SeatGeek was close to a deal that would take its ticketing business to the next level. The company was in talks with the Dallas Cowboys, aiming to handle first-party sales at their stadium. But there was one key point: “The Concert Problem.” The team feared that if it took down SeatGeek’s rival Ticketmaster, Ticketmaster’s parent company Live Nation could pull concerts from the team’s stadiums, hurting an important revenue stream.
That’s how Jack Grotzinger, CEO of SetGeek, remembers things. The deal was ultimately successful, leading to a primary ticketing partnership that was announced in 2018. But for a while, Grotzinger recalled as he stood before a Manhattan jury Friday, “the issue of the concert was something we couldn’t control, and it seemed like it might stop the whole process.”
During the first days of the government’s six-week antitrust trial against Live Nation-Ticketmaster, retaliation — an allegation that Live Nation vehemently denies — has been a central theme. Many in the industry believed that Live Nation’s promoters would block concerts from venues that did not use Ticketmaster, several witnesses testified. The real or perceived threat created such fear, witnesses alleged, that some major venues would refuse to switch to what they see as a better ticketing product, lest they incur the wrath of Live Nation. With a settlement reportedly imminent, there could be changes — but not the complete breakup that the government put on the table during the trial. In the meantime, the dozens of individual states involved in the case will need to decide whether to proceed.
SeatGeek didn’t necessarily know that Live Nation would respond. But the fear of venues losing their concerts was costing SeatGeek business, Groetzinger said. With the Cowboys’ deal going south, a SeatGeek employee suggested a bold idea: What if they offered liability insurance? The company can promise venues that, if Live Nation passes them on for concerts, it will pay enough to cover that revenue.
The idea made Grotzinger “really uncomfortable,” he testified. SeatGeek has to allocate a large amount of money for insurance. Even if they never have to pay, Grotzinger said, the company would need to pay those funds elsewhere in the contract — in his words, “the location makes the deal worse.” But SeatGeek’s board eventually agreed to the idea, and it took over the Cowboys’ deal. From that point on, offering retaliatory insurance became an option of last resort. “It’s really scary, but if we feel we have no choice, we’ll do it,” he said.
So far, two venues that have signed up for retaliation insurance have claimed the provision was triggered — one being the Cowboys. In 2022, the team told SeatGeek that they believe Live Nation walked over their stadium for a Coldplay concert. For the benefit of the relationship with SitGeek, Grotzinger said, the Cowboys did not collect on the claim at the time.
Groetzinger said the risks are even more pronounced with smaller arenas, where artists and promoters have more options to choose from.
Earlier in the week, the jury heard from two witnesses who were directly responsible for taking tickets into the arenas: John Abbamondi, the former CEO of Barclays Center owner BSE Global, and Mitch Helgerson, chief revenue officer of the Minnesota Wild hockey team. The Wild considered SeatGeek’s offer, but Live Nation-Ticketmaster reportedly threatened to move their shows to the Target Center in nearby Minneapolis, an “almost catastrophic” (in Helgerson’s words) outcome that even retaliation insurance wouldn’t cover. Negotiations with Barclays improved, and the set-piece signed a seven-year contract in 2021. But soon, everything fell apart.
Seth Geek made significant sacrifices to land Barclays. BSE calculated that the arena could lose $20 million if Live Nation abandoned the arena, a number of seat geeks couldn’t afford to fully cover, so it offered the next best thing: $20 million in equity in its business. Groetzinger said the deal would be “one of the least profitable deals we’ve ever signed.” “But we thought it was worth doing because it’s going to be such a watershed moment for us.” In fact, a year after SeatGeek signed the deal, he managed to add three NFL stadiums and two arenas to his client list.
But it quickly became clear that the number of Barclays concerts “was much lower than we expected,” Grotzinger recalled. Abbamondi’s contract was not renewed, and Maidan “started complaining about things that either didn’t make sense or were really small.” There were some legitimate issues with SitGeek’s platform that he worked to fix, but others were data entry issues created by BSE’s own box office staff, which Abbamondi also testified to. Groetzinger felt that Barclays was making excuses to go back to Ticketmaster because it was nervous about losing the Live Nation shows. The contract expired after 18 months. On cross-examination, Live Nation’s attorneys suggested SeatGeek’s incompetence, not Live Nation’s alleged retaliation, caused the contract to break.
Groetzinger said the more seats the sitcoms failed to win or lost, the harder it became to get new ones. SeatGeek has signed a total of five arenas for its core ticketing business. “A field worries about being abandoned when they feel like they’re on an island,” Grotzinger said.
It’s bigger than Ticketmaster.
The issue is more than ticket sales. The government also alleged that Live Nation monopolized the market for large amphitheaters in the U.S. — outdoor venues popular with touring artists during the summer months. The company reportedly conditions access to these spots on using its own promoters, making it nearly impossible for others to enter.
The jury also began hearing about the issue last week, including Seth Hurwitz, owner of It’s My Party (IMP), which operates major venues around Washington, D.C., such as the 9:30 Club and the non-Live Nation-operated amphitheater Merryweather Post Pavilion. When it comes to amps, it’s basically “me and the living nation”.
Another witness, former Irvine, CA City Manager Oliver Chee, described Live Nation’s aggressive tactics as the city considered alternative operators for the new amp it was building. A lobbyist for the company reportedly told Che that “LiveNation would circle the bus” if the deal was rejected.
Live Nation has tried to prove that many of the practices for which it has come under fire — such as signing exclusive deals with venues and doing vertically integrated business — are things its competitors also do. He tried to cast doubt on the alleged risks, for example, suggesting that he was simply describing the risks objectively.
If no settlement is announced today, the jury is likely to continue hearing this week from AEG, a similar concert promotions and ticketing business, as well as concert fans and some company executives. Finally, they are expected to hear from its CEO and artists Kid Rock and Ben Levitt of Mumford & Sons. If the government settles, at least some states can move forward — and the court will decide the fate of the largest live event empire in America.
