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Endeavor execs depart Live Nation board because of US Department Of Justice concerns

By Chris Cooke | Published on Tuesday 22 June 2021

The US Department Of Justice yesterday announced that Ariel Emanuel and Mark Shapiro, respectively CEO and President the Endeavor Group, have both resigned from the board of Live Nation after it “expressed concerns that their positions on the Live Nation board created an illegal interlocking directorate”.

As well as owning various talent and booking agencies – not least William Morris Endeavor – the wider Endeavour Group also has other interests across the sports and entertainment industries, including businesses involved in content and event production, and brand licensing. Though it seems to be the group’s interests in ticketing which are deemed as being too close to Live Nation’s interests by competition regulators at the DoJ.

In its statement, the government department explained that “an interlocking directorate is where one person – or an agent of one person or company – serves as an officer or director of two companies”. US law, it added, “prohibits the same person or company from serving as an officer or director of two competing companies, except under certain defined safe harbours”. And none of those safe harbours applies here.

“Endeavor and Live Nation compete closely in many sports and entertainment markets”, the DoJ continued. “Both Live Nation and Endeavor, through its wholly owned and minority owned subsidiaries, promote and sell tickets and VIP packages that include tickets, lodging and travel accommodations, to live music, sporting and other entertainment events. Based on US revenues, the interlock did not qualify for any of the Section Eight safe harbours”.

According to to Billboard’s sources, of particular concern to DoJ regulators was the 2017 acquisition of a ticketing service that began life as Paciolan by sports marketing platform Learfield IMG College, a company co-owned by Endeavor via its IMG subsidiary. Paciolan was previously owned by Ticketmaster, which sold it in 2010 as part of the deal negotiated with the DoJ in order to get regulator approval of the big old Live Nation/Ticketmaster merger.

Though, given Emanuel and Shapiro have been on the Live Nation board since 2007 and 2008 respectively – and the Paciolan deal happened four years ago – it’s not entirely clear why that would prompt the DoJ to act now. After all, the government department has been actively scrutinising the operations and governance of Live Nation in recent years amid allegations that it hadn’t complied with the terms of that 2010 deal relating to the merger.

Other sources reckon that, while Paciolan may have been a contributing factor, the real problem is that the wider Endeavor Group has been steadily growing its interests in ticketing and, especially, the sale of VIP sport and entertainment packages. Sources speaking to Reuters cited in particular the purchase last year of On Location, an agency that sells luxury packages for sports and music events, as being a particular problem. Or maybe it’s just a sign that the DoJ under President Joe Biden plans to be more strict on competition law issues.

Whatever, Acting Assistant Attorney General at the DoJ’s Antitrust Division, Richard Powers, said: “These resignations ensure that Endeavor and Live Nation will compete independently. Executives are not permitted to hold board positions on companies that compete with each other. The division will enforce the antitrust laws to make sure that all companies compete on the merits”.

Live Nation had already announced that Emanuel was leaving its board earlier this month. It is yet to comment on the DoJ’s statement. However, a spokesperson for Endeavor said that, while there was no actual violation of the law in their senior execs sitting on a rival’s board: “We understand and respect the DoJ’s concerns regarding the current similarities of our businesses”.