmaster.
One of these, the XL Center in Hartford, Connecticut had to have two bidding processes after OVG failed to make the bidding process competitive. The city-owned arena, managed by OVG, switched from Paciolan to Ticketmaster in 2023 after a limited bidding process. After the city found out about this, they intervened and decided to oversee a new fully competitive process for the venue’s ticketing service. This time, Ticketmaster lost the contract to rival ticketing service AXS.
The most expressive juror of the bunch turned to look at her fellow jurors, as if to confirm she had heard correctly. As in the other shocking moments throughout this trial that prompted such a reaction from her, the other jurors kept their eyes forward, jotting notes on their notepads.
The Attempt to Defend
The defense, led by Lauren Moskowitz, one of Live Nation’s most skilled attorneys in this case, struggled to explain away what the jurors had just heard. She repeatedly honed in on the fact that the venues ultimately decide their ticketing service and some OVG-managed venues don’t hold any concerts.
At one point, attempting to downplay the 2 percent annual increase in Ticketmaster’s fee share, Moskowitz asked Granger whether the inflation rate since 2022 has exceeded 2 percent. When he said it had, she quipped, “I think we’ve all personally experienced that.”
The line, seemingly an attempt to connect with the jurors while simultaneously defending the spiking of fees towards Ticketmaster, fell flat.