Live events giant Live Nation Entertainment has agreed to pay $20 million to settle a class action lawsuit alleging the company misled investors about its competitive practices and regulatory risks.
The proposed settlement was filed in the US District Court for the Central District of California on Friday (March 21). It comes as Live Nation continues to face an antitrust lawsuit brought by the US Department of Justice and numerous state attorneys general.
Shareholders sued the company in August 2023, claiming Live Nation breached securities laws by failing to disclose critical information about potential antitrust investigations and regulatory challenges. The lawsuit particularly targeted the company’s alleged anti-competitive behaviors, including claims of retaliatory actions against venues that did not use Ticketmaster.
“Live Nation engaged in anticompetitive conduct, which was the true source of its business growth, including improperly tying its underpriced concert promotion services to its Ticketmaster services, retaliating against venues that spurned Ticketmaster, and restricting consumers’ ability to resell tickets using competing secondary ticketing services,” the shareholders’ lawyers said.
“Live Nation was not cooperating with investigations by the US Department of Justice and a Senate subcommittee; and as a result, Live Nation was likely to incur regulatory scrutiny and face fines, penalties, and reputational harm,” according to the lawsuit.
The lawsuit highlighted several developments that allegedly impacted Live Nation’s stock price including a New York Times report in November 2022 about a DOJ antitrust investigation that caused its stock to drop 7.8%; a February 2023 NPR report about a Senate subcommittee investigation that led to a 10.1% stock decline; and subsequent reports from Politico in July 2023 and CNBC in November 2023 that further dampened investor confidence, the lawsuit said.
In May 2024, the DOJ sued Live Nation alleging several violations of antitrust laws including claims of “anticompetitive conduct.” This development, according to the plaintiffs, sent Live Nation’s stock price falling 7.8% at the time.
Shares of Live Nation rose over 3% on Monday (March 24) in NYSE trading. However, the stock was down 1.7% year-to-date.
In the Friday court filing, the shareholders’ legal team said the $20 million settlement amount is “reasonable and warrants preliminary approval” after what the lawyers described as “hard-fought litigation and arm’s length negotiations.” It recovers about 3% of the maximum estimated damages of $743 million under the plaintiffs’ “best-case scenario.”
The lawyers will apply for attorneys’ fees of up to 33.3% of the settlement, or about $6.7 million.
In the ongoing lawsuit versus the DOJ and 40 state and district attorneys general, a federal judge recently denied Live Nation and Ticketmaster’s motion to dismiss two major parts of the lawsuit.
US District Judge Arun Subramanian rejected Live Nation’s arguments against prosecutors’ “tying” claim, which accuses the company of forcing artists to use its concert promotion services if they want to perform at Live Nation-owned venues.
The judge also upheld the states’ standing to seek damages on behalf of consumers, according to a court document on March 14.
Despite the ongoing challenges, Live Nation reported a 3% YoY jump in revenue in 2024 to $23.16 billion, not adjusted for currency fluctuations. Adjusted operating income grew 14% YoY to $2.15 billion.
Around 151 million people attended nearly 55,000 Live Nation events in 2024, up 4% YoY. The company said 60 million fans attended shows in venues operated by Venue Nation, its venue operating division, up by double digits from the previous calendar year.
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