The Merger of Ticketmaster and Live Nation

Ticketmaster, the largest ticketing company in America, and Live Nation, the worlds largest promoter of live concerts, received permission by the U.S. Department of Justice today to merge the two entities. The merger is, however, conditional. One of the conditions, in order to appease one of the most vocal critics of the merger, is that Ticketmaster must license a copy of its ticketing software to AEG (Anschutz Entertainment Group), the second largest concert promoter, behind Live Nation, and Ticketmaster's largest customer. Additionally, Ticketmaster must divest their interest in Paciolan, Inc., a ticketing company it currently owns. Comcast-Spectator, a sports and entertainment company with relationships with a number of concert venues, has already signed a letter of intent to purchase the company. Last, the newly merged company is forbidden from retaliating against any concert venue that uses a non Ticketmaster ticketing outlet for the next ten years

While Live Nation's CEO, Michael Rapino, has argued, according to an account in Rolling Stone magazine that the merger would allow the two companies to consolidate power and flexibility to cut costs, benefiting the consumer in the long term through reduced ticket prices and service fees, this remains to be seen. This argument is coming from, and to be believed by a company, Ticketmaster, that has steadily increased their "convenience fees" including fees to print an e-ticket, requiring Ticketmaster to expand no resources of their own as a "convenience." According to Ticketdisaster.org, Ticketmaster has generated $5 billion in convenience fees in the past five years, and their fees can be as much as 30% of the original ticket price. The reduction in operating costs that Rapino suggests certainly won't be coming from the artist, as it currently stands, due to the demise of record sales, many artists main source of revenue comes from their live performances and merchandise sold at these. Another factor that makes this suggestion unlikely is that Ticketmaster has locked most major venues in the United States into long-term exclusivity agreements that prohibits them from using any other ticket brokers.

Consumer groups, music artists, and independent promoters all petitioned against this merger for these very reasons. The Web site Ticketdisaster.org was made in order to educate the public as well as deter law makers from supporting the merger. The Web site describes Ticketmaster as a "monopoly like dominance" due to its control of 70%-80% of all concert ticket sales. The website further points out that Ticketmaster owns the artist management business, Front Line Management, that contracts with over 200 artists and Live Nation owns or has exclusive deals with 139 venues, as well as manages 150 artists.

Personally, I stopped attending music events of any modern, mainstream and/or extremely popular artist or band (past and present) at least 10 years ago. For most concerts you shell out $45 for General Admission or seating in the last row of a theater where you can't even see the artist. Lines are long, parking is expensive, and forget getting a drink. If you opt to pony up for premier seating you are looking at as much as $200 for a mediocre seat. If fees continue to increase, I see very little incentive to attend any sort of live entertainment, and I am sure I am not the only one.

Sources:
Jim DeRogatis, "Meet the New Boss: Ticketmaster-Live Nation merger approved.", Chicago Sun Times.
Steve Knopper, "Music Industry Reacts to U.S. Approval of Live Nation- Ticketmaster Merger.", Rolling Stone.
Lorraine Woellert and Adam Satariano, "Ticketmaster-Live Nation Cleared by U.S. with changes (Update4)." BussinessWeek