Live Nation and Ticketmaster are expected to reach a deal combining their ticketing, artist-management companies either later this afternoon or early Tuesday, after the boards of both companies spent most of the weekend hammering out issues.
One major issue yet to be resolved, however, is whether the combined company will be able to overcome all of the antitrust scrutiny it’s expected to receive.
Live Nation and Ticketmaster have opposed charges that their combination would create a monopoly by claiming that the two companies aren’t really in competition with each other. (You could’ve fooled us after everything you did over the past two years to capitalise on the other’s winning business strategies.)
The Wall Street Journal outlines the monopoly argument regulators could make:
[S]ome competitors of Live Nation have said they fear that the merged company could exert undue influence. For instance, a venue might feel obligated to renew its contract with Ticketmaster lest Front Line artists or Live Nation tours be steered to venues that were still Ticketmaster clients. People close to Ticketmaster and Live Nation dismissed those concerns, saying they will base such decisions on what is best for the artists they represent.
Bert Foer, an antitrust enforcement advocate, noted that regulators could oppose the merger on the grounds that it would represent “vertical” integration of the concert industry by bringing into one organisation so many segments of the value chain between performers and fans. In recent years, however, U.S. regulators have not typically opposed mergers on vertical-integration grounds. But the Obama administration could seek to change that, particularly given widespread public animosity toward both companies, especially Ticketmaster.
It is also likely, as the Journal pointed out, that some of both companies’s assets might have to be dumped before a deal can be completed. Indeed, it’s probably likely that Live Nation’s brand new ticketing service will be a casualty of this merger, which means that all of the money and manpower that went into building it was a waste.
Less interesting factoids about the partnership, courtesy of the WSJ:
- The combined company will be called Live Nation Entertainment, not Live Nation Ticketmaster (sorry, Ticketmaster)
- Live Nation CEO Michael Rapino will be the CEO of the combined company
- Irving Azoff, who heads Ticketmaster and ran Front Line Management before the two merged, will continue overseeing Front Line
- Ticketmaster chairman Barry Diller will be nonexecutive chairman of the combined company