Live Nation CEO Michael Rapino and his team faced a frustrated federal judge in court on Tuesday after his company reached a shocking settlement with the Justice Department over claims that it illegally dominates the live event industry.
During a roughly hour-long hearing, US District Judge Arun Subramanian asked the Live Nation boss to remain in New York and work to reach terms with the remaining members of the coalition of 40 state attorneys general who have not signed the agreement. He also reminded Rapino and Live Nation’s lawyers that they were legally bound by the settlement’s terms.
Live Nation executive Dan Wall cast doubt on the firm’s ability to reach a settlement with the states.
“The probability of us resolving this is about zero,” he said.
“Not with that attitude,” the judge retorted.
Subramanian said the states should be ready to continue the case by Monday if they were unable or unwilling to settle. A committee of six plaintiffs – New York, California, Texas, Tennessee, Florida and Washington, DC – will lead talks for the remaining parties. So far, only a handful have indicated they will join the DOJ settlement.
The judge reiterated his displeasure over how Live Nation’s attorneys handled the settlement. While a deal between the DOJ and Live Nation was signed by last Thursday, the case still proceeded to trial the next day.
In an odd twist, lead Justice Department attorney David Dahlquist said earlier this week that he did not receive the term sheet with details about the settlement until around the same time Monday the judge was informed.
After the settlement was announced that day, a furious Subramanian said Live Nation’s handling of the situation “shows absolute disrespect for the court, for the jury, for this entire process, and it is entirely unacceptable.”
“The judge was pretty pissed that they wasted the court’s time,” a live entertainment industry source said.
Representatives for the DOJ and Live Nation did not immediately respond to a request for comment.
The DOJ and a coalition of more than three dozen state AGs had alleged that the 2010 merger between Ticketmaster and Live Nation has stacked the deck against competitors and led to sky-high ticket prices at concerts and sporting events.
Live Nation dodged a potential breakup in the proposed settlement. The term sheet called for Ticketmaster to cap its service fees at its amphitheaters at 15%, open up booking at 13 amphitheaters to competitors and place a four-year limit on exclusivity deals between Ticketmaster and specific venues.
Live Nation will also create a $280 million fund to settle state claims.
Critics allege that the settlement was a sweetheart deal that won’t result in lower prices for concertgoers.
“A slap on the wrist is even too strong of a characterization of this agreement,” the live entertainment industry source said. “It’s more like light tickle on the wrist.”
“Without the breakup of Live Nation and Ticketmaster, there isn’t going to be a meaningful difference in ticket prices,” the source added.
Elsewhere, Brian Berry, executive director of the Ticket Policy Forum, said “it seems the DOJ has capitulated” and that the “only winners are Live Nation shareholders and the company’s lobbyists.”
“After a strong first week at trial, it appears the DOJ has once again failed to protect live event fans and market competition with a settlement that will equate to less than a speed bump for the Live Nation-Ticketmaster monopoly,” Berry said.
Rumors about a potential settlement swirled for weeks before the trial. Those rumblings accelerated after DOJ antitrust chief Gail Slater resigned from her post last month amid disputes over how the agency should handle major cases.
Live Nation tapped former Trump adviser Kellyanne Conway to assist negotiations on a settlement. Meanwhile, Trump ally Ric Grenell was added last year to Live Nation’s board of directors.
In a statement on Monday, Rapino said the settlement “marks a major step in improving the concert experience for artists and fans throughout the United States.”
