DOJ To Sue Live Nation Over Taylor Swift Fiasco & Tech Startup Market Scores $7B Boost

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0:29Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the DOJ is preparing to sue Live Nation over its alleged ticketing monopoly. Then the Olympics are 100 days away. We'll take you through some of the storylines to watch as the world's best gear up for Paris. It's Wednesday, April 17th. Let's ride.

0:54Good news for Billy Joel fans. And CBS is going to rebroadcast the singers live at Madison Square Garden special in its entirety on Friday to make up for a huge boof it made last weekend. Just as Billy was going into his La-Di-Daz at the end of Piano Man, the network abruptly cut to local news in the eastern and central time zones, sparking outrage from fans who missed the last two minutes of the concert. The jump cut was also reminiscent of NBC's infamous Heidi game when the network cut to the movie Heidi toward the end of a very close Jets Raiders matchup in 1968. I'm just glad they're re-airing this, though.

1:32I'm very curious about how Piano Man ends. It's like we haven't heard this song enough. The la la to de da's. How are we going to miss that? I feel really bad for the poor reporter, though, that CBS cut away to. He said, I apologize to the people who are enjoying Billy Joel on TV. And then all of a sudden had to see my face. But listen, I'll just wait for the Billy Joel Eras tour movie to drop at AMC. And I'll go watch that. And he's had many eras. He's been performing at Madison Square Garden since 1978. He has his own banner in the rafters at MSG along with the Rangers and the Knicks. And his final show is coming up on July 25th, 2024, which is this year.

2:12It's in a few months. So if you haven't seen Billy Joel at MSG, you got to get on that now. That's me. That's also me. Maybe we should get on that. Now let's hear our word from our friends over at Robinhood. You've probably heard the line, cash is king. But I don't like that phrase because kings don't work that hard and your cash should be working for you. When you're not investing in stocks, ETFs, or options, the money chilling in your Robinhood brokerage account doesn't just have to sit there. That cash can go to work for you. banks and brokerage make money on your cash, but Robinhood shares some of that love back with you.

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3:25Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs. Like a good neighbor, State Farm is there. The music festival season has kicked off at Coachella and the DOJ wants to join the party. It is reportedly preparing to sue Live Nation as soon as next month for monopolistic practices in a move that could upend the event ticketing industry. A lawsuit would be the culmination of a years long Justice Department investigation into Live Nation over its stranglehold in the events business. The company bills itself as the largest live entertainment company and the largest producer of live music concerts in the world.

4:09And its subsidiary, Ticketmaster, has a more than 80 percent market share for primary ticket sales at the biggest venues in the U.S. And it may have skated along under the radar had it not been for Swifties, who raged at Live Nation following its epic bungling of Taylor Swift's Eras Tour ticket launch back in 2022. Although an antitrust investigation was already ongoing, that moment crystallized Live Nation's dominance for the American public. The company argues it's not a monopoly whatsoever and that it faces more competition than ever. Soon, it may have to present that defense in court. Right.

4:43It feels like the government is almost trying to atone for maybe a previous area it made over a decade ago. They opted out of trying to block Live Nation Ticketmaster's merger back in 2010. That said, the Justice Department did apply some restrictions to the merger. They said that at the time, the company had to pledge that it wouldn't tie its services together or retaliate against venues that switch promoter or switch ticketing services. But then in 2019, the Justice Department revised this deal with the company to add this anti-retaliation clause because there were these reports that Live Nation was bullying venues into using Ticketmaster.

5:20So I think that we don't know the specifics around exactly what this suit will entail, but those are definitely some of the hints as to what the DOJ will target this company. Yeah, certain reports say that they may ask Live Nation to divest from Ticketmaster after that 2010 merger. And it appears that this lawsuit, whatever it may actually amount to, may have some teeth because Live Nation stock actually was down 8 % yesterday. It had its worst day of the year. So it appears that investors do feel like this presents at least some threat to its business. Live Nation is pushing back, saying that it doesn't even set the ticket prices.

5:57Those belong to the venues and the artists themselves. And that 80 % stat about Ticketmaster's control of the market, that is just for large U.S. concert venues. And Live Nation says, if you have to really focus on such a small segment of the market, then are we really a monopoly? It doesn't represent the market as a whole. Right. That is certainly what this comes down to. Like most antitrust lawsuits, it comes down to how you are defining the market. And so you're right. Live Nation's head of corporate affairs, like if you have to zoom in like this, then this monopoly isn't one whatsoever. So that being said, though, if we want to look at the public perception of Live Nation Ticketmaster, they have faced so much criticism in the past.

6:38The exorbitant ticket fees, the flawed customer service, the anti-competitive practices. So if this was held into the court of public opinion, certainly people would be for breaking up Live Nation and Ticketmaster. Meanwhile, Live Nation is doing the best it's ever had, but with this boom in concerts over the past year or two, it brought in$23 billion in revenue last year, which was a 36 % increase over the year before. So it is, it's absolutely doing so well right now. So this would be a huge, you know, cutting off, cutting it off at the knees, if it were to come to pass. The vibes around VC funding aren't particularly good right now, but no one told that to Andreessen Horowitz.

7:15It just closed on$7.2 billion for its newest set of funds, one of the biggest fundraising efforts we've seen since the venture capital market hit a slump around two years ago. A16Z is actually breaking its haul across multiple different sectors. Around half is going to its general growth fund, while over$2 billion is going towards AI-specific companies. It also has a so-called American Dynism Fund that is getting$600 million, while the remaining$600 million is going towards its gaming fund. This chonky fundraising haul is notable because the fundraising environment is a lot less frothy these days.

7:51Globally, VCs raised$555 billion back in 2021, but last year they only raised a third of that. And in the first quarter of this year, the sector is off to an even slower start. But this new fund might put a little pep in the step of the downtrodden startup tech world that hasn't had any real major wins recently. No, deal volume in the U.S. is at its lowest level since 2017 for this venture sector. Andreessen Horowitz is one of the most prominent names that you hear out of Silicon Valley. They've invested in the likes of Facebook and Airbnb very early on. So they are considered one of the top VCs around.

8:31They have been doing some deals over the past few years, maybe a little more quietly. One of those was actually the largest individual check they ever wrote in a round for a funding to company. And that was$350 million to Flow, which is the former WeWork founder Adam Newman's startup, which caused a lot of people to raise some eyebrows. They've done a lot of crypto investing also in the past few years as crypto boomed and then they had a bust. So Andreessen Horowitz has remained top of mind, and here they are raising a huge round, one of the biggest in years, to, I guess, plow back into the U.S.

9:07tech sector. Right. And just because the cash is there doesn't mean A16Z will necessarily get around to deploying it because look no further than maybe it's ill-advised push into crypto in 2022. It raised$4.5 billion for this crypto-specific fund, but much of that has yet to be invested because there's just been this major crypto wipeout, if you want to call it that. And then I'm also a little dubious about some of the sectors that they're allocating this money to. Sometimes just how VC funds work is sometimes they allocate the funds based on the stage of the startup. So there'll be like a seed stage fund that you invest in the seed stage of a company or a growth stage fund, which invest in later.

9:47But Andreessen Horowitz has decided to break it down by sector. AI, American dynamism and gaming is that last sector I want to talk about. I don't know how you're going to deploy six hundred million dollars into the gaming industry just because the gaming industry is so dominated by those major students. the Activision blizzards of the worlds. And I don't know if you're going to be able to find enough return on that 600 million to justify it, especially now that the web three era of gaming maybe has not panned out how a lot of people expected. So I'm just a little dubious about the sectors they chose.

10:19Obviously, AI is going to be hot. But as you said, at least they're injecting some life back into the startup market, which has needed it. And Mark Andreessen, one part of the Andreessen Horowitz duality, has remained top of mind for a lot of people because he has become this thought leader in the tech space. He's written some of the most influential essays in tech in the past decade or so. He started out with this essay called Software is Eating the World, which he projected that software would eat the world, which I think we can say came to pass. So check there. Back in April 2020, when we were all in lockdown, he wrote this famous essay called It's Time to Build, where he railed against American complacency, how we weren't ready for the pandemic, how we've just been stagnating in terms of building.

11:03So this was a rallying cry to be more proactive and get out of our moment of stagnation. And then recently he wrote why AI will save the world. And that was pushing back on critics who were trying to slow down AI. So obviously he's very bullish about the technology. Yesterday, Microsoft said it would invest$1.5 billion in G42, the UAE's largest AI company. But that's like saying the Lord of the Rings is about a piece of jewelry being returned. This deal is incredibly unusual and has major ramifications for the global fight for tech supremacy. Because while on the surface, it seems like any other private sector investment, this Microsoft G42 agreement was secretly brokered by the U.S.

11:44government through months of back channel talks. The White House's goal is to bring the ultra-wealthy Gulf under America's AI tent while boxing out China, which also wants to bring Gulf nations into its tech embrace. This deal takes a big step toward accomplishing that. As part of the investment, G42 agreed to drop the Chinese tech it was using, including Huawei's telecom equipment. A spokesperson said, hey, that's just the cost of doing business, and the opportunity is too good to pass up. And what an opportunity indeed. Indeed, G42 will now get access to Microsoft's AI infrastructure in the Emirates, which is world class and super expensive to build.

12:22And on the other side, Microsoft gets a foothold in a region that is oozing with riches and turning toward AI to diversify away from oil. Toby, what do you make of this deal? Yeah, this just shows that AI is now this global chess game and that the era of AI diplomacy is here. We're definitely entering this time where who controls what models and who has access to what data in which languages becomes this form of soft power that's kind of leaking across the globe. So it really is just a battle of which country's systems and then also which country's values will end up dominating the AI world. So it's clear why both the U.S.

12:57and China are very interested in the UAE in particular. Yeah, and there's so much money to be had there. AI companies or American AI companies have been eyeing the Gulf for a few months and years now. Sam Altman, the OpenAI CEO, wants to raise$7 trillion to build, reportedly raise$7 trillion to build data centers around the world. His first stop on that global fundraising tour was in the UAE because these companies or these countries have Saudi Arabia, UAE, Abu Dhabi, Dubai. They have so much money and they need to diversify away from oil. They've been getting into the entertainment space, as we've talked about.

13:34They've been getting into all these other industries that aren't fossil fuel specific. And one of those is AI. G42 is the largest AI company in the Emirates. And they've been at the forefront of the Gulf's AI push. So if you get whoever gets, you know, G42 in the Emirates on their team, US or China, it's going to be a huge push forward. One normal part of the deal is that G42 is going to put its AI models on Microsoft's Azure cloud platform. This has been the playbook for the Amazons and Microsofts of the world where you lure these companies in with the promise of cheaper cloud usage. And it almost subsidizes the venture investment into these companies because you slowly make your money back through this usage of your cloud services.

14:18So this is definitely a playbook. We saw Amazon do this with their big investment into Anthropik. So it is like this subsidized form of venture investing. I think we're only going to see become more common as big tech invests in these AI startups. Up next, the United Auto Workers Union has its eyes set on the South. Eczema isn't always obvious, but it's real. And so is the relief from EBCLIS. After an initial dosing phase, about 4 in 10 people taking EBCLIS achieved its relief and clear or almost clear skin at 16 weeks. And most of those people maintain skin that's still more clear at one year with monthly dosing.

15:21Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with EpGliss. Before starting EpGliss, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EpGliss and visit epgliss.lily.com or call 1-800-LILY-RX or 1-800-545-5979.

15:41When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. The South is known for a lot of things. Good food, good hospitality, Toby Howell. But one thing it is not known for is unions. and the United Auto Workers wants to change that. Volkswagen workers in Chattanooga, Tennessee begin voting today on whether to join the UAW as part of an unprecedented labor organizing effort spearheaded by the union's fiery president, Sean Fain.

16:33Fain has his eyes set on 13 different automakers operating in Southern states and Tennessee is the site of the first union battle. Should the vote go through, Volkswagen Chattanooga would be the first auto plan in the South to unionize through an election since the 1940s, according to the Washington Post. Neil, both GM and Ford do have UAW factories in Kentucky, Tennessee, and Texas, but this would be the union's first attempt at getting a foreign auto plant in the South on board. It's a pretty historic moment. It really is a historic moment, and it comes after a huge win last fall where the UAW renegotiated contracts with the big three Detroit automakers up in the North.

17:12Ford, GM, Stellantis, Sean Fain negotiated 25 % pay increases over the next four years of the contract. That was seen as a huge and historic and record-breaking labor contract. He wants to ride that momentum and go to the South, which is a much taller task. The foreign automakers have set up shop across the South. There are so many auto plants in places like Chattanooga, Alabama, South Carolina. And a large reason for that is because there aren't unionized workers there. So this is a much bigger hurdle than what Sean Fain did in Detroit, but he's hoping that he can ride the momentum and say, hey, look what I did for the workers back there up in Detroit.

17:51Let's try to do that here in Tennessee. Right. This union vote is the third one at this plan in a decade. They tried it back in 2014, 2019. Those both ended in narrow defeats. Part of the reason those losses came is because there is a lot of strong pushback from local politicians who warned that a union would have potentially negative effects on the local economy and on the workers' employment status. This time is no different. Governors of six southern states have all kind of issued this joint statement warning workers that joining a union would be bad for their jobs. But you're right. The reason why this is such a battleground is because Volkswagen and these other foreign automakers have been really good to the region.

18:31And so the allure of setting up shop in states that don't have UAW strongholds like they do up in Detroit has been something very compelling to these automakers. So there's a lot on the line here that starts at just this one Chattanooga plant. Right, Chattanooga, I mean, BMW has invested$4.3 billion in this Chattanooga plant. It's one of the largest employers in this city. So it's been a huge economic boon to these various cities in the South. Let's talk about the specific complaints that the workers have, because if they vote for a union, Obviously, they're not so happy with what's going on in their workplace.

19:07They're angry about inflexible sick day policies. And BMW has this tendency to haul in workers for compulsory overtime shifts on Saturdays. And that seems to be a particularly a particular pain point for workers that they just have to come in on Saturdays and they don't know it. So it so these particular pay issues or workplace issues might drive the these workers to join the union. But we don't really know how this vote is going to turn out. We'll find out over the next few days. Yeah, and this factory is VW's only plant worldwide that isn't represented by some similar body or some form of union.

19:41So it seems like they're agnostic about it. They haven't done anything that really qualifies as union busting. They've cleaned up some break rooms of some materials. But it does look like VW isn't going to put this all-out attack on stopping this union happening. So it really seems like it will be up to the workers. But this first vote is actually huge stakes because it's all about momentum, right? If you can continue the momentum from Detroit, then you go from BMW to Mercedes and maybe even take on Tesla, which would be the biggest fish to fry here in terms of unionization. If it fails, then you stop that momentum right in its tracks.

20:16Yesterday in Olympia, Greece, someone dressed as an ancient priestess lit a silver torch after offering a symbolic prayer to Apollo, which can only mean one thing. The Olympics are 100 days away. Over the next several months, the torch will be carried via land and sea to Paris, which is hosting the summer edition of the Games beginning in July. Organizers say in a world filled with conflict, wars, hate, and negative news, they're hoping the games can bring people together and give us hope for a better future. But with 100 days to go, there have already been some controversies from athlete pay to Nike's Team USA uniforms.

20:54To start with the first one, the governing body for track and field announced earlier this month that it would pay track and field gold medalist$50 ,000, becoming the first sport to award prize money at the Olympics. The stated aim is to share its revenue with athletes who are responsible for generating the revenue. And this way, it echoes the debate going on in the NCAA right now. But organizations for other sports like cycling blasted the move, saying it violates the Olympic spirit of amateurism and concentrates money in the top athletes. Toby, this ruffled some feathers. Yeah, it ruffled some feathers.

21:26The Olympic Games for years have basked in this purity of amateur competition that you're supposed to compete for love of the game. and national pride, not financial incentives. But I really do think that it is time for these athletes to get paid, especially in track and field, where a lot of these athletes do not get paid a lot. Sponsors is their main revenue source. So I don't think that it's, I think it's a shift that was a long time coming. And you're right, it mirrors the shift in the broader world of amateur sports. NIL deals are now a thing in college athletics. The facade of amateurism maybe is falling away.

21:59All I want to do is look back to the 1992 to Barcelona games, the Summer Olympics, where they finally threw the doors open to allow professional athletes. Because remember, that was a huge debate back then where the Olympics used to just be for amateur athletes. You couldn't have professionals at all. And look what it did for the Olympics. That was like the Michael Jordan dream team Olympics. It really elevated the entire status of sports worldwide. So I never think it's a bad idea to compensate the athletes more, despite what you might think about amateurism. And speaking of professional athletes playing in the Olympics.

22:32Kaitlyn Clark, who was just drafted number one in the WNBA draft on Monday night, might be playing in the Olympics and could give a huge boost to Team USA and NBC's entire coverage and viewership. Overall, bringing that Kaitlyn Clark effect that she did at Iowa and for college basketball, not just to the WNBA, but to the Olympics. So I'm sure NBC execs are really hoping that she is selected for Team USA, but there are a lot of other really good women's basketball players. So we just don't know whether she's going to make the team. I guess they're trying out right now. Right. NBC's Olympic viewership could use a jolt too, because the 2022 Beijing Winter Olympics, that was the least watched on record.

23:13The Tokyo Summer Olympics in 2021 averaged just 15.6 million viewers a night. That's 47 % below compared to the Rio de Janeiro Olympics in 2016. So they're definitely hoping for that Caitlin Clark effect, because people are saying that she is on the level of the Michael Phelps, the Simone Biles of the world, where people will tune in just to watch her. So we'll see if she does make the team and if that leads to higher ratings. And finally, on the women's sports beat, so Nike introduced some of its track uniforms over the past few weeks, and it's gotten a lot of blowback because one of the uniforms that it showcased for women was extremely skimpy, And a lot of the women track and field athletes pushed back on it and said, you know, what are you doing?

23:59This is a symbolic of the larger sexism that pervades the Olympics and the entire athletics wear industry. So that is that is one of the second uniform jersey debacles that Nike has gotten in the past few months after it rolled out. It's MLB uniforms that were see through also. Yeah, it looks like Nike scored yet another own goal. Like, come on, Nike, you can do better than this. Let's get the jersey and the pants situation and they will be under control as well. If you're a gamer and a fan of pragmatic Scandinavian design principles, then boy, do I have the story for you. IKEA has a new collection of gaming furniture set to hit stores later this year.

24:37Their 20-piece Braun Bowl collection, quote, challenges traditional gaming design. So think more quiet harmony with your room and less Garish spaceship looking gaming chairs. But early product photos have some doubting whether this is a real genuine attempt to build a line tailored towards gamers or more of a marketing stunt. A lot of the pieces look a lot like normal IKEA furniture, but there are some innovations tucked in as well, including a chair that engages the gamer physically swinging from side to side in harmony with their movement. What do you think, Neil? Marketing stunt or unique entry into a niche but valuable gaming market?