Nick Ut/AP
Live Nation CEO Michael Rapino

Ticketmaster and Live Nation Announce Merger Despite Outcry

February 11, 2009 04:15 PM
by Rachel Balik
The nation’s premier ticket vendor, Ticketmaster, and major concert promoter, Live Nation, have finalized a merger that threatens to violate antitrust laws.

Ticketmaster and Live Nation Seal the Deal

Live Nation and Ticketmaster claim that they plan to merge as an effort to survive the current recession, but lawmakers and concertgoers alike are up in arms. Many are concerned that the merger violates antitrust laws and wonder what it will mean for ticket prices.

The companies explained that they don’t control ticket prices, but that the artists do. Both companies are notorious for exorbitant surcharges, a matter neither has elected to address. They say that as one company, they will save $40 million dollars yearly, AP reports, and will be able to better serve clients. If the deal passes by authorities, it will be completed in the second half of 2009.

But the outcry against the merger is loud and clear. Wired’s Epicenter blog explains that the Ticketmaster and Live Nation merger would be both horizontal and vertical. Ticketmaster would automatically sell all events promoted by Live Nation. A smaller company would face great challenges in competing with those joint services, thus a judge could rule that the new set-up violates antitrust laws.

Opinion and Analysis: Customers react to the merger

CNN collected the responses of a public enraged by the merger. “I hoped Live Nation would provide competition for Ticketmaster and the outlandish surcharges and service fees,” one responder said. Instead, he said that the Live Nation surcharges added $22 to a ticket price, suggesting that the new merger will allow these surcharges to become even steeper—and unavoidable.

But some customers are still faithful, claiming that the ease of the Ticketmaster Web site outweighs its inconveniences. For many, the surcharges are well worth avoiding long ticket sale lines.

President Obama would have done well to have his Justice Department stop the merger, an opinion piece in BusinessWeek suggests. He has an uphill battle as president, and preventing this potentially illegal and possibly detrimental merger would have made him look good and would have been an easy victory. It is still possible that the Justice Department could rule that the merger violates antitrust.

Related Topic: Springsteen tickets and TicketsNow

Ticketmaster came under fire last week for a debacle involving the sale of tickets to Bruce Springsteen’s New Jersey concerts. At first, fans found either frozen computer screens or a message that the show was sold out. Many were automatically redirected to TicketsNow, a broker owned by Ticketmaster that sells tickets at a significant markup from face value. Some speculated that the automatic redirection was not an accident but an outright manipulation on the part of the ticket vendor.

Key Players: Live Nation and Ticketmaster

Ticketmaster, according to its CrunchBase company profile, is one of the largest and most successful e-commerce sites in existence. It provides ticket sales in 20 global markets and has exclusive ticketing rights for venues, theaters, arenas, museums and even entire sports team franchises.

Live Nation, founded in 2005, is a considerably younger company than Ticketmaster, which was founded in 1976. In addition to offering sponsorship and promotion services, Live Nation also owns or operates nearly 120 venues, Bizjournals reports.

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