Photo Credit: Live Nation
A federal judge denies Live Nation’s motion to dismiss a shareholder lawsuit against the concert promotion giant.
Live Nation shareholders are suing the company over a “false and misleading” earnings report that resulted in drops in the concert promoter’s share price. A federal judge has denied Live Nation’s motion to dismiss the lawsuit as of last Friday (February 23). The case will therefore move forward.
Shareholders suing the company argue that Live Nation should have to disclose the ongoing public pressure resulting from federal authorities’ investigation and how much its financial success is actually attributed to its dominant market share in the live performance industry, as opposed to demand for concert tickets.
Brian Donley and Gene Gress sued the company over the drops in its share price from February 2022 to November 2023 that they claim were brought on by Live Nation’s “false and misleading statements and omissions” within its yearly earnings reports. Specifically, the lawsuit refers to the company’s so-called “anticompetitive behavior and cooperation with regulators.”
Attorneys representing the shareholders focused specifically on the language within the company’s shareholder report, arguing that it should have discussed the looming threat posed by a federal antitrust investigation. That said, the lawsuit did not reveal new antitrust allegations or investigations against Live Nation.
Judge Kenly Kiya Kato noted in her 13-page ruling in the shareholders’ favor that she took issue with the way the company described its success, and that she believed Live Nation’s “failure to include specific facts and details about their presence and control of the live entertainment industry” in the report therefore did not paint a complete and accurate picture.
Further, Judge Kato wrote that Live Nation’s claim that its 2022 revenue growth was “a reflection of the quality of the Ticketmaster platform and its continued popularity with clients across the globe” was misleading — because it failed to mention that Ticketmaster controls distribution of tickets for over 70% of major concert venues, and 77% of “the top 100 amphitheaters worldwide.”
The judge also wrote that Ticketmaster’s assertion that its success was based on the superiority of its ticketing systems was not an accurate claim because it omitted the criticisms from competitors who testified in front of the US Senate early last year.
Since Ticketmaster merged with Live Nation in 2010, the company has contended with antitrust complaints stemming from both market share and the company’s size. Politicians including Senators Richard Blumenthal and Amy Klobuchar have levied concerns about the company’s anticompetitive behavior, leading to increased scrutiny in 2019, and again in 2022 when fan demand for Taylor Swift’s Eras Tour presale caused widespread Ticketmaster crashes.
