The coronavirus (COVID-19) pandemic has placed unprecedented stress on businesses offering live entertainment, raising concerns about the continued ability of many independent concert and live performance venues to stay in business

Klobuchar, Blumenthal, Booker call on the Justice Department to monitor the live performance marketplace to ensure that small and independent venues will have the chance to compete on a level playing field once this crisis has ended

WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, and Senators Richard Blumenthal (D-CT) and Cory Booker (D-NJ) sent a letter to Assistant Attorney General for Antitrust Makan Delrahim, urging the Department of Justice (DOJ) to ensure that a vibrant and competitive live performance marketplace will exist after the coronavirus pandemic. Discussions surrounding the recent extension of the Ticketmaster/Live Nation consent decree exposed serious preexisting concerns about the state of competition in the live entertainment industry, which have been exacerbated by the severe financial stress caused by the current healthcare crisis. 

“As a result of the pandemic, live performance venues were among the first to close. And given the risks posed by large group gatherings, they will likely be among the last to reopen. This has caused event spaces across the country to close their doors, with little prospect of reopening in the near future and no alternative sources of income. We recognize that independent industry participants may face additional challenges in weathering this crisis and are concerned that Live Nation Entertainment, a company that already dominates the live entertainment industry, will emerge even more powerful once it is over,” the senators wrote.          

“When Americans are ready to go back to stadiums, theaters, and concert halls, they deserve a competitive marketplace that offers value, choice, and a variety of entertainment experiences. Accordingly, we urge you to closely monitor these markets during and after this pandemic to ensure that all industry participants and consumers benefit from free and fair competition.”

In her role as Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Klobuchar has championed efforts to protect consumers, promote competition, and fight consolidation in major industrial sectors, including the telecommunications, technology, agriculture, and pharmaceutical sectors.

In August 2019, Klobuchar and Senator Richard Blumenthal (D-CT) urged the Justice Department to conduct an investigation into the state of competition in the ticketing marketplace given concerns that the company was ignoring a2010 consent decree on their anti-competitive practices.

Earlier this month, Klobuchar and 14 colleagues sent a letter to Assistant Attorney General for Antitrust Makan Delrahim and Federal Trade Commission (FTC) Chairman Joseph Simons, urging the Department of Justice and the FTC to be vigilant in enforcing the antitrust laws and protecting consumers during and after the coronavirus (COVID-19) pandemic. 

In March, Klobuchar introduced new legislation to deter anticompetitive abuses that distort the competitive process and harm consumers, innovation, and new business formation. The Anticompetitive Exclusionary Conduct Prevention Act prohibits anticompetitive exclusionary conduct that risks harm to the competitive process. It also makes reforms to improve antitrust enforcement across the board. The bill was cosponsored by Senators Richard Blumenthal (D-CT) and Cory Booker (D-NJ).

In August, Klobuchar introduced the Monopolization Deterrence Act to crack down on monopolies that violate antitrust law. The legislation would give the DOJ and FTC the authority to seek civil penalties for monopolization offenses under the antitrust laws, a power they currently do not have.

The full text of the letter can be found HERE and below:

Dear Assistant Attorney General Delrahim:

In light of the devastating effect that the coronavirus (COVID-19) pandemic is having on the live performance industry, we write to urge the Antitrust Division to closely monitor these markets during and after the pandemic to help ensure that a vibrant and competitive live performance marketplace will reemerge once this crisis is behind us.     

Due to the nature of COVID-19 and how it is transmitted from person to person, the live event industry has been hit as hard as any. Gathering with family and friends as part of a crowd to enjoy live music and other forms of entertainment is an important part of the fabric of American life. But as a result of the pandemic, live performance venues were among the first to close. And given the risks posed by large group gatherings, they will likely be among the last to reopen.

This has caused event spaces across the country to close their doors, with little prospect of reopening in the near future and no alternative sources of income. We recognize that independent industry participants may face additional challenges in weathering this crisis and are concerned that Live Nation Entertainment, a company that already dominates the live entertainment industry, will emerge even more powerful once it is over.    

Given the Antitrust Division’s recent renegotiation and extension of the Ticketmaster/Live Nation consent decree, you are familiar with the many competition concerns that have been raised by industry participants concerning the business practices of Live Nation and its powerful market positions in ticketing, event promotion, sponsorship and advertising, artist management, and performance venue bookings. Even before the pandemic, industry participants had complained about Live Nation leveraging its significant presence up and down the live entertainment value chain to advantage its affiliate businesses. Under these unprecedented circumstances, which are threatening the entire industry, the Antitrust Division must continue to monitor these markets to ensure that Live Nation does not further entrench its market dominance at the expense of smaller rivals. 

For instance, there are hundreds of independent performance venues around the county that have been forced to cease operations. These independent venues, most of which compete with Live Nation venues, do not have the financial resources of a multi-billion dollar company to weather a drastic downturn in revenue. The financial stress of the pandemic could force many to close or sell out to large buyers, if not to Live Nation itself. And for those venues that are able to remain independent through the pandemic, many have raised concerns about Live Nation leveraging its dominance in ticketing, artist management, and other markets to prevent independent venues from booking events after the crisis is over. Apparently, in the midst of this crisis, some investors are also optimistic about Live Nation’s long-term prospects; Saudi Arabia’s sovereign wealth fund reportedly just invested $500 million in the company.

To be sure, the live entertainment industry is not the only part of the economy that has suffered steep declines during this pandemic, which has disrupted Americans’ lives and exacted a horrific and still-climbing death toll. Nor is this industry the only one meriting continued careful antitrust scrutiny during and after this pandemic. But as you know, we have serious concerns about the state of competition in the live entertainment industry, and the severe financial stress on the industry only exacerbates our concerns. When Americans are ready to go back to stadiums, theaters, and concert halls, they deserve a competitive marketplace that offers value, choice, and a variety of entertainment experiences. Accordingly, we urge you to closely monitor these markets during and after this pandemic to ensure that all industry participants and consumers benefit from free and fair competition.  

Thank you for your attention to this matter.

Sincerely,

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