Prominent Economists Back States’ Damages Theory In Live Nation/Ticketmaster Antitrust Fight

Three prominent antitrust economists are seeking to weigh in against Live Nation and Ticketmaster’s effort to knock out the damages theory that helped support the states’ landmark antitrust verdict, arguing in a proposed amicus brief (embedded below) that the companies’ attack on the testimony of damages expert Rosa Abrantes-Metz rests on a flawed understanding of basic pricing economics.

The proposed brief, filed Thursday, supports the states’ position on a narrow but important issue in the post-verdict fight: whether Ticketmaster’s upfront payments to venues should be deducted from the alleged per-ticket overcharges paid by fans. The economists argue that those upfront payments are fixed, lump-sum transfers between businesses, not marginal per-ticket costs that would reduce the price injury to consumers – a position that lines up squarely with the Abrantes-Metz testimony that Live Nation is trying to undermine.

Authors of the brief are a trio of well-regarded economists, including two who formerly served as chief economist at DOJ’s Antitrust Division in Nancy L. Rose (MIT) and Fiona Scott Morton (Yale). Steven Berry is Sterling Professor of Economics at Yale University. The brief says none of the three is being paid for the opinion or has a financial interest in the outcome of the litigation.

Their filing comes as Live Nation and Ticketmaster continue to challenge the states’ damages case following a jury verdict that found the companies violated antitrust laws in the live entertainment and ticketing markets. The testimony given by

The economists’ proposed brief does not attempt to answer every post-verdict issue now before Judge Arun Subramanian. Instead, it focuses on a specific argument Live Nation has used to challenge Abrantes-Metz’s damages model: that she improperly failed to account for upfront payments Ticketmaster makes to venues when calculating the amount Ticketmaster retained from ticketing fees.

Live Nation has argued that those upfront payments are part of the contractual economics between ticketers and venues. In a prior filing seeking to exclude Abrantes-Metz’s testimony, Live Nation said upfront payments are negotiated alongside fee splits and directly affect the share of ticketing fees venues are willing to give Ticketmaster. In its Rule 50 motion, Live Nation also argued that if Abrantes-Metz’s testimony is struck, the states have no basis for their damages claim.

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The economists say that argument confuses two separate economic concepts: how profitable a contract is overall, and how a firm sets a per-unit price to consumers.

“It is a foundational principle of economics that a profit-maximizing firm sets per-unit prices on the margin,” the proposed brief argues. Fixed payments, they say, may determine whether a ticketing company wants a venue contract, or how the financial benefit of that contract is divided between Ticketmaster and the venue. But once the contract is in place, those fixed payments do not determine the marginal fee charged on each ticket.

That distinction is central to the damages dispute. Abrantes-Metz’s model looked at the alleged overcharge fans paid through Ticketmaster fees. Live Nation is arguing that the model is unreliable because it does not offset those alleged overcharges by accounting for upfront payments Ticketmaster made to venues. The economists argue that doing so would effectively treat a payment to the venue as if it were a benefit to consumers, even though fans do not receive that money and, in their view, do not receive lower ticket fees because of it.

“The lump sum that a ticketer may pay the venue in order to obtain the contract accrues to the venue, not to consumers,” the proposed brief argues, adding that subtracting that venue benefit from consumer harm would “shortchange” ticket buyers.

That position closely tracks the states’ own defense of Abrantes-Metz. In opposing the motions to strike pushed by the ticketing giant, the states argued that Abrantes-Metz was analyzing the ticketing service fees Ticketmaster retained, not the overall profit Ticketmaster or venues earned from those fees.

Judge Subramanian had already allowed Abrantes-Metz’s testimony to proceed before trial over Live Nation’s objections. In that ruling, the court noted that Abrantes-Metz had included a cross-check comparing Ticketmaster’s total fees charged to fans with AXS fees, even after calculating per-ticket damages based on retained amounts.

Since upfront payments are a major feature of primary-ticketing contracts – and indeed believed to be a key cog in how Live Nation and Ticketmaster lock out competition, the economic arguments made in the filing are notable. Venues often receive substantial financial incentives in exchange for long-term exclusive ticketing deals. Live Nation and Ticketmaster have argued that those payments matter to any fair assessment of the economics of venue-ticketing contracts. The economists’ brief takes the opposite view for purposes of consumer damages: those payments may matter to venues, but they do not erase higher fees allegedly paid by fans.

The economists warn that accepting Live Nation’s approach would have consequences beyond this case. If courts deduct fixed payments from per-unit overcharge calculations, they argue, antitrust damages could be understated in cases where consumers paid supracompetitive prices but the defendant also made fixed payments to another business partner. That, they say, would leave consumer harm uncompensated and weaken antitrust enforcement.

Live Nation did not oppose the economists’ request to seek leave to file the amicus brief, according to the filing, but asked for the opportunity to file an equal-length response if the court grants the motion.

No ruling has been issued on the proposed brief, and the filing does not resolve the broader post-verdict disputes over liability, remedies, market definition, or Live Nation’s other attacks on the states’ case. But it directly addresses one of the most important damages questions still before the court: whether payments made to venues can be used to reduce or eliminate overcharge damages allegedly suffered by fans.

For the states, the answer from the economists is clear. Upfront payments are part of the business bargain between Ticketmaster and venues. They are not, in the economists’ view, a discount passed on to ticket buyers.