Carney: Broadway’s Blackout Looks Illegal

Broadway appears to have stumbled into lawbreaking territory this week when it declared that ticket sales would be suspended until May 30 of 2021.

The Broadway League announced Friday that theaters are going to remain closed at least through next May 30, which the New York Times points out would be 444 days “after all 41 theaters went dark as part of New York’s effort to slow the spread of the coronavirus.”

A Broadway League representative said that May 30 was the earliest theater owners would sell tickets, but the date after that when shows would restart would be up to individual theaters.

Antitrust laws, however, prohibit competitors from reaching agreements in restraint of trade. And an agreement among theater owners not to sell tickets sure sounds like a restraint of trade.

Professor Einer Elhauge,  who served as chairman of the Antitrust Advisory Committee to the Obama Campaign and teaches at Harvard Law School, said the agreement to remain closed is what “antitrust law calls a horizontal output restriction, which is per se illegal.”

Elhauge said in an email:

I think it is an agreement in restraint of trade that violates antitrust law. There would be no antitrust violation if the producers and theater owners each individually decided to shut down for safety reasons until May 2021 or if the government mandated that they do so. But a joint decision through a trade association not to put on shows is an agreement by horizontal competitors not to produce their product, which is a per se violation of antitrust law.

Professor Herbert Hovenkamp, of the University of Pennsylvania Carey Law School, agreed.

“If they reached that position by an agreement and there is no other integration among them, it sounds like a restraint of trade. If each one of them reached that decision individually and the trade association is simply announcing this, it’s probably okay,” Hovenkamp said.

Charlotte St. Martin, President of the Broadway League, was not available for comment on Friday.

“[O]ur membership is committed to re-opening as soon as conditions permit us to do so. We are working tirelessly with multiple partners on sustaining the industry once we raise our curtains again,” St. Martin said in a statement announcing the extended closing.