# Weekend Law: Musk Testifies in Twitter Investor Fraud Case, Live Nation's Antitrust Trial

An episode of [Bloomberg Law](https://invisiblenetwork.ai/podcast/277975394), 6 Mar 2026, 39 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7c892d84-801f-4c0b-b0e9-ae2b0012ff5f/7648d3ca-c501-45ef-b26b-b4050186be72/audio.mp3?utm_source=Podcast&in_playlist=91224201-26a6-429d-ac3c-ae2b0012ff6d

Bloomberg's Jef Feeley breaks down Elon Musk's investor fraud trial, which claims he manipulated Twitter's stock price in 2022 in order to get a better deal. Bloomberg News antitrust reporter Leah Nylen joins to discuss the Live Nation antitrust trial that is just getting underway in New York. And Martin Edel, co-chair of the Sports Law Practice at Goulston & Storrs and an adjunct professor at Columbia Law, discusses MLB's longstanding antitrust exemption, which just survived a new challenge. Featuring special guest host Amy Morris, in for June Grasso. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
[0:08] Speaker 2: This is Bloomberg Law.
[0:09] Speaker 3: Employers frequently exploit the weaknesses.
[0:12] Speaker 4: In the law. Of course, are going to be asking
[0:13] Speaker 4: questions about separation of powers.
[0:15] Speaker 2: One by one, Google settled with all of these other plaintiffs.
[0:18] Speaker 2: Interviews with prominent attorneys and Bloomberg legal experts.
[0:22] Speaker 4: Joining me is immigration law expertly on Fresco, First Amendment
[0:25] Speaker 4: law expert Caroline Malick.
[0:27] Speaker 2: Corbin, and analysis of important legal issues, cases and headlines.
[0:31] Speaker 1: That Trilie Judge may well want to hold a hearing.
[0:34] Speaker 4: They have never said this case.
[0:36] Speaker 3: Should never have been brought in the first place.
[0:38] Speaker 2: Bloomberg Law with June Grosso from Bloomberg Radio.
[0:45] Speaker 5: Welcome to the weekend edition of Bloomberg Law. I'm Amy
[0:49] Speaker 5: Morris in for June Grosso.
[0:50] Speaker 1: June's off this week.
[0:52] Speaker 5: Coming up this hour, we'll be focusing on a couple
[0:54] Speaker 5: of major antitrust cases. Will break down the Justice Department's
[0:58] Speaker 5: case against Live Nation as that trial gets underway. We'll
[1:01] Speaker 5: take a deep dive on baseball is exempt from antitrust laws.
[1:05] Speaker 5: All of that is on the way on Bloomberg Law
[1:07] Speaker 5: just ahead, But first let's begin with Elon Musk's Big
[1:11] Speaker 5: Securities fraud class action case. The billionaire took the stand
[1:16] Speaker 5: in federal court in San Francisco to defend himself against
[1:19] Speaker 5: claims that he deliberately drove down Twitter's stock price before
[1:23] Speaker 5: he bought it by tweeting Bloomberg's Jeff Eely is in
[1:27] Speaker 5: San Francisco. He's been following this case and joins us
[1:29] Speaker 5: now to bring us up to speed. First of all, Jeff,
[1:32] Speaker 5: the tweet that is at the center of this case,
[1:35] Speaker 5: what did that tweet say?
[1:36] Speaker 1: What was it about?
[1:38] Speaker 4: It was a tweet in May of twenty twenty two
[1:41] Speaker 4: in which mister Musk, who was frustrated by Twitter's foot
[1:47] Speaker 4: dragging on handing over information that he wanted to tie
[1:52] Speaker 4: to the deal. He basically tweeted out that he was
[1:57] Speaker 4: putting the deal on hold temporarily until they could give
[2:01] Speaker 4: him the material he sought. That same day that he
[2:08] Speaker 4: issued that tweet, he also issued a tweet saying he
[2:11] Speaker 4: was still committed to the deal. So, you know, he
[2:17] Speaker 4: claims that it was frustration. The investors who are suing
[2:20] Speaker 4: him claim instead that it was really part of a
[2:23] Speaker 4: campaign to drive down Twitter's share price so he could
[2:27] Speaker 4: buy it on the cheap.
[2:29] Speaker 1: Let's talk about that.
[2:30] Speaker 5: Your story on the Bloomberg terminal says that this trial
[2:33] Speaker 5: is going to take a closer look at that six
[2:35] Speaker 5: month window when Musk was going to take over Twitter,
[2:38] Speaker 5: then tried to withdraw the offer and then went through
[2:41] Speaker 5: with the deal because the company sued him. What's the
[2:45] Speaker 5: line that may be crossed here between someone having second
[2:48] Speaker 5: thoughts about a deal or just being flaky about a
[2:50] Speaker 5: deal versus someone deliberately trying to manipulate a deal.
[2:54] Speaker 1: Is that what they're trying to prove, right.
[2:57] Speaker 4: That's exactly what they're trying to prove. In M and
[3:02] Speaker 4: A litigation, which we cover a lot of in Delaware,
[3:06] Speaker 4: you're always going to get allegations of buyer's remorse.
[3:10] Speaker 6: You know.
[3:11] Speaker 4: M and A situations are always tied to the market.
[3:15] Speaker 4: Market fluctuates, the bases for deals can be affected. Here,
[3:22] Speaker 4: the investors contend that it was not fluctuations in the
[3:26] Speaker 4: market that really drove Elon to start thinking about trying
[3:31] Speaker 4: to reprice the deal. It was really the fluctuations in
[3:35] Speaker 4: the Tesla stock price. He was using Tesla shares to
[3:39] Speaker 4: both generate cash for the deal and secure loans, and
[3:43] Speaker 4: they took a dive during that period, and that made
[3:46] Speaker 4: it made the deal much more expensive for mister Musk.
[3:50] Speaker 4: So the investors contend that he launched an organized campaign
[3:55] Speaker 4: to attack Twitter to in hopes in hopes of drying
[4:00] Speaker 4: down the stock price so he wouldn't have to pay
[4:03] Speaker 4: as much for the company.
[4:05] Speaker 5: Now, he did wind up paying forty four billion for Twitter,
[4:10] Speaker 5: that's right. Did they intend for him to pay more
[4:13] Speaker 5: or is there a share price that should have been
[4:15] Speaker 5: up instead of down or where's the discrepancy?
[4:20] Speaker 4: Well, the discrepancy here is the deal of the timeline
[4:25] Speaker 4: is mister Musk makes an offer, Tesla shares crash, Mister
[4:32] Speaker 4: Musk attempts to renege on the deal, Twitter sues, Mister
[4:38] Speaker 4: Musks counter sues, and then after some pre trial rulings
[4:44] Speaker 4: from the judge in Delaware that were not favorable to
[4:46] Speaker 4: mister Musk, he decided to wave the white flag and
[4:50] Speaker 4: pay the full fifty four point twenty per share that
[4:55] Speaker 4: he had originally offered. So you know, it was this
[5:00] Speaker 4: is a you always have two versions of reality and
[5:05] Speaker 4: legal disputes, and this jury's going to decide which one
[5:10] Speaker 4: of the views of reality.
[5:14] Speaker 6: Sound more plausible to them.
[5:16] Speaker 5: So then what do the investors want if they ultimately
[5:18] Speaker 5: got the money that he had promised?
[5:22] Speaker 1: What are the other things?
[5:23] Speaker 4: Are some Yeah, these are some investors who, when mister
[5:27] Speaker 4: Musk issued his May thirteen tweet, decided or figured that
[5:33] Speaker 4: he had, you know, he was pulling out of the deal,
[5:35] Speaker 4: and they sold their shares in the thirties rather than
[5:41] Speaker 4: getting fifty four to twenty per share in October when
[5:45] Speaker 4: the deal closed.
[5:47] Speaker 5: I see, So it's about them having sold their shares
[5:51] Speaker 5: based on the idea that he's backing out.
[5:54] Speaker 4: That's right, And under securities fraud, you are bored in
[5:59] Speaker 4: an m and a situation from making a false or
[6:03] Speaker 4: misleading statement that would affect you know, the market, and
[6:07] Speaker 4: the investors can tend that that's what this temper deal
[6:12] Speaker 4: placed on temporary hold was. It was a false or
[6:14] Speaker 4: misleading statement.
[6:16] Speaker 1: Isn't that interesting?
[6:17] Speaker 5: I was thinking about how this is basically all based
[6:20] Speaker 5: on a tweet, and how unusual that is because there's
[6:23] Speaker 5: no documentation, there's nothing signed. He could probably argue that
[6:27] Speaker 5: it was just something he thought that he just tossed
[6:29] Speaker 5: out there, and.
[6:30] Speaker 4: That's exactly what he's arguing.
[6:32] Speaker 1: By the way, I nailed it.
[6:33] Speaker 5: So there's no documentation there, there's nothing signed. He could
[6:37] Speaker 5: argue that it was just a thought that he tossed
[6:39] Speaker 5: out there, which is what he did. How would this
[6:43] Speaker 5: change how future securities fraud suits might be handled? Social
[6:47] Speaker 5: media may be changing how the courts are looking at this,
[6:50] Speaker 5: how juries are looking at this.
[6:51] Speaker 1: Is that actually a factor? Now?
[6:55] Speaker 4: You know, I'm not sure you might argue that you're
[6:59] Speaker 4: going to have more security fraud because people, you know,
[7:03] Speaker 4: are availing themselves of public platforms like Twitter, which is
[7:10] Speaker 4: of course now called X. I think this is pretty much,
[7:15] Speaker 4: you know, your garden variety secure federal security fraud. It's
[7:19] Speaker 4: being tried in federal court San Francisco, by the way,
[7:22] Speaker 4: and I don't you know, it's all going to come
[7:26] Speaker 4: down to whether the jury believes that mister Musk had
[7:30] Speaker 4: intent to drive the stock price down. And that's very
[7:34] Speaker 4: hard to prove. Okay, so you know, nobody's This is
[7:39] Speaker 4: no slam dunk by any stretch of the imagination.
[7:43] Speaker 5: For the those who are suing for the investors, correct,
[7:47] Speaker 5: because they have to show intent.
[7:50] Speaker 4: That's right. And you know, in a criminal case, as
[7:53] Speaker 4: you know, intent is inferred if you point a gun
[7:55] Speaker 4: at someone, and a gun goes off. You are you know,
[7:59] Speaker 4: the law basically infers that you intended to kill that person.
[8:03] Speaker 4: Civil court completely different. You don't have that, you know,
[8:08] Speaker 4: beyond a reasonable doubt burden that you have to meet.
[8:11] Speaker 4: You know, you have to somehow get you know, persuade
[8:15] Speaker 4: the jurors that fifty one percent of the scale tips
[8:19] Speaker 4: in your favor when it comes to intent. But it's
[8:23] Speaker 4: just very difficult to prove.
[8:25] Speaker 1: How long would a case like this last.
[8:28] Speaker 4: They're thinking this is going to take roughly two weeks
[8:31] Speaker 4: to try.
[8:33] Speaker 1: Well, that seems pretty quick for a securities broadcase.
[8:37] Speaker 4: Well, you basically given each side a week, right, and
[8:40] Speaker 4: it's it's you can do it in that. Again, there's
[8:44] Speaker 4: not a lot of ground to cover here, you know,
[8:48] Speaker 4: two or three tweets and a podcast that's the summoned
[8:52] Speaker 4: substance of the allegations that were allowed to go to trial.
[8:58] Speaker 4: The judge knocked out other allegations.
[9:00] Speaker 5: Okay, Jeff Pheely, thank you so much for joining us
[9:03] Speaker 5: with this. We do appreciate your insights and your time.
[9:05] Speaker 5: Thank you so much, sure, Amy, and our thanks to Bloomberg'
[9:09] Speaker 5: Jeff Feely for joining us. Now let's turn to the
[9:11] Speaker 5: entertainment space in a highly anticipated antitrust case involving Live Nation.
[9:17] Speaker 5: It is a massive entertainment company and they're in court
[9:20] Speaker 5: to defend themselves against claims from the Department of Justice
[9:23] Speaker 5: that it monopolized the live music market, acting as the
[9:27] Speaker 5: biggest ticket seller while also running and in a lot
[9:30] Speaker 5: of cases, owning some of the nation's biggest concert venues.
[9:34] Speaker 5: The trial just got underway in New York. Joining us
[9:36] Speaker 5: now to talk about what comes next. Bloomberg News anti
[9:39] Speaker 5: trust reporter leon Elan Lea. Thank you for taking the
[9:42] Speaker 5: time with us, Thanks for having me so for years.
[9:45] Speaker 5: Let me just come at it from a fan point
[9:47] Speaker 5: of view. For years, those of us who've attended concerts
[9:50] Speaker 5: and bought tickets through ticket Master, which is owned by
[9:53] Speaker 5: Life Nation, have complained about the cost, complained about the monopoly.
[9:57] Speaker 1: And those are just the fans.
[9:58] Speaker 5: That's not even the venue and the concert promoters and
[10:02] Speaker 5: the agents and those who have also had to deal
[10:04] Speaker 5: with Live Nation.
[10:05] Speaker 1: Bring us up to speed. How we got here.
[10:08] Speaker 7: Yeah, so Live Nation bought Ticketmaster. They used to be
[10:12] Speaker 7: separate companies back in twenty ten. At the time, this
[10:15] Speaker 7: was during the Obama administration. There was an any Trust
[10:18] Speaker 7: review of the deal, and they were concerned because Live
[10:22] Speaker 7: Nation is what's known as a concert promoter, so they
[10:26] Speaker 7: own both a bunch of concert venues, but they also
[10:29] Speaker 7: help promote concerts, so they have people who help artists
[10:34] Speaker 7: sort of pick out which venues that they're going to
[10:37] Speaker 7: perform at and then arrange all of the details of
[10:40] Speaker 7: a tour. And they wanted to buy Ticketmaster, at the time,
[10:43] Speaker 7: the largest ticketing company. The Justice Department decided to allow
[10:47] Speaker 7: this to go through, but with some conditions, and the
[10:49] Speaker 7: conditions were that Live Nation could not retaliate against any
[10:54] Speaker 7: venues that wanted to use other concert promoters or other
[10:59] Speaker 7: ticketing services.
[11:01] Speaker 5: So the.
[11:04] Speaker 1: Merger was allowed to go through.
[11:05] Speaker 7: Everything went along, but the Justice Department alleges that Live
[11:11] Speaker 7: Nation repeatedly sort of violated a lot of these orders.
[11:15] Speaker 7: There were allegations that they were threatening venues to sort
[11:19] Speaker 7: of make them use Ticketmaster, which is why something like
[11:24] Speaker 7: eighty seven percent of venues across the United States used
[11:27] Speaker 7: Ticketmaster instead of other ticketing options. So the Justice Department
[11:31] Speaker 7: went back to court changed its sort of agreement with
[11:35] Speaker 7: Ticketmaster to one in which it had a monitor and
[11:38] Speaker 7: it had a lot more obligations and they feel that
[11:42] Speaker 7: that didn't work either. This sort of bad conduct continued,
[11:46] Speaker 7: so the Justice Department under the Biden administration started a
[11:50] Speaker 7: new investigation, and in twenty twenty four they assued Ticketmaster
[11:53] Speaker 7: for being a monopoly in multiple markets. Now, some of
[11:57] Speaker 7: the case ended up getting thrown out before trial, but
[12:00] Speaker 7: on Monday, I guess it went before a jury in
[12:03] Speaker 7: New York. The case is supposed to take several weeks.
[12:06] Speaker 7: We're thinking probably five to six weeks, and it's going
[12:09] Speaker 7: to feature testimony from people all across the live music industry.
[12:14] Speaker 7: So there'll be people from various venues. There'll be people
[12:17] Speaker 7: from ticket Master, there will be music artists. Kid Rock
[12:21] Speaker 7: and someone from Mumford and Sons are both supposed to testify,
[12:24] Speaker 7: as well as just some regular fans about how Ticketmaster
[12:28] Speaker 7: controlling so much of the industry has sort of impacted things.
[12:32] Speaker 5: Okay, Leah, let's hold it there for just a moment.
[12:34] Speaker 5: We are talking with Bloomberg News anti trust reporter Leah
[12:37] Speaker 5: and Eylan. We'll have more with Leah about the big
[12:40] Speaker 5: Live Nation antitrust case that's just ahead.
[12:42] Speaker 1: I may mean more as in for June Grasso.
[12:44] Speaker 5: You're listening to the weekend edition of Bloomberg Law.
[13:00] Speaker 2: Listening to Bloomberg Law with June Grosso from Bloomberg Radio.
[13:04] Speaker 5: Thanks for listening to the weekend edition of Bloomberg Law.
[13:07] Speaker 5: I'm Amy Morris in for June Grosso, and we've been
[13:10] Speaker 5: talking about the Department of Justice antitrust trial against the
[13:13] Speaker 5: live entertainment giant Live Nation. Bloomberg News anti trust reporter
[13:17] Speaker 5: Leah Island is with us. The crux of the DOJ's
[13:20] Speaker 5: case against Live Nation, Lea, is that it has a
[13:23] Speaker 5: monopoly on live entertainment because it owns ticket Master, which
[13:26] Speaker 5: is the nation's largest ticket seller in the nation. And Leah,
[13:30] Speaker 5: one of the things you mentioned is that at the
[13:32] Speaker 5: very beginning of this, back in twenty ten, when the
[13:34] Speaker 5: judge allowed for this merger in the first place, even
[13:37] Speaker 5: then the judge said, don't threaten concert venues. If they
[13:42] Speaker 5: don't want to use your services, you can't intimidate them.
[13:45] Speaker 5: The judge said that from the beginning, So is that
[13:47] Speaker 5: what they're accused of doing.
[13:49] Speaker 7: So that is one of the allegations that the Justice
[13:52] Speaker 7: Department is seeking to prove. The very first witness, in fact,
[13:55] Speaker 7: was the CEO from the Barclay Center, which is a
[13:57] Speaker 7: large concert venue in Brooklyn, New York. And they are
[14:02] Speaker 7: one of the venues that alleged that they were sort
[14:04] Speaker 7: of threatened by Ticketmaster Ticketmaster. They had wanted to switch
[14:10] Speaker 7: their ticketing provider away from Ticketmaster to sea geek, which
[14:13] Speaker 7: is another ticketing provider that it primarily does a lot
[14:17] Speaker 7: of uh sports related.
[14:20] Speaker 1: Events events, thank you.
[14:23] Speaker 7: Uh, sea gek primarily does a lot of sports related
[14:25] Speaker 7: events and uh so Barclays agreed to switch to sea
[14:30] Speaker 7: geek and uh they played a phone call in court
[14:34] Speaker 7: uh with the CEO of Barclays and the CEO of
[14:37] Speaker 7: Live Nation, and the CEO of Live Nation said, if
[14:39] Speaker 7: you switch away, it's going to be hard for us
[14:41] Speaker 7: to keep sending you concerts. And then after they switched
[14:45] Speaker 7: to sea Geek, the allegation is Live Nation started moving
[14:50] Speaker 7: concerts popular concerts to another concert venue in Queen's instead
[14:54] Speaker 7: of this one in Brooklyn. And so there was some
[14:58] Speaker 7: talk about a Billie Eilish concert that has been booked
[15:00] Speaker 7: at the Barclays Center, and all of a sudden it
[15:02] Speaker 7: got moved to this other venue.
[15:04] Speaker 5: So they're not just switching venues, they're actually moving acts
[15:09] Speaker 5: from a venue that was already booked to a different
[15:12] Speaker 5: venue that uses Ticketmaster.
[15:15] Speaker 7: Yes, and that is the allegation that the Justice Department
[15:18] Speaker 7: was focusing on. Live Nation maintains that this was at
[15:20] Speaker 7: the choice of Billie Eilish's team, Barclay's, you know, the
[15:24] Speaker 7: Barclays CEO said, you know, they had somebody check it out,
[15:27] Speaker 7: and Billie Eilish's team said that this was in fact request.
[15:30] Speaker 1: By ticket or by Live Nation. So it is a
[15:33] Speaker 1: little bit disuited.
[15:34] Speaker 7: But the Justice Department is planning to put on a
[15:36] Speaker 7: number of other venues who allege this happened to them.
[15:40] Speaker 7: They would look at switching to a different ticketing provider,
[15:43] Speaker 7: and Live Nation would say, well, if you switch to
[15:46] Speaker 7: somebody else, we're not going to be able to bring
[15:48] Speaker 7: you the same tickets. Live Nation has argued all along
[15:51] Speaker 7: that it's sort of under no legal obligation to do
[15:54] Speaker 7: business elsewhere that you know, the it makes most sense
[15:58] Speaker 7: for them, like business wise to put concerts at either
[16:04] Speaker 7: venues it owns or venues that are using Ticketmaster, because
[16:08] Speaker 7: you know, when it's a vertically in a graded company,
[16:10] Speaker 7: it's cheaper for them. And so that's actually one of
[16:13] Speaker 7: the major issues in the trial is is this like
[16:17] Speaker 7: a legitimate business practice or is this sort of unfair coercion?
[16:21] Speaker 7: Does this practice of them trying to tie their contracts
[16:25] Speaker 7: in this way make it illegal and sort of force
[16:29] Speaker 7: pressure on these venues to use Ticketmaster instead of other options.
[16:34] Speaker 7: The other interesting thing here is that the case is
[16:36] Speaker 7: being brought not just by the Justice Department, but by
[16:38] Speaker 7: a number of state attorneys general. And state attorneys general
[16:42] Speaker 7: do have the right to sort of seek damages on
[16:45] Speaker 7: behalf of their citizens. So there are twenty five states
[16:50] Speaker 7: twenty four and DC depending on how you count it,
[16:53] Speaker 7: that are seeking damages from Ticketmaster on behalf of concert goers.
[16:58] Speaker 7: They say that because of Ticketmaster's monopoly, ticket prices were
[17:02] Speaker 7: increased by at least about two dollars per ticket. So
[17:06] Speaker 7: obviously two dollars a ticket is not that much, you know,
[17:09] Speaker 7: for individual ticket, but we're talking about something in excess
[17:12] Speaker 7: of like twenty thousand concerts at thousands of concert venues
[17:15] Speaker 7: across the country. So if you add that all up,
[17:17] Speaker 7: we're talking about damages and the potential millions or billions
[17:20] Speaker 7: of dollars, depending on what the jury finds.
[17:23] Speaker 5: You cover anti trust cases a lotea. This is your jam.
[17:28] Speaker 5: So what criteria then do they have to meet to
[17:31] Speaker 5: show that yes, they violated this.
[17:34] Speaker 7: So first the jury has to find that they're a monopoly.
[17:38] Speaker 7: That's not really that can test. There is a little
[17:43] Speaker 7: bit of contention here about whether they're a monopoly. It
[17:47] Speaker 7: depends on what venues you considered to be in the
[17:50] Speaker 7: market versus not in the market, because the government first
[17:53] Speaker 7: has to show that they have the power to sort
[17:56] Speaker 7: of exert undue influence. The government says that Ticketmaster controls
[18:02] Speaker 7: ticketing at about eighty seven percent of what they're calling
[18:05] Speaker 7: major concert venues. So these are the venues that generally like,
[18:09] Speaker 7: the thing that they do the most is hold music concerts. Sure,
[18:13] Speaker 7: Ticketmaster says that that's not really the appropriate market. That
[18:18] Speaker 7: it should include sort of all spaces that could potentially
[18:23] Speaker 7: host a concert. So in addition to like something that
[18:27] Speaker 7: would like an amphitheater or an arena, it should also
[18:29] Speaker 7: include a stadium. And so if you consider all of
[18:33] Speaker 7: those things stadiums, amphitheaters, arenas, their market share is a
[18:37] Speaker 7: little bit smaller. It would be only about forty percent,
[18:39] Speaker 7: which there isn't like a legal definition of what a
[18:42] Speaker 7: monopoly is. But generally it's considered to be at least
[18:44] Speaker 7: fifty to sixty percent. So that's one of the things
[18:47] Speaker 7: the jury will have to decide. Should they be considering
[18:50] Speaker 7: every single place that a concert should take place or
[18:53] Speaker 7: just sort of major concert venues. The Justice Department argues that,
[18:57] Speaker 7: you know, there are only certain artists who are going
[18:59] Speaker 7: to be able to fill stadium, someone like Beyonce. So
[19:02] Speaker 7: if you are you know, up and coming artist, you're
[19:05] Speaker 7: not really going to be playing a stadium. You're going
[19:06] Speaker 7: to be playing some of these smaller places. And those
[19:09] Speaker 7: are the places where Ticketmaster has a little bit more
[19:12] Speaker 7: power because most of the business they're doing is music concerts.
[19:17] Speaker 1: So we'd also including night clubs in this.
[19:19] Speaker 7: Yeah, so they sort of start They have a bunch
[19:23] Speaker 7: of people from sort of the music industry who are
[19:26] Speaker 7: taking the stand in sort of talking about this. When
[19:28] Speaker 7: an artist starts, you know, they tend to start in
[19:30] Speaker 7: smaller venues like clubs, and then they move up to amphitheaters,
[19:34] Speaker 7: and then they move up to arenas, and then if
[19:36] Speaker 7: you're very, very popular, you move up to a stadium.
[19:38] Speaker 7: So the Justice Department's case is sort of focused on
[19:41] Speaker 7: those slightly smaller ones. The clubs, the amphitheaters, the arenas.
[19:46] Speaker 7: These are like places that have maybe like a thousand
[19:49] Speaker 7: to maybe twenty thousand seats, whereas a stadium is going
[19:52] Speaker 7: to have like forty to fifty thousand seats. So it's
[19:56] Speaker 7: focused mostly on those, So we're not going to be
[19:59] Speaker 7: here from people like you know, Beyonce or Taylor Swift,
[20:03] Speaker 7: although Taylor Swift's concert agent is supposed to testify. It's
[20:09] Speaker 7: mostly focused on like mid level artists. So the people
[20:13] Speaker 7: who are definitely testifying are Kid Rock, who has been
[20:16] Speaker 7: very interested in this case and is close friends with
[20:19] Speaker 7: President Trump, and then also one of the members of
[20:23] Speaker 7: the Mumford and Sons band is expected to testify. So
[20:27] Speaker 7: like artists along that sort of caliber who do a
[20:31] Speaker 7: lot of shows and can talk a little bit about
[20:33] Speaker 7: how you know, Live nations control over concert promotion has
[20:39] Speaker 7: really impacted where they end up performing.
[20:42] Speaker 1: So what is the court then being asked to decide here?
[20:45] Speaker 7: So there is a jury for this portion, and the
[20:47] Speaker 7: jury is being asked to descide first whether Live Nation
[20:50] Speaker 7: is a monopoly okay, and then second what if they
[20:53] Speaker 7: are a monopoly, what the damage amount per ticket is.
[20:57] Speaker 7: So there will be some testimony from all of these
[20:59] Speaker 7: people about Live Nation's conduct, and then there will be
[21:02] Speaker 7: some testimony from experts about how Live Nations conduct impacted
[21:07] Speaker 7: the price of tickets. Once the jury decides that, and
[21:11] Speaker 7: if they decide in favor of the government, the judge
[21:13] Speaker 7: would then take the jury's damage number and sort of
[21:17] Speaker 7: decide the overall damage number. So they're deciding per ticket,
[21:21] Speaker 7: he's deciding the overall number, and then he will also
[21:24] Speaker 7: decide whether there are any additional remedies needed. So that's
[21:27] Speaker 7: where the potential for a breakup comes in, because the
[21:29] Speaker 7: government has said, you know, we allowed this merger to
[21:32] Speaker 7: take place in twenty ten on the condition that Live
[21:35] Speaker 7: Nations sort of not engage in bad conduct, and they
[21:38] Speaker 7: have been doing that the whole time, and so really,
[21:40] Speaker 7: you know, we tried to allow this to go through.
[21:44] Speaker 7: It hasn't worked, and so what we really need now
[21:46] Speaker 7: is to break up this company.
[21:48] Speaker 5: So this might seem like an out of the left
[21:51] Speaker 5: field question, but I wonder how resaler ticket resalers like
[21:56] Speaker 5: stub Hub would somehow be involved with this. Are they
[21:58] Speaker 5: completely left out of this because that the damage was
[22:01] Speaker 5: already done by the person who originally bought the ticket
[22:03] Speaker 5: through Ticketmaster.
[22:04] Speaker 7: So most of the yes is focused primarily on what
[22:07] Speaker 7: we call the primary ticket market, so that's the very
[22:10] Speaker 7: first sale of the ticket, because the venue itself generally
[22:13] Speaker 7: picks the primary ticketer i e. Who is the first
[22:16] Speaker 7: person selling the tickets, But they don't have a lot
[22:18] Speaker 7: of control over what we call the secondary ticketing market,
[22:21] Speaker 7: i e. When you're reselling where you decide to do that,
[22:24] Speaker 7: the venue doesn't itself usually get involved. So there are
[22:30] Speaker 7: a bunch of concerns about the secondary market. There's some
[22:33] Speaker 7: legislation pending in Congress that's focused on that, but this
[22:36] Speaker 7: case is primarily about the primary ticket.
[22:39] Speaker 5: How how difficult will it be for the prosecution to
[22:45] Speaker 5: prove its case?
[22:47] Speaker 7: So I mean the standard is a preponderance of the
[22:50] Speaker 7: evidence because this is a civil case, right, But it's interesting,
[22:54] Speaker 7: like anti trust case, is by the time they get
[22:57] Speaker 7: to this point with the Justice Department bringing it to trial,
[23:01] Speaker 7: very often the Justice Department wins. They there's a pretty
[23:08] Speaker 7: high bar for the Justice Department to file a monopolization
[23:11] Speaker 7: case in the first place, and then you know, it
[23:13] Speaker 7: has to get past the motion to dismiss, it has
[23:16] Speaker 7: to get past summary judgment. This one is pretty interesting
[23:19] Speaker 7: because it's pretty rare actually for anyst cases to go
[23:22] Speaker 7: before a jury. The only reason it's actually before a
[23:26] Speaker 7: jury is because of the damage's portion. But you know,
[23:29] Speaker 7: the Justice Department was very interested in getting this before
[23:32] Speaker 7: a jury because these are the people allegedly who have
[23:35] Speaker 7: been harmed by this conduct, right, the peers that they are, Yeah,
[23:38] Speaker 7: they are like the people who might have actually gone
[23:40] Speaker 7: to a concert. Live Nation a little bit earlier last
[23:43] Speaker 7: week actually tried to insist that if you had ever
[23:47] Speaker 7: bought a ticket through ticket Master, you were ineligible to
[23:50] Speaker 7: be on the jury, and the judge actually throughout that
[23:52] Speaker 7: request because he felt that they would have been impossible
[23:55] Speaker 7: to actually seat a jury.
[23:57] Speaker 1: Yeah, if one of the requirements was that you had
[23:59] Speaker 1: never bought.
[24:00] Speaker 7: A concert ticket online. Yeah, so it's entirely possible that
[24:04] Speaker 7: these people have used Ticketmaster's product before. But you know,
[24:09] Speaker 7: in order to be seated on the jury, they had
[24:11] Speaker 7: to insist that they could be impartial and fair, and so,
[24:14] Speaker 7: you know, we'll see what they say. You know, juries
[24:18] Speaker 7: juries much more frequently find for anti trust plaintiffs. So
[24:23] Speaker 7: it's interesting that Live Nation wanted to take this gamble.
[24:27] Speaker 1: It really is.
[24:28] Speaker 5: And at some point there is going to be let's say,
[24:31] Speaker 5: if they find in favor of the Department of Justice
[24:34] Speaker 5: there is a chance that Live Nation.
[24:37] Speaker 1: Might have to be broken up. What would that even
[24:39] Speaker 1: look like?
[24:41] Speaker 7: So the Justice Department and the state ags say that
[24:44] Speaker 7: in this case, they don't think it would be that
[24:45] Speaker 7: hard because these used to be separate companies, and in
[24:50] Speaker 7: their view, you know, this is now a vertically integrated company.
[24:53] Speaker 7: Live Nation does the concert promotions, that is, the all
[24:57] Speaker 7: of the logistics behind having a live music event, whereas
[25:01] Speaker 7: Ticketmaster is a ticketing service. It is you know, like
[25:05] Speaker 7: primarily a website that integrates with like websites of venues.
[25:09] Speaker 7: So these two things don't have to go together, and
[25:13] Speaker 7: therefore it would not, in their view, be necessarily that
[25:16] Speaker 7: difficult to separate them.
[25:18] Speaker 5: So it would just go back to what it was
[25:20] Speaker 5: before twenty ten. Live Nation and Ticketmaster. Here's your tickets
[25:24] Speaker 5: and here's your venue.
[25:25] Speaker 7: Yes, that's the idea of the Jasice Department. It would
[25:27] Speaker 7: separate these two things into two companies and they would
[25:30] Speaker 7: just go back to the way that they had done
[25:31] Speaker 7: business before.
[25:32] Speaker 5: Okay, we're going to watch and see how this develops.
[25:34] Speaker 5: Right along with you, Liah Thank you so much for
[25:36] Speaker 5: talking to it.
[25:37] Speaker 7: Thank you for having me.
[25:38] Speaker 5: Bloomberg News anti trust reporter Leah Eylan. And just ahead,
[25:41] Speaker 5: we're going to take a look at one major business
[25:44] Speaker 5: they haven't had to worry about anti trust issues at all.
[25:46] Speaker 5: That's the great American pastime of baseball. How did they
[25:50] Speaker 5: get past that? I'm Ami Morris in for Jin Grosso,
[25:53] Speaker 5: and this is Bloomberg.
[26:01] Speaker 2: You're listening to Bloomberg Law with June GROSSEO from Bloomberg Radio.
[26:07] Speaker 1: You're listening to.
[26:07] Speaker 5: The weekend edition of Bloomberg Law. I'm Amy Morris filling
[26:10] Speaker 5: in for June Grosso. June is off this week. Major
[26:13] Speaker 5: League Baseball is a massive organization and is exempt from
[26:18] Speaker 5: federal antitrust law. Now this week, the Supreme Court refused
[26:21] Speaker 5: to hear an appeal to challenge this long standing exemption.
[26:25] Speaker 5: Why the MLB Players Association is fighting to change it.
[26:28] Speaker 5: We get more on the history of this and why
[26:30] Speaker 5: the MLB Players Association is fighting to change it with
[26:33] Speaker 5: Martini Dell, co chair of Golston and Stores, Sports law
[26:37] Speaker 5: practice and adjunct professor at Columbia Law School. Okay, Martin,
[26:41] Speaker 5: thank you so much for joining us today.
[26:43] Speaker 6: Amy, thank you so much for having me.
[26:46] Speaker 5: The High Court called this exemption and aberration. It's clearly unusual.
[26:51] Speaker 5: Why is baseball so special?
[26:54] Speaker 3: Well, but spaceball is magical in many ways because it
[27:01] Speaker 3: stirs everyone's imagination. People from the farmlands joined baseball when
[27:08] Speaker 3: it first started. It became a path for immigrants to
[27:13] Speaker 3: become part of American society, and it's easy to understand
[27:19] Speaker 3: the basics, not the real strategy, but the basics. So
[27:23] Speaker 3: it tends to appeal to everyone. And in that way,
[27:27] Speaker 3: it is different than many sports, but the same as
[27:32] Speaker 3: many other sports, at least economically and perhaps legally, except
[27:37] Speaker 3: as we're about to get into.
[27:38] Speaker 5: Okay, let's talk about that. Why was this exemption created
[27:42] Speaker 5: for baseball in the first place.
[27:44] Speaker 3: You have to go back to nineteen twenty two when
[27:47] Speaker 3: the Supreme Court US Supreme Court first looked at baseball
[27:52] Speaker 3: and whether it was subject to the antitrust laws. Now
[27:56] Speaker 3: put yourself in the timeframe. In nineteen twenty two, the
[28:00] Speaker 3: GIS had just come back from World War One and
[28:04] Speaker 3: had lots of cash to spend, particularly on leisure topics.
[28:09] Speaker 3: You had a Supreme Court which had a very cramped
[28:13] Speaker 3: view of the Commerce clause, tending to restrict its availability,
[28:20] Speaker 3: and you had the Black Sox scandal by nineteen twenty two.
[28:26] Speaker 3: So you put these three things together. And the Supreme
[28:29] Speaker 3: Court looks at baseball in nineteen twenty two, and it
[28:32] Speaker 3: dealt with an ownership dispute at the time, and an
[28:37] Speaker 3: opinion written by none other than Oliver Wendell Holmes, one
[28:40] Speaker 3: of the great jurists on the Supreme Court, he decided
[28:44] Speaker 3: that baseball for the Court. He decided baseball was an
[28:48] Speaker 3: exhibition that was not involved in interstate commerce and therefore
[28:53] Speaker 3: was exempt from the antitrust laws because, as we know,
[28:58] Speaker 3: Congress gets its power to regulate from Article one, Section eight,
[29:03] Speaker 3: the Commerce clause. If you're not in commerce, Congress can't
[29:07] Speaker 3: regulate that type of activity. So that was the start
[29:11] Speaker 3: of the baseball exemption. I must say it made little
[29:15] Speaker 3: sense in nineteen twenty two, and as I'm sure we'll
[29:18] Speaker 3: get into, it makes even less sense one hundred and
[29:20] Speaker 3: four years later.
[29:21] Speaker 5: Well, I was going to say, maybe in nineteen twenty
[29:24] Speaker 5: two it wasn't interstate commerce, but today it's worldwide. It's
[29:28] Speaker 5: America's pastime. So how has it managed to survive any
[29:34] Speaker 5: challenges for these changes?
[29:36] Speaker 3: So what we've had is the Supreme Court has looked
[29:39] Speaker 3: at the baseball exemption two more times after nineteen twenty two,
[29:43] Speaker 3: once in nineteen fifty three in a case called Tulsen
[29:46] Speaker 3: against the New York Yankees, where mister Toulson was claiming
[29:52] Speaker 3: that something called the Baseball Reserve Clause was an anti
[29:56] Speaker 3: trust violation. It restricted players to particular teams and didn't
[30:01] Speaker 3: give them any mobility to move to another team, such
[30:03] Speaker 3: as we now see in free agency. And the Supreme
[30:07] Speaker 3: Court looked at this case six sentence decision. It was
[30:12] Speaker 3: called per cureum because it was by the Court no
[30:15] Speaker 3: individual author and in six sentences the Supreme Court said,
[30:20] Speaker 3: star a decisives, we had decided this thirty one years ago,
[30:25] Speaker 3: and therefore there's no reason to change. Congress could have
[30:28] Speaker 3: acted to eliminate the baseball exemption and did not do so.
[30:34] Speaker 3: So that's the end of it. Then in nineteen seventy
[30:37] Speaker 3: two we have Supreme Court looking at it again in
[30:40] Speaker 3: a case called Flood against Qune. This is sometimes referred
[30:44] Speaker 3: to as the Kurt Flood case. And what happened there
[30:47] Speaker 3: you now had a five to three decision by the
[30:50] Speaker 3: Supreme Court. The major decision was written by Justice Blackman.
[30:57] Speaker 3: For those who like elegance of language. The first third
[31:01] Speaker 3: of his decision is this great elegy to the game
[31:04] Speaker 3: of baseball. The second third of his decision is based
[31:08] Speaker 3: on Kurt Flood's outstanding statistics as a as the premier
[31:12] Speaker 3: center fielder of his time, and the third third of
[31:16] Speaker 3: his decision was, Hey, this is an aberration, but it's
[31:21] Speaker 3: our aberration. And while there's something to be said for consistency,
[31:26] Speaker 3: even when it's layered in inconsistencies, we're going to uphold
[31:32] Speaker 3: the baseball exemption. Congress hasn't stepped in. There's been what
[31:37] Speaker 3: the Court called positive inaction, and therefore baseball exemption stands
[31:44] Speaker 3: sounds quite Ralph Waldo Emersonian in its scope.
[31:49] Speaker 5: So it sounds like also because the Supreme Court opted
[31:52] Speaker 5: not to take up this case, that what did you
[31:55] Speaker 5: call it? The at the inaction positive inaction. Positive inaction
[32:01] Speaker 5: remains correct.
[32:04] Speaker 3: And since nineteen seventy two, we've seen a whole bunch
[32:07] Speaker 3: of developments. We've had on the congressional front. Congress in
[32:12] Speaker 3: nineteen because it's nineteen ninety seven or nineteen ninety eight,
[32:16] Speaker 3: passed something called the Kurt Flood Act. Unfortunately, Kurt Flood
[32:20] Speaker 3: had passed away before Congress enacted this and President Clinton
[32:24] Speaker 3: signed it into law that said that baseball players for
[32:30] Speaker 3: Major League Baseball had the right to sue under the
[32:34] Speaker 3: anti trust laws. Of course, by that time it didn't
[32:37] Speaker 3: matter much because baseball had developed a union, the Major
[32:42] Speaker 3: League Baseball Players Union and the Major League Baseball players
[32:47] Speaker 3: major League Baseball owners had negotiated a collective bargaining agreement.
[32:52] Speaker 6: Where you have a collective.
[32:53] Speaker 3: Bargaining agreement, the labor law takes precedence over the anti
[32:57] Speaker 3: trust laws, and so there is no such thing as
[33:01] Speaker 3: an antitrust violation for player disputes as long as there
[33:05] Speaker 3: is a collective bargaining relationship. So it was a stop
[33:10] Speaker 3: to unfortunately at that time the deceased mister Flood. But
[33:17] Speaker 3: it didn't matter much. You had a whole bunch of
[33:20] Speaker 3: lower court cases coming up challenging the scope of the
[33:24] Speaker 3: baseball exemption. Why, because this exemption did not apply to
[33:28] Speaker 3: any other sport. The Supreme Court and all lower courts
[33:32] Speaker 3: it held foot professional football, professional hockey, professional basketball, theatrical
[33:39] Speaker 3: exhibitions you named the type of entertainment form the Supreme
[33:45] Speaker 3: Court and the lower courts have held their subject to
[33:47] Speaker 3: the antitrust laws, not so for the great game of baseball.
[33:51] Speaker 3: So lower courts tried to limit the scope, and ultimately
[33:57] Speaker 3: they found that the circuit courts of a peaces did
[34:01] Speaker 3: not agree and held that baseball is subject to the
[34:06] Speaker 3: antitrust is not subject to the anti trust laws because
[34:09] Speaker 3: of the exemption.
[34:11] Speaker 5: So in this case, if this appeal had been successful,
[34:15] Speaker 5: how would that change major League Baseball, how we experience
[34:19] Speaker 5: it as fans, how it actually is run as an organization.
[34:24] Speaker 3: I think the answer is not much. So what we're
[34:28] Speaker 3: talking about is the Congray Harrow's decision that where the
[34:32] Speaker 3: Supreme Court last week last week earlier this week sorry
[34:36] Speaker 3: denied a petition for rid of cerchiary. What that affects
[34:40] Speaker 3: is not major League Baseball, but the minor leagues. This
[34:45] Speaker 3: involved Puerto Rican baseball leagues and were they subject to
[34:50] Speaker 3: the same baseball exemption where the players they are subject
[34:53] Speaker 3: to the same baseball exemption. The first Circuit Court of
[34:57] Speaker 3: Appeals held the baseball exemption apply and therefore it seemed
[35:01] Speaker 3: to expand it beyond the scope of what the Supreme
[35:05] Speaker 3: Court had held three times applied to Major League baseball,
[35:09] Speaker 3: So the effects would be two minor leagues, non sanctioned leagues.
[35:16] Speaker 3: And as I'm sure you're going to ask me, the
[35:18] Speaker 3: NCAA right exactly.
[35:20] Speaker 5: I was stopping other organizations like the NCAA because I
[35:23] Speaker 5: keep thinking about things like name and image and likeness
[35:27] Speaker 5: and the portal and how students are now able to
[35:30] Speaker 5: lobby for more money, which was unheard of back in
[35:34] Speaker 5: my day. So what's stopping other organizations like the NCAA
[35:38] Speaker 5: from lobbying for this type of an exemption?
[35:41] Speaker 6: So great question, and the answer is they are lobbying
[35:44] Speaker 6: for exemption.
[35:47] Speaker 3: I can't tell you every day, but the NCAA has
[35:51] Speaker 3: lobbyists who are going to Congress on a regular basis
[35:55] Speaker 3: and claiming that the NCAA should be exempt, at least
[35:59] Speaker 3: in some of its activities from the scope of the
[36:01] Speaker 3: anti trust laws. The principal reasons given by the NCAA
[36:06] Speaker 3: are one money and two money. And the reason for
[36:11] Speaker 3: this is anti trust laws are so anti trust lawsuits
[36:15] Speaker 3: are so expensive and take so much time and divert
[36:19] Speaker 3: energy that they in fact divert attention from the scope
[36:24] Speaker 3: of the activities that the parties want to engage in
[36:28] Speaker 3: and take on a life of their own.
[36:31] Speaker 1: How does that not apply to baseball?
[36:33] Speaker 6: Though it would but for these three Supreme Court.
[36:37] Speaker 1: Cans Okay, okay, okay.
[36:40] Speaker 5: So what happens now there have been challenges, they get
[36:44] Speaker 5: shot down, or they're not hurt at all. Is this
[36:48] Speaker 5: just the way it is? Baseball has this antitrust exemption.
[36:53] Speaker 6: So the answer is.
[36:56] Speaker 3: Yes and no. That's my legal and lawyerly type answer. Yes,
[37:03] Speaker 3: because we have three Supreme Court cases which uphold the
[37:06] Speaker 3: baseball exemption. Lower courts can't change that. What can change
[37:11] Speaker 3: that is Congress. If Congress wanted to jump into the fray,
[37:16] Speaker 3: and that's in effect why the NCAA is lobby in
[37:18] Speaker 3: Congress now it can create exemptions to the anti trust laws.
[37:24] Speaker 3: The antitrust laws are congressional laws, they're not constitutional laws,
[37:29] Speaker 3: and they can be changed by Congress or modified by Congress.
[37:34] Speaker 3: So that's one avenue. Another avenue would be if the
[37:38] Speaker 3: Supreme Court weighed.
[37:40] Speaker 6: In again, which doesn't look likely.
[37:44] Speaker 3: It's had ample opportunity over the last fifty four years
[37:49] Speaker 3: since the floodcase was decided and it's chosen not to
[37:52] Speaker 3: do so. So those are the two areas. A third
[37:56] Speaker 3: area may be private parties. If, for instance, Congrey Harrows
[38:03] Speaker 3: decided to develop a collective bargaining relationship with its players
[38:10] Speaker 3: and the players would unionize and then perhaps be subject
[38:13] Speaker 3: to the scope of the National Labor Relations Act, they
[38:17] Speaker 3: could then bargain without the sort of damocles of an
[38:20] Speaker 3: antitrust suit hanging over their heads because the anti trust
[38:24] Speaker 3: laws would be superseded by the collective bargaining relationship.
[38:28] Speaker 1: Marty, we're going to leave it there. Thank you so
[38:30] Speaker 1: much for taking the time with us. This is fascinating, Amy.
[38:33] Speaker 6: Thank you so much for having me. I've really enjoyed myself.
[38:36] Speaker 5: Marty Adell is co chair of Gulston and Stores Sports
[38:39] Speaker 5: Law Practice. And that does it for this edition of
[38:42] Speaker 5: Bloomberg Law. Subscribed to the Bloomberg Law podcast on Apple, Spotify,
[38:46] Speaker 5: or wherever you get your podcasts so you never miss
[38:48] Speaker 5: an episode. I'm Amy Morris in for June Grosso. This
[38:52] Speaker 5: is Bloomberg. Stay with us.
[38:53] Speaker 1: Today's top stories and global
[38:55] Speaker 5: Business headlines are coming up right now.

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