SeatGeek was on the brink of solidifying a significant advancement in its ticketing business. The company was in talks with the Dallas Cowboys to manage first-party ticket sales at the team’s stadium. However, a major hurdle threatened the negotiations: the potential impact on concerts. The Cowboys were concerned that if they terminated their relationship with Ticketmaster in favor of SeatGeek, Ticketmaster’s parent company, Live Nation, might retaliate by withholding concerts from the stadium, jeopardizing a crucial revenue stream.

This recollection comes from SeatGeek CEO Jack Groetzinger, who testified about the situation. Eventually, the deal was finalized, establishing a primary ticketing partnership announced in 2018. Yet, Groetzinger noted in front of a Manhattan jury on Friday that the “concert issue” posed a significant risk and nearly derailed the entire process.

In the early stages of the government’s six-week antitrust trial against Live Nation-Ticketmaster, allegations of retaliation—strongly denied by Live Nation—have been central. Industry insiders testified that Live Nation’s promoters were suspected of denying concerts to venues that opted against using Ticketmaster. This perceived or actual threat instilled enough fear that some major venues hesitated to switch to what they considered superior ticketing products to avoid provoking Live Nation. While a settlement seems to be on the horizon, significant changes are anticipated, although not the full dissolution proposed by the government during the trial. The numerous states involved in the case now face the decision of whether to continue pursuing legal action.

SeatGeek wasn’t entirely sure if Live Nation would retaliate, but the fear of losing concerts was costing them business, Groetzinger explained. When the Cowboys deal seemed in jeopardy, a SeatGeek employee proposed an audacious solution: offering retaliation insurance. This would ensure that if Live Nation bypassed a venue for a concert, SeatGeek would compensate them for the lost revenue.

This proposal made Groetzinger uneasy, as it required SeatGeek to reserve a significant amount of money for potential payouts. Even if no claims were made, the company would need to offset those funds elsewhere in the contract, potentially resulting in less favorable terms for the venue. Nevertheless, SeatGeek’s board approved the idea, which ultimately secured the Cowboys deal. Going forward, offering retaliation insurance became a last-resort strategy. “It’s daunting, but if it’s the only option, we’ll proceed,” Groetzinger said.

To date, two venues that opted for retaliation insurance have claimed it was necessary—one being the Cowboys. In 2022, the Cowboys informed SeatGeek that they believed Live Nation had overlooked their stadium for a Coldplay concert. However, in the interest of maintaining a positive relationship with SeatGeek, the Cowboys chose not to pursue the claim at that time.

The risks are even more pronounced with smaller arenas, where there are more options for artists and promoters to choose between, Groetzinger said.

Early in the week, the jury heard from two witnesses who were directly responsible for ticketing at arenas: the former CEO of Barclays Center owner BSE Global, John Abbamondi, and Mitch Helgerson, chief revenue officer for the Minnesota Wild hockey team. The Wild considered a SeatGeek offer, but Live Nation-Ticketmaster allegedly threatened to move its shows to the Target Center in nearby Minneapolis, an “almost catastrophic” (in Helgerson’s words) consequence even retaliation insurance wouldn’t fix. Barclays negotiations went better, and SeatGeek signed a seven-year deal in 2021. But quickly, everything fell apart.

SeatGeek made significant sacrifices to land Barclays. BSE calculated the arena could lose $20 million if Live Nation skipped over the arena, a number SeatGeek couldn’t afford to cover outright, so it offered the next best thing: $20 million of equity in its business. The deal would be “one of the least profitable deals that we signed,” Groetzinger said. “But we thought it was worth doing because this was going to be such a watershed moment for us.” In fact, the year after SeatGeek signed the deal, it was able to add three NFL stadiums and two arenas to its client list, he said.

But it quickly became clear that the number of Barclays concerts was “way below what we expected,” Groetzinger recalled. Abbamondi’s contract wasn’t renewed, and the arena began “complaining about things that either didn’t make sense or were really small.” Some were legitimate issues with SeatGeek’s platform that it worked to fix, but others were data entry issues created by BSE’s own box office staff, which Abbamondi also testified to. Groetzinger felt Barclays was creating a pretext to go back to Ticketmaster because it was frantic about losing Live Nation shows. The deal ended after 18 months. On cross-examination, Live Nation attorneys have suggested SeatGeek’s incompetence, not Live Nation’s alleged retaliation, caused the deal to disintegrate.

The more arenas SeatGeek failed to win over or lost, the harder it became to get new ones, Groetzinger said. SeatGeek has signed five arenas total to its primary ticketing business. “An arena worries about being skipped when they feel like they’re on an island,” Groetzinger said.

It’s bigger than Ticketmaster

The case is about more than just ticket sales. The government also alleges that Live Nation has monopoly power over the market for large amphitheaters in the US — outdoor venues popular with touring artists in the summer months. The company allegedly conditions access to these venues on using its own promoters, making it nearly impossible for others to break in.

The jury began to hear about this issue, too, last week, including from Seth Hurwitz, owner of It’s My Party (I.M.P.), which runs major venues around the Washington, DC area like the 9:30 Club and non-Live Nation operated amphitheater Merriweather Post Pavilion. When it comes to amps, it’s basically “me and Live Nation,” he said.

Another witness, former Irvine, CA city manager Oliver Chi, described Live Nation’s aggressive tactics as the city considered alternative operators for the new amp it was building. A lobbyist for the company allegedly told Chi “Live Nation would simply route around” the amp if it were denied the contract.

Live Nation has tried to establish that many of the practices it’s come under fire for — like signing exclusive contracts with venues and having a vertically integrated business — are things that its rivals also do. It attempted to cast doubt on the alleged threats, suggesting, for example, that they were simply neutrally describing risks.

If a settlement isn’t announced today, the jury will likely continue to hear this week from AEG, a similarly structured concert promotions and ticketing business, as well as from a concert fan and some company executives. Eventually, they’re expected to hear from its CEO, and artists Kid Rock and Mumford & Sons’ Ben Lovett. If the government settles, at least some states may push ahead — and the court will decide the fate of one of the biggest live events empires in the US.