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President Biden Hosts Kenyan President; Congress Grills College Presidents; DOJ Announces Antitrust Lawsuit Against Live Nation. Aired 11-11:30a ET

Aired May 23, 2024 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[11:00:00]

WOLF BLITZER, CNN HOST: At any moment now, the U.S. attorney general, Merrick Garland, is expected to announce that the Justice Department is suing Ticketmaster's parent company. It would set up an antitrust fight that could reshape the multibillion-dollar live music industry.

And President Biden sitting down with Kenya's president, William Ruto, with China's expanding role in Africa looming over the state visit.

Also right now, Congress is grilling the presidents of three major universities. This is the first hearing since a wave of protests erupted at campuses across America.

And a short time from now, officials in Louisville will update their investigation into Scottie Scheffler's arrest. They're expected to release new video of the incident last week involving the world's number one golfer.

Hello. I'm Wolf Blitzer in Washington, and you're in the CNN NEWSROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Any minute now, the U.S. Department of Justice unveils a groundbreaking antitrust lawsuit against Live Nation. That's the parent company of Ticketmaster.

The suit alleges Live Nation abused its industry dominance for years to stifle competition and to harm concertgoers. This was on full display, apparently, back in 2022, when a Ticketmaster glitch blocked millions of fans from buying tickets to Taylor Swift's Eras Tour.

That incident led lawmakers to demand answers from company executives last year at a congressional hearing. It also fueled the Biden administration's so-called war on junk fees.

Trial and defense attorney Misty Marris is joining us right now.

Misty, how big of a deal is this antitrust lawsuit against Live Nation?

MISTY MARRIS, DEFENSE AND TRIAL ATTORNEY: This is absolutely huge, Wolf, because this could change the way that these types of ticket platforms actually function.

And one of the biggest things that could result from this lawsuit is actually breaking up the Ticketmaster and Live Nation companies. So, the government can actually make a determination ultimately that this is too large of a monopoly and that this business actually has to be broken up into smaller pieces in order to avoid that unfair lack of competition that essentially dominates the marketplace.

BLITZER: You're looking at the lectern over there at the U.S. Department of Justice. We will have coverage, obviously, of this important development.

Misty, how strong is the Justice Department's case, from your perspective? Are they likely to be successful?

MARRIS: Wolf, so it's really important to understand the history of how we got here.

So, the merger between Live Nation and Ticketmaster was approved back during the Obama administration in 2010. And one of the primary tenets was, this will be approved, but there cannot be retaliation against any venues, any platforms, any other basically business entities involved in the music business because of the strength of this company.

So it was very, very focused on this anti-retaliation element. Back in 2019, the DOJ brought a lawsuit saying that Ticketmaster, Live Nation, had actually violated that. So they entered into what's called a consent decree. And some of these tenets were again set forth in that decree.

Well, is there anything Taylor Swift can't do, right Wolf? So now, in 2022, there's a laser focus on what happened during this absolute debacle with the Taylor Swift tickets. But, keep in mind, Live Nation had already been under the microscope for their failures during that 2019 lawsuit.

So, based on that history, the government comes in with a position of strength, because this is not just something that's been created out of the ether. This is the result of a two-year investigation since 2022, but it's actually the result of a pattern of conduct since 2019.

So this is not something very isolated. This is looking back from a significant period of time and then bringing this lawsuit in conjunction with 30 states.

BLITZER: If Live Nation is broken up, Misty, how is that likely to impact millions of customers who want to go to concerts?

MARRIS: Well, so, it will have a very, very practical impact.

And the reality is, Wolf, that type of thing does not happen overnight. If that were to be the ultimate result of the lawsuit, that it was determined that Live Nation is simply a monopoly that's controlling everything, it would -- there would be a plan of action, and it would take a significant period of time for that plan of action to go into effect.

And all of that would be spelled out in a court order. So it wouldn't be as if everything would change overnight. It would likely, from the consumer perspective, be a bit of a slower burn. But, ultimately, the goal would be that the consumer isn't basically in a position where Live Nation and Ticketmaster are their only choices, this going back to some of the issues that were raised in 2019.

[11:05:09]

Some of the allegations mirror what we're seeing in this lawsuit, that there are actually threats to some of these venues that, if you don't use Ticketmaster, you're not going to get the big acts. There were also these laborious contracts that were locking in the most prominent venues or most prominent artists to be linked to Ticketmaster.

So, some of those, it will be interesting to see how the government deals with those private contracts, which are violative of this monopoly, but are also separate and apart. So it's super complicated. And I don't think the consumer will feel it right away, but, ultimately, hopefully -- and I know I have tried to buy concert tickets for Madison Square Garden in New York, where I live.

And it gets to the point where they're gone in five seconds. There will be other avenues and venues for the customer to actually purchase tickets without being beholden to one company.

BLITZER: We're told this is about to begin in about a minute or so. If I interrupt you, Misty, you will understand.

This is the second big antitrust suit in as many months for Merrick Garland's Department of Justice, coming after the antitrust suit against Apple back in April. What does that signal to you?

MARRIS: It signals that the Biden administration is taking a look at these large companies and doing that assessment and really, really focusing on whether or not there have been violations of antitrust.

So, yes, we have seen Apple, we have seen Google, we have seen Amazon. But this administration is not going to let these issues lie. To the extent that there is a potential violation of the longstanding antitrust rules that are in effect, it signals that the DOJ is not leery to actually take action, whether it be another what's called, as we spoke about before, consent decree, which sets forth changes that needs to be made to a company in order to remain in its current form.

So, Live Nation and Ticketmaster, they stay together. This was the result in 2019, but they have certain parameters that they have to fulfill in order to remain that way, but also the potential to break up these companies. It seems like the DOJ is really looking at this from that trustbuster perspective.

If there is a violation, they're not leery to take action.

BLITZER: So can we assume, simply assume that the failure for millions of people out there potentially to get tickets for Taylor Swift's Eras Tour was responsible?

Hold on. Hold that thought for a second.

Here's the attorney general of the United States.

MERRICK GARLAND, U.S. ATTORNEY GENERAL: Good morning.

Earlier today, the Department of Justice, joined by 29 states and the District of Columbia, sued Live Nation Entertainment and its wholly owned subsidiary Ticketmaster for violating the Sherman Anti-Trust Act.

In recent years, Live Nation Ticketmaster's exorbitant fees and technological failures have been criticized by fans and artists alike. But we are not here today because Live Nation Ticketmaster's conduct is inconvenient or frustrating. We are here because, as we allege, that conduct is anticompetitive and illegal.

Our complaint makes clear what happens when a monopolist dedicates its resources to entrenching its monopoly power and insulating itself from competition, rather than investing in better products and services.

We allege that Live Nation has illegally monopolized markets across the live concert industry in the United States for far too long. It is time to break it up.

Live Nation Ticketmaster has made itself ubiquitous in the live entertainment industry. It controls at least 80 percent of primary ticketing at major concert venues. It directly manages more than 400 artists and controls more than 60 percent of concert promotions across the country.

And it owns or controls more than 60 percent of large amphitheaters in the United States. We allege that, to sustain this dominance, Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States and over the fans, artists, independent promoters, and venues that power the industry.

The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services.

As detailed in our complaint, Live Master -- Live Nation Ticketmaster locks out competition in ticketing through the use of long-term, exclusive ticketing contracts with venues that can last over a decade, as well as by acquiring venues themselves.

[11:10:05]

With exclusive agreements that cover more than 70 percent of concert ticket sales at major concert venues across the country, Ticketmaster can impose a seemingly endless list of fees on fans. Those include ticketing fees, service fees, convenience fees, platinum fees, Price Master fees, per-order fees, handling fees, and payment processing fees, among others. For fans in the United States, this illegal conduct means higher

prices. In other countries, where venues are not bound by Ticketmaster's exclusive ticketing contracts, venues often use multiple ticketing companies for the same event, and fans see lower fees and more innovative ticketing products as a result.

We also allege that Live Nation Ticketmaster uses these long-term ticketing agreements with venues and its control over those venues to unlawfully pressure artists into agreeing to use its promotion services. In fact, Live Nation often sacrifices profits it could earn as a venue owner by letting its venues sit empty, rather than opening them to artists who do not use Live Nation promotion services, even during peak concert season.

Live Nation has not only deployed anticompetitive tactics to coerce artists and venues into using its services and to charge fans excessive fees; it has also worked strategically and illegally to eliminate the threat of potential rivals from emerging across any of its businesses.

As detailed in our complaint, Live Nation suffocates its competition using a variety of tactics, from acquisitions of smaller regional promoters and venues, to threats and retaliation, to agreements with rivals designed to neutralize them. This has included acquiring or co- opting key independent promoters, even when the economics of a particular deal did not make sense for Live Nation's promotions business.

For example, as recounted in our complaint, Live Nation acquired a controlling stake in AC Entertainment, an independent promoter in Tennessee. Live Nation's chief strategy officer assured executives that, even though -- quote -- "The numbers are not super exciting and this feels like more of a defensive move," the acquisition helped -- quote -- "grow our moat in the Nashville market."

When faced with another potential competitor to its promotions business, Live Nation took action to ensure that the competitor would not threaten its dominance in the live music industry.

BLITZER: All right, we're going to continue to monitor this important news conference by the attorney general of the United States, Merrick Garland, announcing that the Department of Justice is suing Live Nation and Ticketmaster for a whole bunch of reasons.

It's time to break it up, he says. It's important to break it up because it's acting unlawfully and anticompetitively. So we will continue to watch this, this important development, for folks out there who use Live Nation and Ticketmaster to go to concerts.

We will explain more. There's a lot of other news we're watching as well.

We will take a quick break. We will be right back.

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[11:18:13]

BLITZER: Happening now here in Washington up on Capitol Hill, the presidents of three universities are facing tough questions about rising antisemitism on college campuses and who should be held responsible.

Leaders from UCLA, Rutgers and Northwestern are testifying before the House Education and the Workforce Committee after protests and rampant reports of campus discrimination. This, by the way, is the same congressional panel that blasted the heads of Harvard, Penn and MIT for failing to condemn antisemitism as harassment and bullying.

Penn President Liz Magill stepped down just days after that hearing.

I want to bring in CNN's Matt Egan, who is following all of these developments for us. He's joining us live.

Matt, what have we heard so far during the course of this hearing?

MATT EGAN, CNN REPORTER: Well, Wolf, college presidents are once again in the hot seat in Washington.

This is the third hearing from this committee focusing on antisemitism on campus. And this hearing, in particular, has really zeroed in on how these university presidents have handled this historic amount of protests, pro-Palestinian protests on campus.

Now, some of the toughest questions have been reserved for Michael Schill. He's the president of Northwestern. Listen to this exchange between the president of Northwestern and Republican Elise Stefanik.

(BEGIN VIDEO CLIP)

REP. ELISE STEFANIK (R-NY): Isn't it also true that Northwestern earned an F for your failure to respond and combat antisemitism, and they called for your resignation? Is that correct?

MICHAEL SCHILL, PRESIDENT, NORTHWESTERN UNIVERSITY: I have great respect for the ADL.

STEFANIK: I'm not asking you respect for the ADL. I'm asking, is it a fact that you earned an F and they called for your resignation? Isn't it true that a Jewish Northwestern student was assaulted?

SCHILL: There are allegations that a Jewish student was assaulted. We are investigating those allegations.

[11:20:03]

STEFANIK: Isn't it true that a Jewish student was verbally harassed and stalked to Hillel?

SCHILL: There are allegations of that sort, and we are investigating them.

STEFANIK: Isn't it true that a Jewish student wearing a yarmulke was spat on?

SCHILL: All of these are allegations that are being investigated.

(END VIDEO CLIP)

EGAN: Now, Schill has noted that no students at his university have been suspended or expelled yet, but he said that all of this is under investigation, suggesting that there could be action taken.

Now, in his opening remarks, Northwestern's president, he also noted that he himself is Jewish, that, in his family, he has Holocaust survivors. The Northwestern president, he also faced tough questions over that agreement that the school made with the pro-Palestinian protesters to end their encampment.

Then we had the UCLA chancellor. He also faced a lot of tough questions over their handling of the encampment there. During his opening remarks, the chancellor of UCLA, he acknowledged that, with the benefit of hindsight, they should have been ready to move faster to end that encampment, because what ultimately happened there is, by the time police were ready to move in, we saw counterprotesters and violence on the campus of UCLA.

At the end of the day, these university presidents, they are in a very difficult spot, because they are facing a lot of pressure from Republicans and donors who feel that they have tolerated antisemitism on campus, which is something that the presidents, of course, deny.

But they're also facing pressure from students and faculty who feel these universities are silencing protesters and their freedom of speech. So we're going to continue to monitor this to see what other interesting segments come out of this as lawmakers really grill these college presidents -- Wolf.

BLITZER: And we will stay in close touch with you, Matt. Thank you very much. We will continue to update our viewers.

Matt Egan reporting.

There's more news we're following. From number one in the world to potential felony charges, that's what faces the golfer Scottie Scheffler. We're only moments away from police releasing new video of his arrest last week. What impact could that have on the case?

Stay with us. You're in the CNN NEWSROOM.

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[11:26:50]

BLITZER: Also happening this morning, President Biden and the first lady, Jill Biden, are hosting Kenyan President William Ruto and Kenya's first lady, Rachel Ruto, over at the White House.

The official state visit marks 60 years of diplomatic relations between the two nations. And it comes as the Biden administration is trying to boost ties with the East African nation and to curb China's influence in the region.

CNN White House correspondent Priscilla Alvarez is joining us now. She's over at the White House on the North Lawn.

Priscilla, what can we expect from today's visit?

PRISCILLA ALVAREZ, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, this is also a significant visit because it is the first state visit of an African leader since 2008.

And they just held a bilateral meeting where the two -- you're seeing images there -- again underscore their decades-long relationship. And they also acknowledge that they're going to talk about a broad range of issues. That includes elevating Kenya from a regional partner to a global one, the importance of democracy, as well as private sector investments.

But there is no doubt, Wolf, as you mentioned, that a lot of this also has to do with countering China's influence in Africa. Of course, the U.S. and China have been jockeying for economic and geopolitical influence in that region, and China, of course, providing those high- interest loans to Africa.

So, investment is important and that economic cooperation in these ongoing talks. They will also be announcing a spate of commitments, including, for example, a document known as the Nairobi-Washington visit to call on creditors to help ease the financial burden.

Then, two, the president is going to designate Kenya as a major non- NATO ally, so a lot more to hear from this visit. And we will also see the two of them again later this afternoon for a press conference, where we will hear directly, but, of course, all of this, again, to shore up that partnership between these two countries, and particularly for President Biden, who in 2022 said that he was all in on Africa -- Wolf.

BLITZER: A very important meeting over at the White House right now.

Priscilla Alvarez, thank you very much.

Still ahead: Many golf fans were outraged after Louisville police arrested the Masters champion Scottie Scheffler. He said it was a misunderstanding. In just a few minutes, we expect the police, the local police, to release new video of the incident. We will share it with you.

Stay with us. You're live here in the CNN NEWSROOM.

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