Live Nation Entertainment Inc., the world’s largest live-entertainment company, is not a monopoly and does not coerce acts to play at its venues, a federal judge has ruled in ending a six-year-long antitrust case.
Bethesda-based It’s My Party Inc., and Columbia-based It’s My Ampitheatre Inc., the companies behind the 9:30 Club and Merriweather Post Pavilion, alleged Live Nation lured acts to its venues by offering them national promotion deals while also threatening to withhold money if musicians played at non-Live Nation venues.
The lawsuit specifically refers to the competition for acts between Merriweather and Nissan Pavilion, the Live Nation-owned, outdoor concert venue in Northern Virginia now known as Jiffy Lube Live.
But Senior U.S. District Court Judge J. Frederick Motz agreed with Live Nation’s arguments that promoting shows is a highly localized operation and that there was no evidence Live Nation pressured acts to perform at its venues.
“The facts of this case establish that an artist seeking a promoter in the Baltimore-D.C. region has at least two choices: plaintiff IMP and defendant Live Nation,” Motz wrote in his ruling, filed Thursday.
Beverly Hills, California-based Live Nation said Motz’s ruling “validates its business approach and practices.”
“We feel vindicated that the court was able to see through the baseless allegations by a rival promoter and recognize that the claims of anti-competitive conduct had no merit,” the company said in a statement issued Friday.
Seth Hurwitz, chairman of I.M.P., operator of Merriweather and co-owner of the 9:30 Club, said in an emailed statement that he plans to appeal the ruling.
“The issue is that we were denied the right to a trial, and we believe that was a mistake,” he said. “The merits of the case are to be argued before a jury, not before that opportunity.”
The underlying lawsuit, filed in March 2009, cited multiple artists and bands, including John Mayer and Nine Inch Nails, that were either coerced to appear at Nissan or at least skip an appearance at Merriweather while touring the region.
But Motz noted Nine Inch Nails agreed to play Nissan in 2006 only after Live Nation agreed to pay the band an additional $150,000, and that same year, Mayer stopped at Nissan after being given increased compensation in the form of 100 percent of ticket sales minus expenses.
“Plaintiffs’ cited evidence demonstrates vigorous competition by Merriweather and Nissan in negotiating with artists to perform at their respective venues,” Motz wrote. “Inducing artists to perform at Nissan by increasing their compensation is akin to the ‘attractive package sale’ that courts have upheld as lawful.”
I.M.P. also took issue with a “co-promotion fee” Live Nation-promoted artists had to pay Live Nation if they wanted to play Merriweather instead of Nissan, calling the fee “coercive.” Nine Inch Nails, for example, could only play Merriweather in 2009 if it gave $100,000 of its earnings from the show toward its overall guaranteed payment from Live Nation.
Live Nation countered the payment is not a punishment but compensates for the profit the company would have made if the band had performed at Nissan. Motz agreed.
“This episode illustrates the opposite of coercion: Nine Inch Nails performed where it wanted — Merriweather — in exchange for offsetting part of the ‘loss’ in Live Nation’s overall revenue from the tour,” he wrote.
Both sides agreed Live Nation’s national concert promotion market share ranged from 60 percent to 66 percent between 2006 and 2010, according to Motz’s opinion. But the judge said “market power” does not prove “monopoly power” and noted the number of concerts at Merriweather increased in that five year span, with the Columbia venue having more concerts than Nissan in four of those years.
“Live Nation is undisputedly large, and utilizes its size and global reach to sign artists to exclusive contracts and steer them to perform in venues that it owns,” he wrote. “With this lawsuit, however, plaintiffs are seeking only ‘the profits they would have realized had competition been reduced.’”
The case is It’s My Party, Inc. et al., v. Live Nation Inc., 1:09-cv-00547-JFM
Live Nation had previously been involved in multidistrict litigation over similar antitrust claims. Those 22 cases were settled and dismissed in June 2012, according to court records.