Featured Image and Antitrust Lawsuit Against Live Nation Entertainment
S&P Global has revised its outlook on Live Nation Entertainment to negative from stable following the antitrust lawsuit filed against them by the U.S. Department of Justice. The rating agency also lowered the company’s management and governance score to moderately negative from neutral. However, it maintained all of its ratings on Live Nation, including its ‘BB-‘ issuer credit rating, which is on the low end of its speculative grade, meaning it “faces major ongoing uncertainties” that could impact its business.
The negative outlook reflects the view that the heightened regulatory scrutiny, financial costs, and potential disruption of Live Nation’s competitive position in the live events industry from the antitrust lawsuit could impair the company’s creditworthiness and potentially result in a lower rating. The agency may lower the rating within the next 12 to 24 months as the potential consequences of the lawsuit become clearer and its impact on the company’s business can be assessed.
The antitrust lawsuit was filed after a long investigation that began with issues surrounding the sale of Taylor Swift concert tickets. The DOJ alleges that Live Nation used its position as a concert promoter, ticket seller, and venue owner to undermine competition. The claims include making venues sign long-term exclusive ticketing contracts, acquiring smaller companies to reduce competition, and retaliating against competitors.
The DOJ is seeking a court order to break up the company, specifically targeting Ticketmaster for divestiture. In response, Live Nation stated that the DOJ will not win this argument in court, arguing that calling Ticketmaster a monopoly ignores the economics of live entertainment and the competition that has eroded Ticketmaster’s market share and profit margin.
The outcome of this antitrust lawsuit will have significant implications for Live Nation Entertainment and the live events industry as a whole. Stay tuned for updates as the case progresses.
