Senate Spotlight On Live Nation, Ticketmaster February 23, 2009
- Touring
By Billboard Staff
The Senate Judiciary Committee’s first hearing on the proposed merger between live entertainment giants Live Nation and Ticketmaster Entertainment is set for Tuesday (Feb. 24).
The subcommittee on antitrust, competition policy and consumer rights will meet at 2:30 p.m. EST in the Dirksen Senate Office Building in Washington, D.C. The hearing is titled "The Ticketmaster/Live Nation Merger: What Does it Mean for Consumers and the Future of the Concert Business?" and will be webcast on the subcommittee's Web site.
Witnesses scheduled to appear include Ticketmaster CEO Irving Azoff, Live Nation president/CEO Michael Rapino, JAM Productions chairman and executive VP Jerry Mickelson, and the Center of American Progress' David Balto.
The subcommittee is chaired by Herb Kohl, D-Wis. Its members also include Sen. Chuck Schumer, D-N.Y., and Sen. Orrin Hatch, R-UT.
It surprised no one when the proposed merger of Live Nation and Ticketmaster Entertainment triggered an antitrust probe by the U.S. Department of Justice. At a time when live entertainment remains one of the healthiest sectors of the troubled music business, Live Nation and Ticketmaster together would control the majority of box-office dollars, the myriad revenue opportunities that come from concert ticketing and the unlimited e-commerce that the fan-ticket connection brings to live music.
Following the Feb. 10 announcement of the possible merger, Department of Justice spokesperson Gina Talamona said it would "vigorously enforce antitrust laws and therefore thoroughly investigate the proposed deal."
But it's an investigation that could take months or longer -- and the DOJ has probed Ticketmaster in the past. In 1991, it approved Ticketmaster's acquisition of its major competitor, Ticketron. But in 1994 the DOJ decided to investigate after complaints of anticompetitive practices surfaced.
This time, the investigative process of the DOJ and other regulatory agencies -- such as the Federal Trade Commission -- is hard to predict. Attorney Marc G. Schildkraut, partner in Washington, D.C., firm Howrey, thinks the deal "will be in for an extended investigation, which only about 3% of mergers get. Does it raise barriers to entry? Could an outside party looking to enter the market get into any venues? If entry is easy, then it's not a problem."
With live music already the most reliable income stream for most artists, record labels would wield even less power and would assume more limited roles as distributors and, to a lesser extent, marketers.
Independent promoters have to be worried that they could be on the outside looking in and, like AEG, would probably do anything in their power to keep this merger from happening, including appealing to the U.S. Department of Justice on antitrust grounds. Venues could lose any leverage they had when two giants competed for their business.
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