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Live Nation Wants Artist Contracts Kept Confidential in Senate Probe – Billboard

Live Nation officials are at an impasse with a powerful Senate subcommittee over demands that the concert promoter hand over confidential emails, contracts and memos detailing sensitive information about artist compensation.

Attorneys for Live Nation say they have already turned over more than 10,000 documents to investigators working for Sen. Richard Blumenthal (D-Conn.) and the Permanent Subcommittee on Investigations, or PSI, which Blumenthal chairs. Live Nation in-house counsel Dan Wall wrote on Live Nation’s corporate blog on Tuesday (Nov. 21) that the company is willing to hand over more sensitive documents if the PSI agrees to confidentiality protections to ensure the information is kept out of the public domain.

So far, Blumenthal has refused to agree to any restrictions requested by Live Nation and issued a subpoena for the confidential documents on Nov. 16. Live Nation officials plan to challenge the subpoena in court and are preparing for a lengthy legal battle to protect the confidentiality of its artist contracts if the two sides can’t reach an agreement.

“It is only in a subpoena enforcement action [before a federal judge] that Live Nation can assert its rights to protect the confidentiality of this information,” Wall wrote in the blog post.

Live Nation’s insistence on “confidentiality protections” is fairly routine, most legal experts agree, especially when it comes to court proceedings or investigations by government agencies. It’s also common practice for congressional investigators to agree to confidentiality rules while collecting evidence for congressional inquiries, but there’s no legal recourse if a member of Congress or staff discloses confidential information to the public.

News on Monday (Nov. 20) that Live Nation was being investigated by the powerful Department of Homeland Security and PSI surprised many music industry insiders. Created by President Harry Truman in 1941 to investigate wasteful defense spending after World War II, the PSI’s focus for much of its existence has been on matters of national security, including Korean War atrocities, the American Mafia’s influence on major labor unions and the government’s response to Hurricane Katrina.

Under Blumenthal’s leadership, the PSI has shifted its focus to consumer-oriented investigations, like the proposed merger of the PGA and the Saudi-backed LIV Golf league, equity within Medicare Advantage and sexual abuse in federal women’s prisons.

Blumenthal has also long been a critic of Live Nation and its 2010 merger with Ticketmaster, calling for the two companies to be split apart during a high-profile Senate hearing in January. According to a Nov. 16 letter from Blumenthal to Live Nation CEO Michael Rapino, the PSI officially began investigating Live Nation in March, in part for what Blumenthal calls “failure to combat artificially inflated demand fueled by bots in multiple, high-profile incidents, which resulted in consumers being charged exorbitant ticket prices.”

That description is the only public hint of what PSI is focusing on in its Live Nation investigation and doesn’t seem particularly damning of the concert promotion company. While bots, often operated by scalpers, do inflate demand for tickets — especially during high-profile onsales — and can lead to exorbitant ticket prices, it’s almost always Ticketmaster’s competitors in the secondary market who stand the most to gain.

Before Live Nation hands over any documents that contain “highly sensitive client information about artists, venues and others with whom we deal,” Wall wrote in the blog post, the company wants “binding confidentiality protections to prevent its misuse.”

Live Nation’s request might prove more difficult than the company’s leadership realizes, says Andrew Olmem, attorney and partner at Mayer Brown, which specializes in defending clients targeted by major investigations and congressional inquiries.

“Any documents provided to Congress are always vulnerable to public disclosure,” Olmem explains, noting that Congressional members and their staffers enjoy broad protections against criminal and civil liability under the U.S. Constitution’s speech and debate clause.

It is common for attorneys of clients targeted by Congressional inquiries to negotiate terms of documents’ use with investigators requesting the information, Olmem says. Many investigators, he adds, care deeply about reputational trust, knowing that violating confidentiality agreements with targets could make future targets less willing to voluntarily cooperate with document requests and significantly slow down investigations.

“But even if you secure such an agreement, members of Congress and their staffs can’t be liable for releasing confidential documents as part of their official legislative duties, such as submitting (the documents) into the congressional record or reading them on the House or Senate floors for the purpose of informing a legislative debate,” Olmem continues. “There are many circumstances in which members and their staff are incentivized to leak and do leak information for political purposes without consequences.”

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