Ticketmaster, Live Nation Boost Competitors To Gain Merger OK

The U.S. Department of Justice yesterday approved the merger of Ticketmaster and Live Nation, and to "win federal approval, Ticketmaster had to agree to license ticketing software" to AEG and to sell ticketing division Paciolan Inc. to Comcast-Spectacor "or another buyer within 60 days," according to Peggy McGlone of the Newark STAR-LEDGER. The DOJ said that these moves "will spark competition" for the newly formed company, to be named Live Nation Entertainment. The new company also "agreed to federal monitoring for 10 years to prevent it from using anti-competitive practices." U.S. Assistant Attorney General for Antitrust Christine Varney: "The public can expect to see three competitors. When you have robust competition, you see prices coming down." But the compromises "did little to mollify critics of the deal who have warned that the merger gives the new company a stranglehold on the industry." Concert promoter John Scher said that the agreement "leaves a 'mountain of issues' to be resolved." Scher: "It leaves the risk takers out of the scenario, the people who are risking money to put events on, the concerts, the circus, the family shows. The people taking the risk ... don't seem to have a say in what ticketing operation they want to choose. That, to say the least, is unfortunate" (Newark STAR-LEDGER, 1/26). U.S. Rep. Bill Pascrell Jr. (D-NJ) said that the agreement “still allows for the creation of one company that manages every segment of the entertainment industry, including acts, music sales, ticketing, T-shirts, promotion and arenas.” Pascrell: “This is a terrible decision.” Pascrell said that he will “continue to push for a bill he introduced that would put new conditions on ticket sales and resales” (Bergen RECORD, 1/26). 

CONDITIONS OF DEAL: The WALL STREET JOURNAL's Smith & Catan report Ticketmaster and Live Nation "will be required to offer ticketing and concert-promotion services separately, rather than as a bundle," and divisions of Live Nation Entertainment "won't be allowed to share certain kinds of data so as to reduce the competitive edge afforded by its vast scope" (WALL STREET JOURNAL, 1/26). Live Nation Entertainment Exec Chair Irving Azoff said the new company will "create more choices for family entertainment, sports, artists, teams and other rights holders" (USA TODAY, 1/26). In L.A., Chmielewski, Fritz & Lewis note Live Nation Entertainment "would have the ability to book concerts, sell tickets and merchandise, and manage artists all under one roof." Live Nation Entertainment is "prohibited from retaliating against venue owners that defect to competitors" (L.A. TIMES, 1/26). In DC, Zachary Goldfarb notes Ticketmaster is the "country's largest seller of tickets to concerts, sports games and other live events," and Live Nation "runs more than 100 concert venues." Varney said the original Ticketmaster-Live Nation deal was "anti-competitive." Varney added, "This settlement will preserve competition in primary ticketing and maintain incentives to innovate and discount" (WASHINGTON POST, 1/26). In N.Y., Ben Sisario reports Ticketmaster in '08 sold 141 million tickets worth $8.9B, and the company also "owns a controlling interest in Front Line Management." Live Nation Entertainment "would have an estimated $6[B] in annual revenue" (N.Y. TIMES, 1/26).

COMPETITORS' GAIN: In N.Y., Peter Lauria writes the settlement "will create a new ticketing competitor in AEG -- which ranked as Ticketmaster's largest client, selling about 10 million tickets through the company last year -- and strengthen Comcast's position in ticket sales" (N.Y. POST, 1/26). The agreement allows AEG to operate a private label ticketing site using the Ticketmaster system for up to five years. In addition, AEG can move some or all of its ticketing business to a separate platform at any time following the merger. Also, AEG has an option to license and install Ticketmaster host software to power a competing system should AEG elect not to pursue an alternative technology (Don Muret, SportsBusiness Journal). In Philadelphia, Bob Fernandez writes the proposed settlement has the "benefit of boosting Comcast-Spectacor's ticketing business, which is operated as New Era tickets." The business "has 50 ticketing accounts that produce about 10 million ticket sales a year." In the settlement, Comcast-Spectacor "would purchase Ticketmaster's Paciolan Inc. subsidiary," which "has 200 accounts that produce millions of tickets" (PHILADELPHIA INQUIRER, 1/26).