The suit, filed in the US District Court for the Central District of California on Nov. 10, comes on the heels of a proposed class action filed in August against the company and certain executives, highlighting the same stock drops that occurred after the DOJ announced its investigation..
The shareholder derivative suit alleges that the directors and CEO Michael Rapinomisled investors ahead of the DOJ investigation, omitting or misrepresenting details about Live Nation’s anticompetitive conduct. This alleged conduct included entering into extended restrictive contracts with artists and venues, charging high fees for ticketing services, and retaliating against venues for working with alternative promoters or ticketing services, according to the complaint.
In its 2010 merger with Ticketmaster, Live Nation agreed to a Justice Department consent decree that it would refrain from conditioning Live Nation concerts at a given venue on that venue’s use of the Ticketmaster platform. The company is subject to an automatic $1 million fine for each violation under the consent decree, which is set to expire in December 2025, the complaint says.
Even so, on Nov. 18, a New York Times article revealed that the DOJ had launched an antitrust investigation into Ticketmaster and Live Nation after the ticketing platform crashed during a record-breaking presale for Taylor Swift tickets. Live Nation’s share price declined nearly 8% to close at $66.21 on Nov. 18, 2022, according to the complaint.
In February 2023, National Public Radio reported that a Senate antitrust committee had called upon the DOJ to continue its investigation into Live Nation. That day, the company’s stock fell by more than 10% to close at $68.78 on Feb. 24, according to the complaint. That was the stocks biggest drop in nearly a year, according to data compiled by Bloomberg.
Then in July, Politico reported the Department of Justice was poised to file an antitrust lawsuit against Live Nation by the end of the year. The company’s share price fell by nearly 8% again to close at $89.33 on July 28, according to the complaint.
The proposed class action suit against Live Nation and executives is still pending in the same Central District of California court.
Shareholder Mark Steven Zwick seeks to recover damages and pre-judgment interest on behalf of Live Nation, for its alleged violations of the Securities Exchange Act between Feb. 23, 2022 and July 28, 2023. He also seeks to recover legal fees, the complaint says.
Live Nation didn’t immediately respond to a request for comment.
Wolf Haldenstein Adler Freeman & Herz LLP represent the plaintiff and the proposed class.
The case is Zwick v. Live Nation Entertainment Inc., C.D. Cal., No. 2:23-cv-09520, complaint filed 11/13/23.
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