Live Nation Settlement Announcement
The giant of live events, Live Nation Entertainment, has agreed to pay $20 million to settle a lawsuit that alleged the company misled investors about its competitive practices and regulatory risks.
The proposed settlement was submitted to the US District Court in the Central District of California on Friday (March 21). This comes as Live Nation continues to face an antitrust lawsuit filed by the US Department of Justice and multiple state attorneys general.
Shareholders filed the lawsuit against the company in August 2023, asserting that Live Nation violated securities laws by failing to disclose crucial information about ongoing antitrust investigations and regulatory challenges. The lawsuit particularly targets the company’s alleged anti-competitive behavior, which includes claims of retaliatory actions against venues that opted not to use Ticketmaster.
“Live Nation engaged in anti-competitive behavior, which became a significant source of its business growth, including improperly tying their concerts to promote events through their Ticketmaster services, retaliating against venues that refused to sell tickets, and restricting consumers’ ability to resell tickets using competing secondary ticket services,” the lawyers stated.
“Live Nation did not cooperate with investigations by the US Department of Justice and Senate subcommittees, resulting in potential regulatory scrutiny, fines, and damage to their reputation,” according to the complaint.
Impact on Shareholder Confidence
The lawsuit highlighted several incidents that allegedly affected Live Nation’s stock price, including a New York Times report in November 2022 regarding the Department of Justice’s antitrust probe, which caused a 7.8% drop in stock value; a February 2023 NPR report on the Senate subcommittee investigation leading to a 10.1% decrease; and further articles from Politico in July 2023 and CNBC in November 2023, further eroding investor confidence, according to the lawsuit.
In May 2024, the Department of Justice filed a lawsuit against Live Nation, confirming several violations of antitrust laws, including allegations of “anti-competitive behavior.” This news, according to the plaintiffs, caused a 7.8% drop in the company’s stock price at that time.
Live Nation’s shares increased by 3% on March 24 during NYSE trading. However, the shares have decreased by 1.7% year-to-date.
In the court filing submitted by the shareholder group, they stated that the $20 million settlement amount is “reasonable and requires preliminary approval,” following what the lawyers described as “lengthy negotiations and hard-fought trials.” This settlement is calculated at about 3% of the maximum damages of $743 million sought by the plaintiffs.
The attorneys will seek a fee of up to 33.3% of the settlement, approximately $6.7 million.
In the ongoing case against the Department of Justice and 40 state attorneys general, a federal judge recently denied Live Nation’s and Ticketmaster’s request to dismiss two key aspects of the case.
District Judge of the United States Arun Subramanyan dismissed Live Nation’s arguments against the “binding” prosecutors’ claims, which accuse the company of coercing artists to use their concert promotion services if they desired to perform at venues owned by the company.
The judge also upheld the states’ authority to seek damages on behalf of consumers, as noted in the court document dated March 14.
Despite current legal troubles, Live Nation reported a 3% year increase in revenue for 2024 at $23.16 billion, not adjusted for currency fluctuations. Adjusted operating income rose 14% year to $2.15 billion.
Approximately 151 million people attended 55,000 Live Nation events in 2024, representing an increase of 4% year. The company reported that 60 million fans visited performances at venues controlled by Live Nation, achieving double-digit growth compared to the previous year.
