Growing up in the 1990s, like millions of teenage boys, I had a crush on supermodel Cindy Crawford. Not only did it seem like she was in every Sports Illustrated Swimsuit Issue, but she was also one of the most prominent faces in entertainment. Today, fulfilling the dream of becoming Mr. Cindy Crawford would require breaking up her longtime marriage and the family that she and her husband Rande Gerber have built over several decades.
Such a breakup would not be much different from what the U.S. Department of Justice is seeking in its effort to declare the event ticket dealer and venue operator Live Nation Entertainment a monopoly, and have it judicially torn apart more than a decade after its creation.
If a forlorn Cindy Crawford suitor suggested such a thing, the reaction would be deep belly laughs and humorous memes. Yet, the effort by the DOJ is unfortunately being taken seriously by the courts, media, and more than a few fans who buy into the erroneous belief that one company is enthusiastically preventing them from enjoying packed venues full of sweaty, loud, and often inebriated fellow fans.
But a look at the numbers show Live Nation’s antagonists couldn’t be more wrong. In its February, 2024 annual report, the company reported serving 145 million fans at 50,000 events. The result was a net income of $734.3 million. Breaking that down per fan, the company earned a whopping $5.06 for each individual it “victimized” by providing them access to the entertainment they seek. On an event basis, the 50,000 events Live Nation held each generated a profit for the company of just $14,686.
Think about that for a moment: if the DOJ (and Federal Trade Commission for that matter) had their way, Live Nation would be replaced by a myriad of smaller ticket sellers and venue operators leading to lower prices and higher levels of happiness. Yet the numbers tell a different story. If a supposed monopolist can only earn $5.06 per fan, or $14,686 per event, do you really expect a raft of new entrants to pile into this space?
After all, in order to earn $5.06 per fan, the individual concert promoters—and companies small enough for the Department of Justice not to get angry at them—will have to build relationships with venue owners, develop (or purchase) ticketing systems that offer some level of security to prevent counterfeiting, get to know the people who manage talent like Taylor Swift and Katy Perry, obtain sufficient insurance to cover everything from drunk fans to unforeseen events, and find plenty of investors willing to fund these risks.
That is quite a tall order, and let’s not forget that the DOJ wants you to believe that all of this can take place while ticket prices decline. They posit that insurance providers—known for their omnipresent willingness to always offer inexpensive premiums—will eagerly line up to underwrite events by smaller enterprises with fewer resources. The DOJ also is certain that Jay-Z’s management team immediately take calls from people they’ve never met, in order to add dates to his tour.
Live Nation not only exists because of the decades invested building these relationships and the hard work of growing the significant capital base to support them, but also because the way we consume our entertainment has changed. Decades ago, we were limited to in-person concerts, grainy television images, and static-filled car radios in order to hear our favorite artists. Today, our mobile phones, tablets, and big screen televisions offer experiences that our parents and grandparents could only have dreamt about. What’s more, those same devices have made it easier for independent artists to become known and build direct relationships with their audience. One need look no further than bars and small event venues to see the crowds who seek out such entertainers.
Just like a breakup of Cindy Crawford’s marriage wouldn’t result in my becoming the luckiest man in the world, a breakup of Live Nation won’t lead to $10 concert tickets and Taylor Swift singing directly to you. That’s why the loudest chorus of boos should be reserved for the Department of Justice and government agencies like the Federal Trade Commission who actions will actually lead to fewer concerts, higher ticket prices, and less of a connection with our favorite artists.
