Phil Knight and Nike Enunciate the DOJ’s Fatuous Case Against Live Nation

“I needed cash…I spent most of every day thinking about liquidity, talking about liquidity, looking to the heavens and pleading for liquidity. My kingdom for liquidity.” Those are the words of Phil Knight, the brilliant, visionary, billionaire founder of Nike, from his endlessly interesting 2016 memoir, Shoe Dog.

Too easily forgotten by those who waste precious mindshare on wealth inequality is that one reason the unequal are so rich now is that so few believed in their vision when they weren’t rich. See the Phil Knight quote that begins this piece to see why that’s true. In the early days of Nike, and realistically the not-so-early days of Nike, Knight would have given anything to exchange shares in his floundering business for cash. The problem was that there were no takers. Which is a reminder that a major source of Knight’s astounding wealth today is that so few – if any – thought he or Nike would amount to anything several decades ago.  

Further evidence of how few thought Knight would make it will be found in Eugene, OR in the coming weeks. On June 21st, the track and field Olympic trials will take place at Hayward Field, on the campus of the University of Oregon. The school and its wondrously advanced facilities are yet another monument to just how few people thought Knight or Nike would amount to anything.

The simple truth is that absent Knight’s remarkable wealth, Eugene and the Oregon campus would not be the routine location for Olympic trials, along with other major track meets. And Oregon Duck football wouldn’t be a global brand that attracts some of the best football players in the United States to an otherwise unremarkable Pacific Northwest town.

Crucial about Knight’s wealth is that as evidenced by its size ($38 billion), it was wholly unexpected. Repeat it over and over again. Had there at all been a consensus that Knight was on to something in his seemingly quixotic efforts to topple Adidas, it’s not unreasonable to suggest that the Olympic track and field trials would be taking place elsewhere, and the Oregon Duck football team would remain what it’s always been: a college football afterthought. All on account of Knight owning much less of Nike after it became a global brand. 

What does any of this have to do with Live Nation, the multi-faceted entertainment behemoth that the Department of Justice’s Jonathan Kanter has described as an “entrenched” monopoly that must be broken up? Realistically nothing and everything.

Kanter’s obvious problem with Live Nation is that as he sees it, it’s too successful. On its face, how very odd. To see why, think back to 2008, and how enraged Americans were upon seeing the federal government bail out banks and other financial institutions. The citizenry loathed the latter, so how truly strange that the same government would be using swagger not its own to neuter businesses that, based on their success, don’t require government assistance. Except that there’s more.

That Live Nation has achieved so much, that it’s so dominant in the entertainment space, is all the evidence we need of how few foresaw its dominance. Think about it. If the pivots and acquisitions executed by Live Nation had been viewed as an obvious path to what the DOJ describes as “entrenched” success, then it’s a safe bet that Live Nation wouldn’t presently be the entertainment behemoth that it is. And it wouldn’t be simply because the acquisitions that rendered it so prosperous wouldn’t have happened as regularly or easily thanks to other buyers, it would have experienced much more competition on the way to the present due to mimicry, not to mention that Live Nation itself would have been swallowed long ago by an even bigger entertainment fish in anticipation of its dominance.

Except that none of the scenarios mentioned revealed themselves in any notable way. Live Nation’s success, like Nike’s, came as a surprise. Which means Live Nation’s reward for risking everything on an uncertain tomorrow is a lawsuit from a federal government eager to tear it town.

There are no “monopolies” in the private sector simply because the future of business is another century relative to the present. Always and everywhere. Applied to Live Nation, let it not be forgotten that it’s only offense is discovering a future that its competition did not.

Republished from RealClear Markets


  • John Tamny

    John Tamny is a popular speaker and author in the U.S. and around the world. His speech topics include "Government Barriers to Economic Growth," "Why Washington and Wall Street are Better Off Living Apart," and more.

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