The federal agreement that allowed concert promoter Live Nation Entertainment, Inc. (NYSE: LYV) to merge with Ticketmaster but required it to operate under certain conditions in its dealings with venues to preserve competition will continue for at least five more years.
The news appeared to please Live Nation investors, with the stock jumping nearly 10% on Thursday.
Can't Coerce Venues
The Justice Department said Thursday it will ask a federal court to keep the conditions in place longer than initially agreed. It will tighten the rules and make them more clear - because, it alleges, the company wasn't fully abiding by the original agreement, which sought to prevent it from retaliating against venues that use other ticket vendors besides Ticketmaster.
Live Nation, the world's largest concert promoter - must now operate under the stricter consent agreement until 2025, the DOJ said. Beverly Hills-based Live Nation confirmed the settlement in its own statement.
The agreement seeks to make clear that Live Nation can't punish concert venues that don't use Ticketmaster, for example by threatening to prevent acts from playing those venues.
'Best Outcome For Our Business'
The original 2010 consent decree that allowed the $890 million merger prohibited such practices, but the Justice Department said the company had found ways to essentially get around the ban.
“Today’s enforcement action including the addition of language on retaliation and conditioning will ensure that American consumers get the benefit of the bargain that the United States and Live Nation agreed to in 2010," Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said in a statement. "Merging parties will be held to their promises and the Department will not tolerate transgressions that hurt the American consumer.”
Live Nation's short statement said simply that the company believes "this is the best outcome for our business, clients and shareholders as we turn our focus to 2020 initiatives."
Live Nation Stock Surges
Live Nation shares closed up 9.19% at $69.83.
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