Benzinga - by Aaron Bry, Benzinga Editor.
What Happened: Live Nation Entertainment Inc (NYSE:LYV) CFO and President, Joe Berchtold, addressed the impending DOJ lawsuit on Tuesday, fighting the notion that Live Nation and Ticket Master should be forced to split up. Berchtold revealed that the company is gearing up to initiate talks with the DOJ’s senior division leadership.
According to The Hollywood Reporter, Berchtold voiced confidence that a split between Live Nation and Ticketmaster, which merged in 2010, would not be the lawsuit’s outcome.
"Based on the issues we know about, we don't believe a breakup of Live Nation and Ticketmaster would be a legally permissible remedy," Berchtold said. He added that any lawsuit would typically follow these talks.
The Context: On April 15, The Wall Street Journal reported that the DOJ was gearing up to file an antitrust lawsuit against Live Nation as early as May. The allegations reportedly revolve around how Live Nation has used its dominance to undermine competition for ticketing live events.
Despite the looming legal issues, Live Nation posted first quarter revenue of $3.8 billion, a 21 percent year-over-year increase, driven by sustained fan demand. The company is also facing a proposed class action lawsuit from investors who allege the company has misrepresented the extent of its legal troubles.
Why It Matters: The potential DOJ lawsuit and the proposed class action lawsuit from investors come at a time when Live Nation is experiencing strong concert demand. The company’s Q1 revenue growth is a testament to this demand. However, the lawsuits could potentially impact the company’s operations and reputation.
The DOJ lawsuit, in particular, could have far-reaching implications for the live music industry, especially if it results in a breakup of Live Nation and Ticketmaster. This could alter the dynamics of the ticketing market for live events.
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