The Justice Department shed some light on the sudden departure of Ari Emanuel from entertainment giant Live Nation's board of directors, attributing Emanuel's and another former board member's resignations to "antitrust concerns."
Emanuel, who is CEO and director of talent and media company Endeavor, as well as Endeavor's president Mark Shapiro, left the board of Live Nation, which is technically a competitor of Endeavor.
"These resignations ensure that Endeavor and Live Nation will compete independently," acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division said in a statement. "Executives are not permitted to hold board positions on companies that compete with each other. The division will enforce the antitrust laws to make sure that all companies compete on the merits."
On Monday, the Justice Department said Emanuel and Shapiro resigned due to concerns that their positions created an illegal interlocking directorate, defined as a situation "where one person – or an agent of one person or company – serves as an officer or director of two companies." Such setups are prohibited by Section 8 of the Clayton Act, which is "designed to prevent harm from competitors having overlapping directors or managers, regardless of whether any anticompetitive conduct actually occurs," according to the Justice Department.
Emanuel resigned from Live Nation's board on June 3, shortly before the company's annual stockholders meeting on June 10, according to The Hollywood Reporter.
Live Nation had a rough year in 2020, including a $588.1 million loss in the second quarter of 2020.
As for Endeavor's business, the company was also hit hard during the course of the coronavirus pandemic, taking in just under $3.5 billion in revenue in 2020, down from $4.57 billion in 2019. However, prior to the onset of the virus, its "business delivered strong revenue growth," according to a recent filing.
Both companies are headquartered in Beverly Hills, California.
Emanuel is the brother of former Chicago Mayor Rahm Emanuel.
FOX Business' inquiry to Endeavor was not returned at the time of publication.
FOX Business' Daniella Genovese, Fox News' Tyler McCarthy and the Associated Press contributed to this report.