July 28, 2009

By By Diane Bartz, Reuters

The proposed merger of ticketing giant Ticketmaster and Live Nation, the world's largest concert promoter, should be closely scrutinized by the Justice Department, according to the chair of a Senate antitrust subcommittee and 50 members of the U.S. House of Representatives.

Sen. Herb Kohl, chair of the Judiciary Committee's antitrust subcommittee, said the merger would combine Ticketmaster, the nation's dominant ticket seller, with Live Nation, which has its own ticketing business.

"It is clear that this merger raises serious competitive concerns warranting thorough scrutiny," wrote Kohl to Christine Varney, head of the Justice Department's antitrust division.

The deal has been criticized by superstar Bruce Springsteen, politicians like Senator Charles Schumer, and legions of music fans commenting in Internet chat rooms.

Fifty members of the U.S. House of Representatives signed a letter on July 27 written by Rep. Bill Pascrell which also expressed concern about the deal.

"We see little to commend this transaction," said the letter, which cited "competitive harm in the ticketing and other industry markets" because of the deal.

"Consumers, business managers, artists, independent promoters, and music fans in every state are likely to suffer if the merger is allowed to occur. We urge you to give this transaction the closest possible scrutiny and provide citizens the antitrust protection they deserve," said the letter, which was also addressed to Varney.

In mid-June, Britain's consumer watchdog, the Office of Fair Trading, raised antitrust concerns over the planned merger and said it was referring the deal to the Competition Commission, Britain's competition regulator. The Competition Commission is due to report by Nov. 24.

Live Nation Chief Executive Michael Rapino said in mid-July that he expected the merger to close by the end of the year.

Kohl wrote that the deal would create "an enormous, vertically integrated entertainment giant, which will control everything from artist management, concert promotion, concert venues, and merchandise sales to primary and secondary market ticket sales."

"The combined entities would be a company of unparalleled size and scope without equal in the market," he wrote.

"I... urge the Justice Department to carefully scrutinize each of these issues under the antitrust laws, and only approve the merger should it determine that the transaction is unlikely to lead to higher prices for consumers," wrote Kohl.

Subscribe to Billboard magazine today!