A new analysis published by the Vanderbilt Policy Accelerator (VPA) reveals that state and local governments own half of Live Nation’s amphitheaters and have been subsidizing Live Nation’s events monopoly to the tune of more than $420 million. The report findings raise questions about the propriety of local governments devoting significant public resources to a company as large and as powerful as Live Nation, particularly as nearly two-thirds of independent music venues struggle to turn a profit.
VPA’s researchers found that almost half the time (in 30 of 64 instances), Live Nation’s large outdoor amphitheaters and stadiums are not owned by Live Nation or even another private actor. Instead, Live Nation is a contractor that governments use to operate buildings that are actually owned by a state or local government. These contracts are often never subject to competitive bidding, resulting in highly favorable terms for Live Nation, including cheap rent, the ability to generate revenue by selling naming rights to a government building, and even taxpayer help to build and maintain the properties that Live Nation profits from. Rarely, if ever, do these contracts insist on terms to advance the public interest, like requirements to operate the venue as an “open room” (open to artists that are not promoted by Live Nation), limits on excessive fees, or street pricing for concessions.
Read the list of venues here.
In addition, VPA found that at least $420 million in taxpayer money went to benefit Live Nation, not including the below-market rent Live Nation is paying or its profit from selling naming rights on government buildings.
“A federal jury found that Live Nation monopolized the amphitheater market, which has led to higher prices and fewer choices for music fans across the country,” said Brian Shearer, director of competition and regulatory policy at VPA and a co-author of the report. “But cities and states don’t need to wait for a court order to begin rectifying this problem. They can simply stop financing Live Nation’s venues and evict them from public-owned venues.”
The findings also highlight that government contracting could be a powerful lever for addressing Live Nation’s monopoly. To assist local governments in building a live music ecosystem that reinvests in local communities and avoids enriching a powerful monopoly, the report proposes two potential solutions. The first, an “outsourcing with conditions” model, would open venue operating contracts to competitive bidding with strict conditions to advance the public interest and a preference for independent venue operators familiar with the unique needs of local communities. The second, a “public D.I.Y.” model, proposes that cities operate their properties via a specially chartered public nonprofit corporation. There is precedent for both models, and either would enable local governments to operate their large venues and advance important public interest goals, while avoiding siphoning taxpayer funds onto the balance sheets of an extractive monopoly.
Read the full paper here, or learn more about the research on VPA’s Substack.
About the VPA
The Vanderbilt Policy Accelerator for Political Economy and Regulation (VPA) focuses on cutting-edge topics in political economy and regulation to swiftly bring research, education, and policy proposals from infancy to maturity. To learn more about our work, visit vu.edu/vpa.