Justice OKs Ticketmaster-Live Nation Merger

The U.S. Justice Department has approved the merger between ticket Web sites Ticketmaster and Live Nation according to Billboard. The merger was approved with the intention that it should lower prices of tickets within the United States and the United Kingdom. According to statements made by Irving Azoff, CEO of Ticketmaster Entertainment the merger with offer a lot of benefits and cut out waste in the system. This would reduce cost to the customer and customers will have greater access to tickets for their favorite concerts. The artist will also benefit because of the ability to sell more tickets with less waste. These benefits were listed by Azloff in an article in Huffington Post. However, I can tell you as a long time customer of both Ticketmaster and Live Nation I can tell you that this merger will harm the customer a lot more than help for the following reasons.

Many people believe that the free market concept works, and this merger does exactly the opposite. Instead of creating competition it joins the two companies together and eliminates competition. Since there is nobody to compete against this merged company will has the right to set their prices as high as possible. According to Ticketnews, Ticketmaster uses their sister site Ticketexchange to essentially reserve tickets for the company to resell via Ticketexchange at much higher rates. When Ticketmaster and Live Nation merge in my opinion this will give them more access to tickets. They will be able to hold these tickets and resell them for profit and scam the customers out of money.

Also, I purchased Kanye West tickets and Ron White tickets on both Ticketmaster and Live Nation. Both of these companies change about 30% in taxes on any ticket purchase. These fees will only become more expensive with the absence of competition. If a company has no reason to lower prices they will bring them higher. Tickets will go unsold because there are so many available and the people that purchase the tickets will only be forced to pay more in the long run. It will become harder to access tickets and the tickets will become more expensive than they already are with more taxes. Also, I believe the two companies will have a limited number of positions and this will cause them to fire at least half of their staff. This will lead to higher unemployment and I believe the 25 to 30% taxes that Ticketmaster and Live Nation already charge will only increase.

Sources:

http://www.huffingtonpost.com/2010/01/25/live-nation-ticketmaster-_n_435821.html

http://www.billboard.biz/bbbiz/content_display/industry/e3i73b3660e2c6025e6ec1b2e98a5e7328e

http://www.ticketnews.com/Ticketmaster-Buys-TicketsNow018155