Shareholders in Live Nation Entertainment are being invited to join a class action lawsuit filed earlier this month accusing the ticketing company of failing to disclose anticompetitive company operations.
New York-based firm Bernstein Liebhard’s lawsuit — filed on August 4 in California Federal Court — alleges that Live Nation “failed to disclose to investors that Live Nation engaged in anticompetitive conduct, including charging high fees and extended contracts with talent, and retaliated against venues,” and that the company also didn’t reveal that the company “was reasonably likely to incur regulatory scrutiny and face fines, penalties, and reputational harm.”
Brian Donley, who bought five shares in Live Nation stock on July 25th according to the complaint, is named as the plaintiff in the case. Along with Live Nation Entertainment, both Live Nation’s CEO Michael Rapino and president and CFO Joe Berchtold were named as defendants.
The suit referenced a 7.8 percent stock drop for Live Nation to $66.21 per share after the New York Times first reported last November that the DOJ was investigating the company, and another 7.8 percent drop to $89.33 per share on July 28th after Politico reported that the investigation could result in a lawsuit by the end of the year.
As the lawsuit alleges, because Live Nation didn’t properly disclose the regulatory concerns, “Plaintiff and other Class members have suffered significant losses and damages.”
According to The Hollywood Reporter, three other law firms sent out similar notices in light of reports that the the Justice Department’s could sue.
The suit claims that Live Nation not only engaged in anticompetitive behavior, but that its executives knowingly misled investors, providing little evidence on the latter claim beyond the allegation. Regarding anticompetitive behavior itself, Live Nation has consistently denied various claims that it functions as a monopoly.
As The Hollywood Reporter notes, the class action would need to identify substantive claims showing that Live Nation engaged in the anticompetitive practices, and that the executives in fact knew the statements were misleading and said them anyways.
Live Nation declined to comment.
The class action suit comes at a time of renewed scrutiny for Ticketmaster and Live Nation. Outside of the DOJ investigation, Swifties reignited the conversation last year after a disastrous rollout for tickets for her ongoing Eras tour. (While news of the DOJ investigation broke after the Swift debacle, the Times notes that the probe predated the sale.) In January, Live Nation faced heavy scrutiny from a Senate judiciary panel regarding competition in the ticketing industry, with several senators questioning if Live Nation and Ticketmaster’s 2009 merger should’ve been allowed.
Aside from the DOJ’s current investigation, Live Nation and the Justice Department settled in 2019 over allegations that Live Nation violated a consent decree which was to prevent the company from coercing venues to use Ticketmaster as its ticketing provider as a condition for hosting Live Nation shows, and retaliating if they didn’t. The consent decree was amended and expanded until 2025.
While Live Nation settled, it denied that the incidents reflected how it does business across the company. “We strongly disagree with the DOJ’s allegations in the filing and the conclusions they seek to draw from six isolated episodes among some 5,000 ticketing deals negotiated during the life of the consent decree,” the company said at the time. “Nevertheless, in keeping with our decision to settle, our focus is now on bringing this matter to its conclusion and continuing to deliver the best live event experiences to fans everywhere.”
The suit references several claims Live Nation gave both in news statements and various financial documents that the suit alleges were false or misleading, including a 2022 statement regarding the settlement in which Live Nation said “there never has been and is not now any evidence of systemic violations of the Consent Decree.”
The suit referenced other statements from Live Nation regarding antitrust including one in which the company said it “does not engage in behaviors that could justify antitrust litigation, let alone orders that would require it to alter fundamental business practices.” The suit also pointed to Live Nation’s comments on a Canada class action suit that accused the company of engaging in practices intended to encourage the resale of tickets on secondary ticket exchanges at elevated prices.” Live Nation said the claims had no merit.