Landlords Cash In On Concert Demand As Live Nation Squeezes Small Venues

Taylor Swift’s Eras tour sold almost 4.4 million tickets across 60 dates and grossed approximately $1.4B through mid-March. Beyoncé’s Renaissance tour raked in more than $579M, with more than 2.7 million tickets sold. 

The post-pandemic focus on experiential retail has put a spotlight on music venues as drivers of foot traffic that increase dwell time. While not every music venue is equipped to host generational icons, the U.S. concert industry is a $36B market and growing, and commercial real estate landlords want a piece of the action. 

But independent operators, who anchor retail districts across the country, say they are being squeezed by entertainment behemoth Live Nation, and the Department of Justice has begun a push to break the company up. 

Live Nation reported its biggest year ever in 2023, with more than 145 million tickets sold and $9B in sales from just the year’s top 100 tours. First-quarter earnings posted last month pointed to another record year, according to the company, with revenue up 21% year-over-year to $3.8B. 

Meanwhile, independent venues are struggling to stay afloat. The Music Venue Trust, a British charity group, said 2023 was “the most challenging year for the Grassroots Music Sector” since the trust's 2014 founding. The group’s members totaled 960 venues across the UK at the start of the year. That figure had fallen to 835 by year’s end. 

Live Nation has been growing its footprint through exclusive partnerships, venue acquisitions and ground-up development. The push into operations has left independent owners nervous, fearing the company’s venues will get preferential access to artists and performers. 

Independent music advocates said they have watched as anticompetitive practices by Live Nation after it has a presence in a city have dragged down ticket sales and threatened small owners.

“Within six months of the Live Nation venue opening in Des Moines, [Iowa,] we saw at least two venues close,” said Jamie Dunphy, the chair of the music policy council at the nonprofit advocacy group MusicPortland. “The overall volume of ticket sales broadly in the economy has decreased, with the options being to go see a local musician and you pay $10 or $15, or you go see Bad Bunny and you pay $450.”

Live Nation owned 338 venues worldwide as of September. The top 100 amphitheaters in the world include 88 in the United States, 56 of which were operated by Live Nation at the end of 2022, according to the American Economic Liberties Project. Ticketmaster was the sole ticketer for 77 of those 100 amphitheaters, which brought in $814M in ticket sales in 2022 alone.   

Live Nation disputes the notion that it has any undue influence over the concert space. A spokesperson for the company referred Bisnow to a statement posted online in response to the DOJ investigation, declining to comment further.  

“There is more competition than ever in the live events market,” the statement says, adding Ticketmaster's market share and profit margins have been declining. “Our growth comes from helping artists tour globally, creating lasting memories for millions of fans, and supporting local economies across the country by sustaining quality jobs.” 

Live Nation also published an extensive response to the federal lawsuit calling for the company to be broken up, saying it hasn’t contributed to higher ticket prices and is part of a competitive marketplace. 

But industry professionals who spoke to Bisnow described a company that is notorious for leveraging its power to retaliate against venue operators who step out of line. 

“They will actively go after other venues to try to put them out of business or acquire them,” Dunphy said. 

Live Nation has grown to control nearly every corner of the live entertainment industry, its detractors, including the Department of Justice, have alleged. The company has significant leverage not just in venues and ticketing but also promotion and artist availability.

Venue owners use Ticketmaster to sell tickets and promote shows that were booked through a Live Nation management agreement for a tour presented by Live Nation. If Live Nation opts to open a new venue nearby or if an owner uses a competing service, their ability to book talent could be impacted.

An owner of several music venues in the Midwest that book Live Nation acts told Bisnow that the entertainment giant will reduce the number of shows it allots to certain venues if their owners work with unapproved vendors or otherwise buck Live Nation's exacting preferences. 

“It's just like, ‘We gave them 15 shows last year. Let's just take that down to six. We’ll see if they don't fall back in line,’” said the owner, who requested anonymity out of fear of reprisal from Live Nation. “There's no doubt that they have market power and that they use it quite effectively, to tell you the truth.”

Live Nation plans to open at least 12 new venues globally by the end of 2025 as it continues its vertically integrated growth while heading into what is expected to be a protracted legal battle as part of the antitrust investigation from the DOJ and civil suits from 30 U.S. states. 

Its dominance in the promotion space extends well beyond worldwide phenomena like Beyoncé and Swift, to acts that sell out theaters and bars rather than arenas and stadiums. 

Live Nation promoted 50,059 concerts in 2023, nearly 10,000 more shows than it promoted in 2019. More than 145 million people attended a Live Nation event in 2023, up from 98 million in 2019.

That’s why Dunphy at MusicPortland is spearheading an effort to stop Live Nation from partnering with a developer to build a 4,000-seat venue as part of a development deal with Portland, Oregon's economic development agency. 

The project was first proposed as a makerspace in 2017, and it wasn’t until 2022 that the plans for a Live Nation venue surfaced. Local musicians and music fans balked, saying the venue would stifle competition and threaten the historic venues that have defined Portland's music scene. 

Nashville’s small-venue operators have complained they are being forced out of business by rising real estate prices and competition from corporate venues. Austin has created an $8M grant program to offer musicians, promoters and venue operators up to $10K to keep their businesses running. 

Venue operators in Des Moines shuddered when Live Nation opened its 3,300-person Vibrant Music Hall in December, fearing they would lose access to some of the acts they would have booked, as Live Nation prioritizes its own location. 

Beam Development and Colas Development Group, the two local firms that won the bid for the Portland site, are working with MusicPortland to try to find an independent operator or win concessions from Live Nation that it believes will help maintain a competitive music marketplace in the city. 

“They’re open to the conversation,” Dunphy said. “They just need to see the dollars and see it actually pencil, because it's really hard to get financing right now.”

Anjee Solanki, Colliers’ San Francisco-based national director of retail services, stressed how important the ability to impact financing is for developers in today’s high-interest-rate environment. That can determine which companies are selected to operate venues at new projects.

“It’s all about credit today, credit, credit, credit,” Solanki said. “Strong credit, as well as a strong brand, and then the icing on that cake will be that the landlord doesn't have to invest as much capital.” 

Music venues, along with event venues like Time Out Market or Punch Bowl Social, are prime retail tenants for larger developments because they can act as a nighttime anchor the same way a grocery store can anchor a strip mall during the day, Solanki said.

“When we look at dwell time, you start to see a drop at 8 p.m. because everyone's heading home. You see that drop seven days a week,” she said. “But what if you were to capture that?” 

Regardless of a development's size, live entertainment is seen as an increasingly important piece of its puzzle. 

Solanki’s team represents Ole Red, a music venue and restaurant brand launched by country star Blake Shelton. That kind of multistory, 5,000-plus-seat experience works well at a retail center that is larger than 2M SF, she said, because those properties tend to be anchored to a sports arena or other attraction that draws tourist traffic. 

Landlords at properties larger than 750K SF look to bring music to their sites by partnering with a hospitality company that has experience running restaurants with a live music component, Solanki said. Owners of smaller retail centers look to lure shoppers by hiring local talent to play in public spaces. 

The Wharf in Washington, D.C., was designed to do all three.

The $3.6B project, completed in 2022, includes 1,490 residences across seven towers, 300K SF of retail, four hotels and 18 acres of open space. City officials wanted the public-private partnership to include some civic components, and ideas for an art museum or planetarium were floated. 

Monty Hoffman, the founder of Hoffman & Associates, which co-developed The Wharf, recalled that his firm included an aquarium in its winning proposal as part of the public bidding process for the waterfront site in Southwest D.C. But Hoffman said he knew he could create a more vibrant destination with live music.

“What I love about the music venues in particular, they kind of just make people happy,” he said. “It's like hometown sports or something. There's this spirit, this soul that's with it, and it's hard to monetize it.”

It took years to convince city officials that a music venue was the right choice to create a popular riverfront destination, Hoffman said, but he ultimately succeeded. The Wharf pulled in 8 million visitors last year, he said, while the entire city attracted 26 million tourists.

The Wharf includes a 6,000-seat venue called The Anthem, which was christened with a Foo Fighters concert, along with Union Stage's 450-person capacity and Pearl Street Warehouse, which can hold up to 300 people. Free concerts happen on a pier bandstand every Wednesday in the summer. 

Hoffman made a deal to operate The Anthem with I.M.P. Concerts, a local promoter that runs iconic Washington, D.C., spaces like the 9:30 Club and Merriweather Post Pavilion. Still, tickets for The Anthem are sold on Ticketmaster, and Live Nation-led tours are frequently the acts playing at the venue. 

“Live Nation was an obvious option, but I decided to go with I.M.P. because they were really the hometown promoter,” Hoffman said. “It felt more authentic.”

CORRECTION, JUNE 12, 3:30 P.M.: A previous version of this story incorrectly identified the producer of Taylor Swift's Eras tour. The story has been updated.