Hello everybody, and thank you so much for joining us for this special edition of Bloomberg Daybreak. US markets are closed for the President's Day holiday. I'm Nathan Hager. Coming up this hour. We'll look ahead to a couple of major lawsuits on the docket. Elon Musk's battle against Open Ai and the Justice Department's case against Live Nation and ticket Master. We'll break them down with two of our litigation analysts from Bloomberg Intelligence, Matthew Shettenhelm on big tech
and Jennifer Ree on Big ticket. Plus, we have a big earnings report coming up from AI Behemoth and Nvidia BI analyst man Deep Singh and Kunjohn Sapani will be along to preview those results. Before that, though, we hear from the world's biggest big box retailer this week, Walmart, reports earnings on Thursday. Here to get a set for that report, our Bloomberg Intelligence senior analyst Jennifer Bartashis who covers retail staples, and Punam Goyle, who's got things covered
on the e commerce side. Thanks to both of you for being with us, and you know, coming off the flat retail sales report for decent number that we saw recently Jennifer, I'll start with you, how does that affect what we could see from Walmart when it comes to the earnings this week.
You know what's interesting is that for Walmart, it doesn't matter so much what the retail sales do just because the trends that are in place have really been conducive to their growth and their business. People are seeking value, People are seeking, you know, ways to streamline their time and find convenience, and Walmart just seems to be gaining
share based on their ability to offer that to their customers. So, regardless of the macro environment, Walmart really seems to be thriving at the moment.
And put them to bring you into the conversation, We're seeing a lot of consumers seeking out Walmart's business on the e commerce side as well. How could that play out into these earnings?
We think Walmart will continue to do well on the e commerce side. If Amazon is any reflection on how the consumer is shopping online, they had great numbers on the retail side, high single digit sales growth in their online business. We expect Walmart to be no different. They've put a lot of investment behind their e commerce unit and they have been very quickly gaining share. Its over one hundred billion dollars in GMB today. That's pretty impressive
given how little time they've gotten there. So we think the e commerce handle for them will play out while just like it did for Amazon.
You know, it's interesting, Jen, Walmart is seeing competition from Amazon on multiple fronts, not just on the e commerce side, but Amazon is kind of altering its footprint in the grocery business as well. How do you see Walmart weathering that well?
I think what's interesting is that, you know, when Amazon announced that they were closing their Amazon Fresh stores and their Amazon Ghost stores, which was more of a convenience store format. You know, people kind of set up and took notice, but it's important to remember there were way under one hundred of those stores altogether, so it's never
been the majority of Amazon's grocery footprint. Instead, you know, they have a lot of sales that are what you would consider grocery category sales that happen through Amazon dot Com and through their Amazon Fresh and so those are your your fresh items, as your paper towels, things like that. Walmart is the biggest grocer in the United States. You know, they own almost thirty percent of market share, so they're very well entrenched and because they've been investing in their capabilities.
You know, I think there's room for Amazon to grow, but we're not expecting any kind of major, you know, change in who's the leader in grocery over the next couple of years.
You got to think to put them that Walmart's got room to grow overall on e commerce as well. Although Amazon being the behemoth it is, what's the challenge for Walmart to compete online?
I don't think it's really a challenge anymore because they're making the right investments. They're investing like just they're investing in product and expanding their marketplace. You know, a lot of times people tend to think that if Walmart wins, Amazon loses, that's not the case. I think both of them can grow together. There's a lot of share shifts that are taking place in retail where shopping is just
gradually moving online. We have estimated that twenty five percent of total retail sales in the US are online today and they're going to be growing to thirty three percent in the next few years. So there's plenty of opportunity for retailers to capture that growing opportunity and among them, Walmart and Amazon are still probably best position to do so.
And when it comes to the overall business, Jen, is it all about grocery for Walmart? Is that where the basis for Walmart's businesses right now? Or is it seeing the potential for growth across its categories of items that it sells?
Now, there's definitely growth across all of the categories. You know, grocery categories do you comprise about half of Walmart's total revenue, so it is important. But you know, the company does a great job of of having that broad assortment be tailored to be appealing to customers. And that's in the US and that's worldwide. And so you know what we see is that, you know, grocery is great because it's
a frequency category. You buy groceries frequently. It takes you to stores, but once you're in the store or once you're online, placing that order between either the in store experience, the merchandise selection, or the technology that's used from a from an interface perspective, it's really helping guide people to buy more than just their groceries at Walmart, and so you know, they've had strong, much stronger general merchandise sales than some of their peers over the last last few
quarters and.
Put them how do you see Walmart continuing to grow its business on the tech side in terms of developing its interfaces integrating artificial intelligence into what it does.
I think, just like everyone else today, the integration of artificial intelligence agentic shopping is key. Walmart's integrated itself into chat GBT, so it's clearly opening up avenues to broaden its customer base and get a piece of that agentic AI shopping driven conversion. We think they're making advancements to broaden their customer base beyond you know, when you think about the Walmart customers, it is broad and it is
a customer predominantly that's seeking value. But they're trying to expand that and they have to some extent, and Jen could talk about this, have really expanded that through the Walmart Plus membership. But in using AI and agentic shopping and just technology robotics automation, we think they are making progress and they will continue to invest in that front to move forward in retail because if they don't, quite honestly, they won't be able to continue to gain share.
I'm speaking with Punum Goyle and Jen Bartascius of Bloomberg Intelligence. Jen pickop to that point that Punam raised there in terms of the Walmart Plus business, there has been this push into more subscriber fed business. How is that paying off for Walmart?
Yeah, it's it's a it's a great program for Walmart. When you think about what Walmart has been talking about and over the past several quarters, they've been bringing in more higher income households into their ecosystem. Now, part of that is people seeking value, but the Walmart Plus program, when they get people engaged with that, that makes people sticky. And so historically, when the economy has been weak, Walmart gains people, they gain shoppers, but then as the economy
gets better, some of those customers bleed away. What Walmart Plus does is it helps keep all of those customers sticky and in the in the Walmart universe, and through the offering of convenience of being able to have things delivered to your house or even into your house and into your refrigerator directly, or being able to pick things up at the at the curb side, and all the their perks and benefits that they offer via that membership program.
It really helps keep those customers you know, engaged, and it provides a recurring revenue source in terms of membership fee. So there's there's lots of levels to the win of having a robust program like Walmart Plus.
And in terms of the value seeking customer getting into that engagement as well. Poonam, do you see that trend continuing having some of these more higher middle income consumers getting driven more into Walmart to seek that value.
Yeah. I don't think that changes much for the lower end customer. I mean, at the end of the day, Walmart stands for value, so everyone wants to find things cheaper. I don't think a higher income consumer would go out and say I'm willing to pay more unless there's a service element to it, or there's an aesthetic involved or a better brand involved. But I think having a broad array of customers which Walmart is now targeting to expand that upper end of the funnel, it doesn't hurt them.
And it's an easy way to do that because when you're on an online platform, the experience is similar to all versus you know, people would argue in the past when you walk into a Walmart store, the experience is very different. Than when you were to walk into a whole food store, right, But if you're shopping online for paper towels, it's wherever you're used to going. And that's
what Jen talked about the stickiness of it. Right when you're a Prime member, you're a Walmart Plus member, because you're paying for this membership, you want to utilize it. And once you begin to utilize it and see the value in it, that's just a natural place that you're going to go to next.
You know, Jen, this is an interesting time in the big retail business with a lot of these sort of businesses that we think of as catering to the lower end consumer, like Dollar Tree, Dollar General moving into some of these bigger markets and target continuing to try to find a direction. How do you see Walmart sort of navigating some of that perhaps increased competition from the lower end retailers.
Yeah, it's it's a it's a very good question. You know, when when you look at the customer that the the organizations that target the lower end consumers, like your dollar stores, you know, in terms of store base, those those companies tend to be located in greater proximity to some of the you know, to some of those customers. So you know, it's about it's about trip frequency. So dollar stores are really favored when people are doing kind of quick fill
in trips in between larger shops. Where Walmart comes into place is for that larger shop when people are planning, you know, multiple meals in advance. They're planning, you know, for a larger event or something like that. And so you know, as we've seen you know, some uh some some consolidation happening in the in the dollar store industry. You know, we saw ninety nine cent stores go out of business. You know, we saw a party city collapse.
That offers opportunity to ev for everybody, and and Walmart is included in that mix.
And Jen, just to close this out, I think this is going to be the first earnings report under Walmart's new CEO, John Ferner, Right, Uh, what what's the pressure on him, uh to keep up the momentum that we've seen under Doug McMillan over the years.
I think that they certainly there's there's going to be expectations that he continues with the things that have really benefited Walmart in recent years, which is that willingness to experiment and and fail. So experiment, adapt what what works, you know, roll it up quickly. If something doesn't work, walk away. You know, I think that he's you know, he's been with Walmart for a while, so you know, he certainly has the perspective of what the company has
been doing. But I think all eyes will be on whether, you know, he finds new opportunities to kind of supplement the ecosystem that Walmart has been building. That said, we're not expecting any major pivots and strategy in the short term because the the the this is working quite well for Walmart at the moment, and they continue to gain share and they continue to put on new customers.
Really appreciate this as we look ahead to these earnings from Walmart on Thursday. That's Jen Bartashis and Punam Goyle, retail analysts for Bloomberg Intelligence. And up next, we're going to stick with the earnings theme and look at what to expect from Chip Giant in Vidia. It's twenty minutes past the hour. I'm Nathan Hager, and this is Bloomberg. Welcome back to this special edition of Bloomberg Daybreak. US markets are closed for the President's holiday. I'm Nathan Hager,
and we continue our focus on earnings. Nvidia reports its latest quarterly numbers next week. From what we can expect from the chip behemoth, let's bring in Man Deep Saying, global head of tech research for Bloomberg Intelligence, and BI senior Semiconductors analyst Kunjohn Sabani. Thanks so much to both of you for being with us, and many people start with you because it seems like the bar keeps getting set higher and higher for Nvidia quarter in and quarter out.
Do you agree with that and how high is the bar this time?
Well, so, in the last couple of years, what we have seen is in Vidia's top line growth actually tracks the hyperscale capex changes. And what we have seen here today is all these hyperscalers raising their capex expectations for twenty twenty six and we're talking about another year of
a sixty percent increase in total capex. And so if that's tracking, you know, in Vidia's top line growth and it's a it's a good proxy for that, then we can expect something similar and that's where the estimates keep getting revised upward. And now you know, consensus is forecasting almost a sixty percent increase in in Vidio's top line for twenty twenty six.
My eyebrowser already hurting just thinking about that, Kunjon. To that point, six hundred and fifty billion dollars over the next year is the number we keep hearing from the four hyper scalers in terms of their AI plans. How do you think that plays out for Nvidia's results, Well.
That should be a definite tailwind. Remember sometime in three Q calendar three Q last year, Jensen gave out a five hundred billion dollar This is Nvidia's revenue, not the hyperscale care PACs, but five hundred billion dollar of a pipeline of a backlog for both its Blackwell and upcoming Rubin which will be in second half twenty six through
twenty twenty six. Since then, as Mandeep mentioned, the estimates for these hyper scalers have gone up in some cases like Google and Amazon has gone up close to forty fifty percent, So those a significant portion of that increase should definitely go in Vida's way. So that should now raise the estimates even more. Since off of that three QI billion pipeline.
Number, Mandy, do you see in Vidia keeping up with the demand that that kind of spending entails.
Yeah.
In fact, I was at CEES this year and then at Davos as well, and Jensen said demand is really strong at least ten times you know, during those big events. So clearly he anticipated this and Nvidia has been preparing for this kind of step up and demand. The one caveat here is what we are hearing from companies about memory prices, and every company that has reported so far on the hardware side has called out, you know, memory
pricing being a challenge. I think Nvidia, given their scale, has probably managed it far better than some of the smaller companies. But there's no doubt that memory is having an impact on the supply chain this quarter and most likely for the next couple of quarters at least.
Now give us your view on that, Coon, John, because to man Deep's point, that is something that we've been hearing a lot from many companies, even outside the hyperscalers, that these memory prices are potential crimp to their margins.
Yeah, I mean that is true, and as an industry they just have to deal with it. But given you know, in the terms of stack of priority, look and media is of course going to get the first priority. We have seen, including Nvidia, but we have seen from the memory players that they are reprioritizing key markets, which is the data center, which is the latest and greatest servers, because that's where they get the most profit and the
most dollar. And Nvidia also has prioritized and has actually announced that they're going to not ship enough gaming GPUs because they want to prioritize the memory that goes to the server GPUs. So we think Nvidia should be okay. The smaller, much more not sophisticated players and players outside of the data center will see some impact of taking allogation away from them or not getting the key allogation, but Nvidia and hyperscalers should mostly be okay.
Now we know that in Video is an industry leader in the GPUs, but we hear all this talk as well about TPUs. How could that be playing out in the earnings when they report.
Yeah, I think what we saw from Google is one they expect, you know again fifty percent of their deployments to go towards their cloud business, and the cloud business seems to be accelerating. We saw a quarter with forty eight percent cloud growth, which is far better than the
other hyperscalers and with you know, better margins. So I think where the TPUs story is really solid for someone like Google is the fact that one it's vertical stack integration that gives them a much better you know, token per what sort of a metric compared to other hyperscalers. And also, I think in terms of kapex efficiency, Google probably is the best position when it comes to the hyperscaler.
So it'll be interesting to see, you know, what Microsoft and Meta end up doing, given Amazon has also talked about ramping up their Traanium chips their own A six. So both Amazon and Google are a tailwind for someone like Broadcom, which Kunjin can talk more about. But clearly I think Microsoft and Meta are probably more reliant on Nvidia at this point than the other hyperscalers.
We're speaking with Mandeep Saying, Global head of Tech research at Bloomberg Intelligence, and BI Senior Semiconductor's analyst Kunjohn Sabani. Kenjohn Let's pick up off of Mandeep's point about how Nvidia is weathering the competition and from some of these other chip players, not just the TPUs but the likes of Broadcom, AMD, Micron.
Yeah, I mean Look, there is no doubt and we have a forecast in our latest AI chip Deep Type that we are published, But there is no doubt that a six R, which is the likes of a TPU and a trainium are going to grow fast and to some degree definitely take share away from in Media. It's GPU competitor, which is from AMD, is also getting ready to ship its first server level solution in second half twenty six. So look, competition is coming from all angles.
Having said that, though you know, and Media is also not sitting on his heels. They have been trying to explore different areas and markets. One example is they have announced they are going to start selling their best in class ARM based CPU as a stand alone chips, so entering into a brand new TAM that they didn't have access to it in the past. And we think, you know, beyond just server GPUs, they will be making forays into a lot more other areas of AI, whether it's automotive,
whether it's physical AI. So right now the demand is so high that despite such high competition that I talked about, in Media can still continue growing really handsomely, at least for the next two to three years.
Matthew how do you see Video's growth rejectory at this point, not just on the chips, but growing into other markets. Does Video even need to grow into other markets? When the hyperscalers you're talking about the kind of spending that they are.
Well, you have to think, you know, one or two years ahead, because the kind of levels we are seeing with capex and you know, as I said, we'll see another year of sixty percent growth. We already had two years of sixty to seventy percent CAPEX growth. These kind of growth levels are not sustainable. I mean, there is no doubt that growth in CAPEX will taper off. And you know we are already talking about trillion dollars plus
in CAPEX. So from this point on, you know, six hundred and fifty billion, you will see a deceleration in capex grud. So the question for Nvidia is if there is competition coming, do they want to move up the stack, which they've already done with the release of a foundational model on the autonomous driving side, the Alpmyle model that they've released, And that's where you know, they'll have to pick their spots in terms of what are the areas where they feel like They've got a lot in terms
of the adjacent capabilities. They've already have a very sizable
networking business. Then that Kunjin can talk about. But to me, the key is what kind of advantage these foundational models that are trained on the latest Blackwell architecture can show versus the A six and how big that gap is, Because at the end of the day, companies that are using the Nvidia clusters want to see, you know, whether it's performance in terms of tokens for what, or you know, the intelligence layer being better versus some of the other
foundational models that are not trained on Invidia chips and that sort of distinction is very important to keep, you know, the gross margins that Nvidia has versus the competition.
I pick up on that, kin John, how do you see in Nvidia sort of growing into some of that story.
Yeah, I mean, look mentioned about networking, just to just give a point of reference, This is not an area Nvidia was playing up until even just two years back. Today, the revenues from networking are going to run close to
thirty billion figure for the full year. Nvidia was not even doing thirty billion as a whole company up back in until twenty twenty three, So that's just to set an example of that they have been mentioning into new areas moving up the stack, whether it is hardware, whether going beyond GPUs into networking and CPUs, or whether going into software ecosystem, whether it's through NIMS, through models, through
their Omniverus software stack. So they've shown a lot of success in terms of expanding these businesses from nothing to billions of dollars today.
Mandi Kunjohn mentioned earlier that Jensen Wang talked about the Rubin chip getting introduced in the second half of this year. Do you expect to hear more clarity from Jensen Wang when it comes to that next generationship in the earnings next week.
Yeah, earnings as well as they have their GtC event coming up in March, so clearly, you know, there was a reason why Jensen pulled forward that announcement of the new chip to CES just to set expectations that they're really aggressive about pushing out the new architecture and introduce that in the second half. And I do expect, you know, the performance gains to be a big part of how they continue to show that they are ahead of competition,
including a MD and the A six provider. So, as I said, in the end, it comes down to you know how, and Vidia's chips are helping address the power greed times. For everything that we are dealing with right now, power has the longest lead time. And if Nvidia can address that power constraint and maximize you know, the throughput per unit of power, then they will continue to command premium pricing, which has been their page all along.
And Kun John, what's the most important question that Jensen Wong needs to answer in the earnings call next week?
And it will be two questions. One is everyone's going to try and figure out the shape or increase of that five hundred billion pipeline that he had mentioned, So that's going to be most of the analysts.
Goal really appreciate this. Thanks to both of you for being with us. That's Kun John Sabani and man Deep Sing of Bloomberg Intelligence. And up next, the World's Richest Man goes After open A, we'll get an update on Elon Musk's lawsuit against the maker of chat GPT. It's thirty seven minutes past the hour. I'm Nathan Hager and this is Bloomberg. Thank you so much for joining us. On this special edition of Bloomberg Daybreak. US markets are
closed for the President's Day holiday. I'm Nathan Hager. We turned out to a couple high profile legal cases. The world's richest man, Elon Musk, is suing open Ai, a company he co founded. That trial set to begin in April. For more, We're joined by Bloomberg Intelligence litigation analyst Matthew Shettenhelm. Matt, thanks for coming on with us. Remind us first off, on the background of this case. Why is Elon Musk suing open Ai.
Yeah, this goes back to Open Eyes founding about ten years ago, when Elon Musk was one of the principal contributors to the funding of its startup. And the allegation that Musk is making in this lawsuit is that when when open ai was created, it was under the idea that it would remain a non profit and that it would be focused on contributing to the good of the world,
not contributing to private profits. And and so the the basic claim that Musk is making now some ten years later is that basically he was deceived in contributing what adds up to about thirty eight million dollars in startup contributions that open ai and Microsoft basically misrepresented how the company would operate, and so Musk he threw the whole
kitchen sink at the companies in his complaint. But it's been narrowed down now to two or three claims that that basically say one that that that the companies were fraudulent in in in pursuing now a shift to a for profit model, and they the companies were unjustly enriched, and that the companies created a charitable trust and now they've reached that charitable trust and we're now on track for a trial on those issues.
Well, Elon Musk is asking for a lot more though than just his thirty eight million dollars back, right, I mean, he's seeking tens of billions from these companies.
Yeah, that's That's the really interesting piece here is that in January Musk made a filing in the case because it hasn't been clear exactly what would be the remedy, say Musk wins here it does the court just refocus the company back to a charitable purpose or is there monetary risk as well? To open ai and Microsoft and Must pushed hard on that last piece and made a filing that said, I'm not just seeking my thirty eight
million dollars back here. Open ai was unjustly enriched and and owes me in the numbers he put in sixty five to one hundred and nine billion dollars from open Ai from Microsoft thirteen billion to twenty five billion dollars that he's seeking as a remedy here. So that's, you know, obviously a number that the companies have to take seriously.
I think it's a different question whether the court would would really consider that as as a realistic remedy or if that's more of a play here for leverage and potentially shaping some sort of settlements to threaten numbers on
that scale. Must calculates those through an expert based on the valuation of open Ai, not on any actual returns for the company that that that have been unjustly received it, And I think a court's going to have a real concern with calculating any sort of damages on valuation as Must does, so I bring a lot of skepticism to that number. I think potentially the bigger risk for open i and Microsoft might be the changes to its model going forward if the court insists that it needs to
be focused on a charitable purpose. That could be, you know, substantial changes to the contracts and the model that the companies are pursuing now, and Microsoft's made a substantial investment in open Ai. Open Ai might be exploring an IPO. Potential disruption there, to me is probably the bigger risk than these gigantic numbers that Musk is throwing around.
So how are you thinking this is going to potentially play out?
Here?
Is a settlement? What you're thinking is going to be the most likely outcome? And what would a settlement potentially look like?
Yeah, so you know, so we're headed towards a trial in April twenty seventh. A jury trial and ury ty are inherently risky, and you you have potentially big numbers here. You know, settlements are are are always a real possibility. At the same time, I think open Ai and Microsoft think they have pretty strong legal arguments that this case never should have even reached this point, that it should never even be going to a jury. The judge has
repeatedly refused to stop the case they reject. She rejected the motion for dismissal, the motion for summary judgment. I think the companies might want to try you know, to appeal this and and to challenge those rulings. But the problem for them is they can't do it before this goes to the jury. So it's a tough call to
see how this plays out. There's a chance the companies say, look, you know, let's roll the dice with the jury and we can always appeal it afterwards, especially if the jury isn't asked to go to to remedy, it's just to go to to liability.
So we'll see.
It's really hard to say what a settlement looks like here. Given you the unprecedented nature of this suit, it's hard to see a concrete framework. I'm skeptical that those big dollar amounts come into play in any sort of settlement. But you know, you have big personalities here, obviously with Elon Musk and Sam Altman, who don't get along very well, and so to try to envision in an exact way that they would structure a settlement, it's too early to say.
Thanks for this, Matt, great having you on with us. That's Bloomberg Intelligence litigation analyst Matthew Shettenhelm. Another case in the National Spotlight is set for next month. The Justice Departments antitrust lawsuit against Live Nation and Ticketmaster. For more on this, we're joined by Bloomberg Intelligence senior litigation analyst Jennifer ree. Jen give us the background on this one. Is this just about how much we're paying for tickets to go to concerts and things?
Well, that's part of it. I mean, the allegations are that those fees that get tacked onto tickets for consorts that we all know so well are a result of Live Nation just essentially having too much dominance in control sort of across the entire ecosystem for large concerts. You know, it's in promotions, it manages artists, it owns venues, and it owns ticket Master, which it acquired in twenty ten.
And what's been alleged here by the Department of Justice and a large group of states, by the way, forty of them have joined this case, is that the company has kind of engaged in this long laundry list of exclusionary conduct intended to maintain its monopoly positions in a couple different markets. You know, under anti trust laws, it's not really good enough just to have a monopoly position.
But if you're in a monopoly position, meaning like maybe seventy percent or more market share in a market, if you engage in conduct intended to exclude your competitors and to maintain that position in kind of in an unfair way, that's where you get across the anti trust lines. And so that's what they're accusing Live Nation of here.
So based on your analysis, what's the thinking about whether that type of behavior has been displayed by Live Nation and Ticketmaster.
Well, based on what I've seen so far, the facts that are in the complaint and whatever they've allowed us to see publicly because quite a lot is redacted, it looks like the Department of Justice has some really good evidence and I believe has a strong case here. This will go before a jury, and so it would be a jury that would decide on liability. A judge would decide on remedy, but a jury would look at what the evidence the Department of Justice puts in front of it.
But Nathan, there is some possibility that this case would not get there because there is a possibility that the company could settle with the Department of Justice before they get to that trial.
Okay, what has you think in that.
Well, this is mostly coming from news reports and from a pattern that we're beginning to see at the Department of Justice. You know, it has a division called the Antitrust Division, and that is staffed with those people who are anti trust experts. They are anti trust lawyers, economists, They understand that area and the law, but they are overseen by the Attorney General's Office, who aren't necessarily attorneys with anti trust experience, but can override the decisions of
the division. And we have what has been alleged, because I have no firsthand knowledge, but what has been reported is that some very well connected Republican lobbyists, or I should say sort of in the MAGA side of the Republican Party lobbyists have successfully been able to go over the heads of the Anti trust Division lawyers and procure settlements for their clients against the will of the anti
trust experts at the DOJ. And there is a suggestion that Live Nation is trying to that strategy here too, that they've hired quite a few people that are very influential with the Trump administration. For instance, Kelly an Conway is one. They put Richard Grinnell, who is a Trump confidant, on the board of and who is running the Kennedy Center, they put him on their board, and apparently, according to news reports, they have lobbyists roaming the halls of the
Department of Justice on a pretty consistent basis. So they're
working hard, I think, to get to a settlement. And we have seen this tactic has success in the past, namely with respect to Hewlett Packard in its attempt to acquire Juniper that was first challenged by the DOJ Anti Trust lawyers, and also with respect to a deal between Compass and Anywhere Real Estate where the DOJ Anti Trust Division was discouraged from opening an in depth investigation and the deal was allowed to clear without much of a deep look into it.
Well, do you have a sense of what kind of settlement would satisfy the Justice Department?
So I think you know. Live Nation has been operating under a DOJ consent order for years, since twenty ten. That basically means an agreement, you know, a legal agreement that they'll behave and their business in a certain way. They had to enter that order in order to acquire
ticket Master. That was the agreement, and there have been investigations since, analegations and a finding by the DOJ that Live Nation did not comply with the terms of that consent order, and it had a lot of elements to it, but in particular, it wasn't supposed to strong arm venues into using Ticketmaster as its ticketing agent, and it was in fact doing that, So that consent order was kind of bolstered and extended in twenty nineteen during Trump's first administration,
it just expired. So one of the things obviously that the DJ could do is just go back to that consent order bolster its terms further, since apparently Live Nation hasn't really complied with those terms to begin with, and extend that, let's say for another ten years. These would be things like you cannot enter long term exclusive agreements
with venues you don't own. For Ticketmaster to be the exclusive agent, you know, you have to allow other ticketing agents to come in there and vuy for that for that position for certain concerts. That obviously stop strong arming venues and artists. And one of the allegations here is that artists cannot play in the amphitheaters owned by Live Nation unless they agreed to have Live Nation promote their tour. So there would be something like, you know, you cannot
engage in that kind of conduct. You have to let artists use your amphitheaters, but be free to pick their own promoter. I think terms like that could possibly be in a consent order that would allow for a settlement here.
All right, well we'll see how things go. Understand, this is going to be hitting the courts rather quickly. That's Jen Bartash is a senior litigation analyst for Bloomberg Intelligence. Thanks as well to Bloomberg Intelligence as Matthew schttenhelm Man, Deep Singh, Kun, John Sabani, Jen Bartashes, and Hunum Goyle. Thanks to you as well for being with us on this President Day holiday. I'm Nathan Hager. Stay with us. Top stories and global business at lines are coming up right now.