The Eras Tour’s greatest legacy may be the (possible) breakup of Ticketmaster

Analysis by Allison Morrow, CNN

New York (CNN) — It’s impossible to describe Taylor Swift’s Eras Tour, which had its final show Sunday, without mentioning its economic superlatives: the highest-grossing tour of all time; a force that gave tourism a shot in the arm around the world; a core memory for millions of fans, some of whom flew around the world and shelled out thousands of dollars to attend.

But perhaps one of its more lasting impacts may be the absolute legal hell it unleashed against one of the most despised companies on the planet, Ticketmaster, and its parent company, Live Nation, which could be forced to break up if the Justice Department gets its way.

ICYMI: When Eras ticket sales began in the fall of 2022, the Swifties were beyond ready. It had been six long years since Swift had been on tour (for many young fans, that’s roughly a third or more of their lifetime). They’d survived a pandemic, the kind of trauma that leaves a person isolated and returning over and over to that one part in “Exile” from the “Folklore” album when Taylor and Bon Iver’s voices are singing over each other and building and building until you literally have to pull the car over to cry in a McDonald’s parking lot off I-80. For instance.

But Ticketmaster was decidedly not ready.

The site crashed in the first hour of ticket sales. Fans waited in queues all day, only to have the page freeze or get logged out of their account. Scalpers and bots gobbled up tickets that they then resold for exorbitant prices. The fans’ rage reverberated across the internet and down the halls of Congress. The Senate hauled Live Nation’s president and CFO in for a public scolding. At one point, Democratic Sen. Richard Blumenthal of Connecticut congratulated the executive for the “stunning achievement” of bringing together Republicans and Democrats in “an absolutely unified cause.”

In May, the Justice Department sued Live Nation and called for the company to be broken up. The lawsuit claims the company abused its power as the nation’s biggest concert promoter to stifle competition, force fans to pay more and bully artists and venues into using its services. Live Nation has consistently called the charges “baseless.”

“It is also absurd to claim that Live Nation and Ticketmaster wield monopoly power,” the company states on its website. “The defining feature of a monopolist is monopoly profits derived from monopoly pricing. Live Nation in no way fits the profile.”

Live Nation’s stock (LVY) is up almost 50% this year, thanks to continued high demand for concerts and festivals. But it’s not as if musicians or their fans love Ticketmaster’s product — they just don’t have much other choice. Which means investors feel like they’re betting on a sure thing.

As my friend Paul R. La Monica wrote in Barron’s last month, when the company reported better-than-expected earnings: “Investors love Live Nation about as much as fans of Taylor Swift and Oasis loathe it.”

It’s hard to overstate just how much of the live music experience is directly or indirectly controlled by Live Nation. According to the DOJ lawsuit, Live Nation controls 80% of venues’ primary ticketing for concerts, and it directly owns 265 venues (including 60 of the top 100 amphitheaters).

Once you’re inside, Live Nation isn’t done taking your money, as Sherwood Media’s Amrita Khalid reported last week.

“At Walnut Creek Amphitheatre, in Raleigh, North Carolina, you can buy a gigantic margarita for upwards of $30 from a stand called Bamboo Piranha, which seems like it could be a local business but is actually a trademark owned by Live Nation,” Khalid wrote. “The entertainment giant is an investor in several food and beverage brands sold at its venues, including CVT Soft Serve, plant-based-burger company Everything Legendary, and Owen’s Craft Mixers.”

Of course, what happens next with the DOJ’s lawsuit isn’t clear.

Some analysts expect the Joe Biden era of strict antitrust enforcement to ease, which would partly explain why Live Nation’s stock has shot up 14% since Election Day.

Certainly, Live Nation is hoping for that, too.

“We are hopeful that we’ll see a return to the more traditional antitrust approach, where the agencies have generally tried to find ways to solve problems they see with targeted remedies that minimize government intervention in the marketplace,” Live Nation President and CFO Joe Berchtold said on an earnings call last month. “We’ll obviously be ready to engage as soon as they are.”

But dropping the lawsuit would also deprive incoming President Donald Trump of an easy PR win. Over the summer, some 40 state attorneys general — Republicans and Democrats — signed on to the DOJ’s case, an indication that the government has bipartisan support. And the self-styled populist wing of the Republican Party, which includes Vice President-elect JD Vance, has pretty clearly broken with the traditional right-wing deference to Big Business. (They even dubbed themselves “Khan-servatives,” in a nod to Biden’s top antitrust enforcer, Lina Khan.)

Adam Wolfson, an antitrust lawyer with the firm Quinn Emanuel, said that while it’s possible the DOJ under Trump could drop the case, “it’s pretty unlikely.”

Last week, Trump tapped Gail Slater, an economic adviser for Vance, to lead the DOJ’s antitrust division.

“She’s pretty well-known for being an aggressive enforcer, so the common wisdom that the Trump administration is going to be less aggressive is not necessarily true,” said Wolfson, who is separately leading a class-action lawsuit against Live Nation.

“There’s a lot of bipartisanship about frustration with Live Nation-Ticketmaster,” he added.

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