GoKawiilAfter a chaotic week following the Justice Department’s mid-trial settlement with Live Nation-Ticketmaster, the antitrust trial picked back up surprisingly smoothly on Monday — this time, with dozens of states leading the case.
This isn’t the outcome the states originally wanted. Out of concerns about being able to effectively take over the case and fear that the jury would be prejudiced by the shakeup, they requested a mistrial, which would have restarted the court battle at an unknown future date. But an irritated Judge Arun Subramanian seemed likely to deny the request, and once the states figured out how to retain the DOJ’s expert witness and were able to quickly hire up, they withdrew their mistrial motion. After the new faces were introduced, the trial restarted from roughly where it left off more than a week ago, with testimony that included how Live Nation deployed its “velvet hammer” against rivals.
Subramanian welcomed the jurors back from their “spring break” and asked if they had read or encountered any news about the case when they were out, which is forbidden by the jury instructions. They either shook their heads or remained silent. He reminded the jurors that the US had resolved its claims, as had a handful of states, but the rest were proceeding to trial. Jurors shouldn’t make any inferences from the fact those parties are no longer in the case, he said.
With the DOJ out of the picture, the lawyers who questioned early witnesses were gone, replaced by a new team co-led by Jonathan Hatch, an attorney from the New York AG’s office, and Jeffrey Kessler of Winston & Strawn, who represented college athletes in the landmark Supreme Court antitrust case against the NCAA over compensation.
The states’ attorneys picked up questioning of Jay Marciano, the COO of AEG, a competitor to Live Nation on multiple fronts. While Hatch refreshed jurors on parts of Marciano’s prior testimony, it was otherwise a fairly standard examination. Marciano testified about ticketing models he prefers in Europe, where multiple ticketing services often work at a venue, unlike the norm in the US where venues tend to accept exclusive ticketing contracts, often from Ticketmaster.
On cross examination, Marciano spoke to an incident the jury heard about early in the trial: a call between the Barclays Center’s then-CEO and Live Nation CEO Michael Rapino, who responded to an attempt to abandon Ticketmaster by saying it would be harder for the arena to get concerts with the new UBS Arena nearby. While Barclays interpreted this as a threat to protect Ticketmaster, Marciano affirmed that it’s common as a concert promoter to play venues against each other to get more favorable terms, and that the UBS Arena likely would attract artists away from Barclays as the new venue in town.
Live Nation’s president of US concerts, Robert Roux, addressed a separate allegation: that Live Nation uses its broad control over US amphitheaters to maintain its monopoly power, leaving no other real options for artists looking to play large outdoor venues. Through Live Nation’s own business presentations, plaintiff attorney Josh Hafenbrack demonstrated that the company made big strides to gain power over four of the top five amphitheaters in the US by ticket sales between 2016 and now. A 2018 presentation showed a largely highlighted list of the top 100 amps worldwide, with the green highlights representing the 62 Live Nation owned, operated, or exclusively booked venues at the time. Since then, Roux confirmed, the company has added several more on that list.
Live Nation denies it acted anticompetitively, and argues the states ignore other kinds of venues that compete for the same shows. But Roux wrote in a 2015 email that many non-superstar artists come in wanting to play amphitheaters — many of which, evidence shown in court has suggested, are controlled or exclusively booked by Live Nation. He also wrote that in those cases, there was “room for tighter negotiations and deals.”
“Either we are together or we are competitors”
Other emails described how Live Nation thinks about its competition when contemplating otherwise lucrative deals. In a 2018 email exchange, Rapino questioned why Live Nation should give shows to a promoter in the South it considered acquiring, Red Mountain Entertainment, before it actually owned it. Roux wrote at the time that the message to Red Mountain should be, “Either we are together or we are competitors.” He described the approach as a “velvet hammer.” On the witness stand, Roux said the message wasn’t meant to “antagonize” the promoter, but to be firm and send a clear message. In a separate exchange that mentioned Red Mountain, Roux wrote that Live Nation shouldn’t get “complacent” and “let small guys encroach from the edges.” Roux said the comment was a general one, and not specific to the promoter. Live Nation acquired Red Mountain in 2018.
... continue reading