The Deal – IMP Loses Appeal
IMP’s antitrust case against Live Nation appears to have come to an end after the Fourth Circuit Court upheld a ruling by U.S. District Judge J. Frederick Motz that found LN did not violate the Sherman Act.
“To help prevent antitrust law from being hijacked for anticompetitive ends, we join the district court in sending this tussle between two rivals back to the marketplace from whence it came,” the ruling said.
Attorneys for IMP Chairman Seth Hurwitz had argued that Live Nation had engaged in monopolistic policies through tying arrangements with artists to keep them out of rival venues. The Fourth Circuit upheld Judge Motz’s ruling had failed to adequately define the relevant markets and even criticized IMP, saying that its legal arguments could lead to less efficient tour deals that hurt the consumer.
“We applaud the Fourth Circuit’s ruling,” a statement from Live Nation reads, “and appreciate the panel’s judicious verdict which eradicates claims of anti-competitive conduct by asserting that the ‘purpose of antitrust law is to penalize anticompetitive practices, not competitive success.’ We remain committed to our central business and cultural focus which, as the court validates, is to provide ‘synergies among promotion, venues and ticket sales, all of which serve to bring live music to the public.'”
The IMP suit was first filed in March 2009, claiming that Live Nation was using its vast network of venues to encourage artists to skip IMP’s venues, especially in the D.C./Baltimore market.
I reached out to Hurwitz for comment. We exchanged emails, but ultimately he didn’t send me a statement by publication time.
The Spiel – “Blind to the Basic Economics of Concert Promotion”
In looking at the IMP case, the panel wrote that IMP’s definition of a promoter market was “plainly designed to bolster IMP’s monopolization and tying claims by artificially exaggerating Live Nation’s market power and shrinking the scope of artists’ choices.”
“Unfortunately for plaintiff, its market definitions are blind to the basic economics of concert promotion,” the court said.
“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 said.
The court also ruled that it didn’t believe that LN engaged in coercion and that the tying of two products to gain a market advantage was legal.
“To allow tying doctrine to swell to the point of prohibiting such legitimate means of competition would make antitrust law its own worst enemy,” the Fourth Circuit said.
The Real – Ruling is Bad News for Songkick
The Federal Court’s continued rejection of anti-trust claims against Live Nation shows the difficulty of pursuing the company for Sherman Act violations. That’s bad news for Songkick, who is currently suing Live Nation and its subsidiary Ticketmaster over how tickets are allocated for fan clubs.
Songkick is alleging that TM’s refusal to allocate 10% of tickets to artists who want to use the Songkick platform to sell tickets directly to fans is a violation of Sherman. Songkick is essentially alleging that Ticketmaster has a monopoly on its own tickets.
Last year, StubHub made a similar argument, alleging that TM and the Warriors had an unfair monopoly over Warriors tickets. A judge threw out a lawsuit, arguing that Warriors tickets couldn’t be defined as a relevant market, especially if the monopoly is on the company’s own product.
If a judge doesn’t think packaging artists with venues deals is a violation of Sherman, nor do they believe trying to control tickets to be a violation, it’s highly unlikely that they will find TM’s own primary ticketing inventory to be a relevant market. That’s bad news for Songkick — earlier this year we predicted that the case would ultimately be thrown out.