Ticketmaster-Live Nation Update: DOJ Doesn't Like It Either
Last week, I wrote about Great Britain questioning the Ticketmaster-Live Nation merger. I just wanted to provide a quick update, as news today indicates that the U.S. antitrust authorities have similar worries about the deal. The Wall Street Journal reports:
Negotiations are continuing between Justice Department officials and executives of Ticketmaster Entertainment Inc. and Live Nation Inc., and no final decision has been reached. But department officials have let it be known that there are elements of the proposed merger that could prompt them to sue to block it, said one person familiar with the situation.
The ticketing giant and the world's largest concert promoter "now sense they need to make some serious concessions," and are worried the Justice Department will seek to block the deal, this person said.
The article doesn't offer any specific examples of what some of those potential concessions might be, but they likely include selling off various assets to allow for better competition. It does, however, provide this nifty chart explaining just why the merger poses such a huge advantage for the new entity in the concert space:
I'm not sure how you get around a merger providing close to 80% control of concert ticketing and promotion. In order to do so, I'd imagine there are some pretty creative minds trying to find concessions that will
Of course, beyond the likelihood that they won't identify concessions that the DOJ would find adequate, there's a secondary worry: the new Obama administration inspired Justice Department could seek to make an example out of Ticketmaster-Live Nation. This is its first high profile case, and DOJ's new antitrust chief Christine Varney has made no secret of the fact that she intends to be tough.
Interestingly, the parties admit that the merger would provide for the following new way to sell concert tickets, sure to aggravate pretty much every concertgoer:
The two companies would like to develop an airline-style pricing system that adjusts the price of concert tickets based on demand. They say the merger is necessary to get that done because it would reduce the number of contractual relationships required to approve such complex transactions.
Because there's nothing that brings me more pleasure than checking an airline ticket price, only to find out that it has gone up an hour later. I just can't wait to have the same experience with concert tickets.