Live Nation is not a concert promoting monopoly – Fourth Circuit
It’s My Party, Inc. v. Live Nation. It’s My Party (IMP) claimed that Live Nation violated the Sherman Antitrust Act by engaging in monopolization, tying arrangements, and exclusive dealing in the music concert industry. The district court granted summary judgment for Live Nation, and the Fourth Circuit affirmed.
Live Nation is an enormous concert promoter. They also own Ticketmaster and a number of concert venues. IMP does roughly the same thing, but operates only a couple of venues in the Washington-Baltimore area, and does not own any ticket sales company. The companies compete to get the best artists into their venues in the area – a battle IMP is apparently losing to Live Nation.
Live Nation is able to book artists at venues it controls nationwide. IMP has only the few venues in a limited geographic area, so artists have to work with other companies for other parts of their tours.
The opinion carves out two different markets: promotion and venue operation. Both target performers, but for different services. In the promotion market, the opinion reasons, local promoters are more familiar with local media and markets. Most concert promotion is local, so the Court concludes they have the advantage (the court gives little attention to internet marketing, which IMP contended eliminated the advantage).
In the venue market, IMP strained to narrow the market to show only two competitors. They claimed the market for amphitheaters is different than for clubs, the market for outdoor, seasonal amphitheaters is different than year-round, and that the market for large, 8,000+ seat amphitheaters is different than smaller ones. This left only Live Nation and IMP in the Washington-Baltimore market.
IMP’s approach is akin to defining a market to include tennis players who have won more than three Olympic gold medals and finding that only Venus and Serena Williams fit the bill.
The court rejected the definition, writing that a litigant can’t “gerrymander its way to an antitrust victory.”
Because of the inability to define a competitive market, the other claims were “left in a weakened state.”
The tying claim failed because there was no basis in the record for concluding artists were coerced into performances at the Live Nation venue because they used Live Nation’s promotion services. Rather, it was more of a value added choice. In fact, 14% of the time, Live Nation’s promoted artists chose to perform at IMP’s venue. Likewise, the fact that artists used Live Nation’s venues in other markets did not coerce them into using the Live Nation venue in the market. 26% of artists using a Live Nation venue in another locality chose the IMP venue.
The Court also rejected the more general arguments that Live Nation simply controls too much of the market power. The opinion espouses the value that Live Nation’s large network can bring to artists, eventually throwing IMP a bit of a bone:
Just as big is not necessarily bad, small is not necessarily weak. Even though national firms undoubtedly have an edge over smaller competitors and David may not triumph over Goliath everywhere, he can certainly hone his home court advantage. While LN was busily spreading its operations all over the country, IMP could have focused instead on branding itself as a uniquely attractive local outfit, striving to know the Washington-Baltimore audience better than any other promoter and deepening its relationships with local clubs, businesses, and media. As it is, IMP has in fact enjoyed much success at its Merriweather venue, hosting scores of major artists and doubling its revenue from $11.8 million in 2006 to $22.5 million in 2012.