Last week a judge threw out Seth Hurwitz’s anti-trust lawsuit against Live Nation, arguing that the owner of I.M.P. Productions failed to adequately prove that the promoter giant was engaged in unfair competition. Much of Judge J. Frederick Motz’s decision dealt with Hurwitz’s claim that Live Nation used its relationship with artists to steer them into national touring deals (and away from the indies). But one section of the lawsuit dealt with an entirely different topic — the power of food.
According to the 43-page ruling, I.M.P. Productions had planned to call as one of its witnesses Chris Bigelow, a food consultant with more than 40 years of experience in the industry.
Bigelow was expected to testify about the history of food and beverage pricing at concert venues. Bigelow had also agreed to testify on the difference in food pricing at I.M.P.’s Merriweather Post Pavilion in Columbia, Md., versus Jiffy Lube Live in Bristow, Va.
We reached out to Bigelow, but he politely told us he wouldn’t be able to comment (you know what I mean?). That’s not unusual with civil lawsuits — especially since Hurwitz has already said he plans to appeal the summary judgment.
We do know that Live Nation’s lawyers objected to some of the things Bigelow said in his deposition, like that food pricing at Jiffy Lube Live was “well above the market” and “well above competitive industry standards.”
That would support what Hurwitz argued in his original complaint — that Live Nation charges higher than normal food prices in order to offset their large artist guarantees and lopsided tour deals. At one point during his testimony, Bigelow tried to show that food prices at Jiffy Lube Live had risen by about 10.7 percent a year. Attorneys for Live Nation said it was closer to 4.7 percent.
But Bigelow’s larger point was this — food prices at Jiffy Lube Live weren’t being driven by the actual cost of food and goods, which had risen at a much slower rate. Something else was driving the uptick in pricing — like the rising guarantees paid to artists.
In the end, the judge ruled that Bigelow was a credible witness but only his testimony regarding pricing at the two venues or testimony looking at the venues industry as a whole would be allowed. But Bigelow won’t get the chance to testify in open court because the Motz issued a summary judgement and dismissed the case. Why? He cited a litany of reasons, including:
Inadmissibility of witness Einer Elhauge, a Harvard Law professor. The judge said Elhauge’s definition of competition in the DC area was too narrow, benefiting Hurwitz. The region is also home to the Filene Center in Vienna, along with the Verizon Center, Royal Farms Arena, and the Patriot Center. Monopoly in the D.C. market “is much easier to claim if the market is restricted to only Merriweather and (Jiffy Lube Live).”
Problems with arguments about venue interchangeability — Elhauge argued that while most markets are usually home to both indoor and outdoor venues, artists typically have a distinct preference for one or the other. That limits available supply in DC to just Jiffy Lube Live and Merriweather. Hurwitz’s lawyers even deposed Nine Inch Nails’s Trent Reznor, who told lawyers “an arena can feel like the same cement dungeon that you’re in backstage all the time” while sheds “feel like it was meant to play music, it sounds better, the experience is better.” Judge Motz wasn’t impressed and said Reznor admitted later in his deposition that his preference “plays a small factor, but not a huge one.” He also pointed out that Nine Inch Nails only plays sheds for about 35 percent of its shows.
Local versus national — Hurwitz’s legal team claimed that Live Nation’s national dominance pushes prices up for local promoters. They also argued that artists have two choices when booking a tour — strike a national deal with Live Nation or weave together a number of contracts with local guys. The judge found that the reason I.M.P. and other local promoters can’t strike national deals is essentially because they don’t have the capability to operate on a larger scale. “There are no factual disputes on whether the promotion market is national or local because there is no affirmative evidence that artists enter into a national market with numerous promoters that can promote anywhere in the country, outside of Live Nation,” the judge wrote
Lack of evidence of coercion — Hurtwitz’s team introduced several emails from Live Nation’s former head of North American concerts, Jason Garner, as evidence that LN attempted to coerce about a half-dozen artists to play Jiffy Lube instead of Merriweather. The judge said the conversation with Live Nation’s Ted Mankin “only states the obvious — Live Nation tries to book artists at its own venues.” Hurwitz cited two tours — Nine Inch Nails and John Mayer — that he says were coerced into performing at Jiffy Lube Live as part of a past national tour. Motz cited testimony from both bands’ agent, Marc Geiger at WME, who said the acts didn’t feel coerced and were simply offered more to play the Live Nation venues (Nine Inch Nails was paid $150,000 more).
The judge also pointed to the dominance of competitor AEG and ruled that Live Nation does not have monopoly power because the company held less than three-quarters market share and did not have a fixed percentage. He ended the ruling, writing “With this lawsuit, however, plaintiffs are seeking only the profits they would have realised had competition been reduced. This is an injury the antitrust laws do not redress, because they were enacted for the protection of competition, not competitors.”