Business19 March, 20263 min read
Live Nation CEO Michael Rapino Testifies as Star Witness in Antitrust Trial
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Rapino testified as star witness defending Live Nation's dominant two-decade market position. Nearly three dozen states argued Live Nation is greedy and abusive to customers.
Trial Overview
Live Nation CEO Michael Rapino served as the star witness in a significant antitrust trial in New York, defending his company's dominant position in the concert industry over the past two decades.
“Michael Rapino, who has led the company since it was formed 21 years ago, testified at the trial resulting from the lawsuit the U.S. Justice Department brought two years ago against Live Nation and its ticketing subsidiary, Ticketmaster.”
Rapino, who has led Live Nation since its formation 21 years ago, testified in response to a lawsuit brought by the U.S. Justice Department two years ago against Live Nation and its ticketing subsidiary, Ticketmaster.
The federal government recently settled its role in the case last week, winning concessions from Live Nation aimed at increasing competition and lowering ticket prices, with six states joining the federal government in settling.
However, 33 states and the District of Columbia continue their court fight against the concert giant.
During his testimony, Rapino expressed pride in how his company had organized what was once a fragmented industry to better serve artists and fans, a model he claimed other companies now try to emulate.
Internal Messages Scandal
A key controversy emerged during Rapino's testimony when he was confronted with internal messages from 2022 where top ticketing employee Ben Baker wrote about 'robbing them blind, baby' regarding fan fees and called some customers 'so stupid.' Baker, who now heads ticketing for Venue Nation, described the messages as 'very immature and unacceptable' when he testified earlier, acknowledging they were 'indefensible' and expressing shock at the amount people would pay.
Rapino called the language 'disgusting' and 'not the way we operate,' claiming he only learned about the messages last week and planned to address them. Live Nation's lawyers characterized the conversation as 'off-the-cuff banter, not policy' between two employees who are personal friends, though Rapino acknowledged his company tends 'to give employees a break' and heard that Baker had apologized.
Exclusivity Deals
The trial revealed extensive details about Live Nation's business practices, particularly regarding exclusivity deals that limit competition in the ticketing market. While Rapino acknowledged that artists wanting to perform at Live Nation-owned venues have no choice but to use the company's promoter, he argued that most exclusive deals originate because wealthy sports team owners insist on having more control and avoiding multiple players.
“He said most exclusive ticketing deals Live Nation signs with big venues such as stadiums and arenas originate because wealthy sports team owners insist upon it so they have more control and don't have to deal with multiple players. 'I don't tell the billionaire what to do with his venue.'”
When confronted with email evidence suggesting Live Nation threatens to reduce concerts at venues that don't use Ticketmaster, Rapino brushed off the concerns, stating that in 15 years there have been only 'a few of those wild emails' that never actually materialized. He maintained that his company doesn't dictate terms to venue owners, saying 'I don't tell the billionaire what to do with his venue.'
Profit Margins
Rapino provided insight into Live Nation's profit margins and the competitive nature of the concert industry, painting a picture of narrow profits despite the company's dominant market position. He portrayed the concert promotion and ticketing industry as highly competitive with such slim profit margins that Wall Street was skeptical the public company could produce steady growth and profits.
Rapino revealed that 40 amphitheaters the company owns or controls would lose $150 million annually if Live Nation couldn't profit from the sale of food and beverages, parking and other amenity products such as lawn chairs. This came as he was questioned about the 20% fees Ticketmaster charges for secondary market ticket sales, with Rapino retorting that he's 'the only one that says I want to cap secondary' which he claimed goes against the motive prosecutors were trying to establish.
Taylor Swift Incident
The testimony also addressed the infamous 2022 Taylor Swift ticketing system failure, which Rapino attributed to a cyberattack rather than the system overload initially claimed.
“Kessler confronted him with a Ticketmaster executive's explanation on the day of the company's infamously problem-plagued effort to sell Taylor Swift tickets in 2022 that outdated Ticketmaster systems were to blame. 'We thought demand overloaded the system,' Rapino said. 'It turned out not to be true.' Instead, he said, a cyberattack was to blame.”
When confronted with a Ticketmaster executive's explanation that outdated systems were to blame, Rapino stated, 'We thought demand overloaded the system. It turned out not to be true.' Instead, he claimed a cyberattack was responsible for the disastrous ticket sale that left many fans frustrated.
Throughout his testimony, Rapino remained composed and relaxed, parsing his answers and pushing back at repeated questions about rising ticket fees, exclusivity deals, and Live Nation's profit margins.
He also addressed a 2016 email he sent admitting 'Our fees are too high we can't defend them,' though he claimed not to remember the specific email or what it was referring to.