Live Nation (LYV) and Ticketmaster Entertainment (TKTM) on Monday reportedly received approval for their merger from the Justice Department. The move paves the way for Live Nation Ticketmaster, a titanic entertainment company that would handle ticketing, artist management, and live music. LNT would have managing interests in about 350 artists and exclusive booking and promotional deals with more than 125 venues around the country, and it would handle ticketing for events outside of music, like baseball games. Shares of both companies surged almost 10% on news of the merger's approval.
Consumer advocates have been protesting a Ticketmaster–Live Nation merger since it was announced. Last fall, The Wall Street Journal reported that the Justice Department would need "serious concessions" on the part of both companies.
Those Dreaded "Service Fees"
Ticketmaster handles ticketing for between 70% and 80% of live events in the U.S. It's also in the artist-management game, with a controlling stake in Front Line, the management company founded by Ticketmaster CEO Irving Azoff, that handles superstars including the Eagles, Christina Aguilera, and Shakira. Public opinion of Ticketmaster has been decidedly negative, due largely to the "service fees" it tacks onto ticket prices.
Live Nation is the dominant event promoter in the U.S. Spun off in 2005 from radio giant Clear Channel, Live Nation owns or operates more than 100 U.S. venues, including clubs branded with the names House Of Blues and Fillmore. The company also signed high-profile "360 deals," whose multimillion-dollar advances give the company multiple revenue streams, including recorded music and tours, from big names like Jay-Z, Madonna, and U2.
Although the two companies have worked together, Live Nation tried to dial back its relationship with Ticketmaster in 2008, when a ticketing agreement between the two companies expired. Live Nation launched a competing service last year, to mixed reports. Consumers complained about exorbitant service fees and servers that couldn't handle high-demand on-sales. News of the merger came out shortly after this roll-out.
Consumer Protests Continue
But the music industry and music fans have railed against the merger since its announcement last February. A coalition of ticket brokers and public-interest groups, TicketDisaster.org, cites Ticketmaster's history of anti-competitive practices, has encouraged consumers to voice their opposition to the Justice Department.
This month, rumblings about Justice approving the merger due to lawyers' being "unenthused" about opposing it in court did not come to fruition. More recent reports suggest that Justice lawyers are actively preparing arguments against the deal.
Posted by MovieMiguel at 1/25/2010 09:14:00 PM