Live Nation Acquires Ticketmaster
February 10, 2009 at 10:57 AM (PT)
As expected, LIVE NATION INC has agreed to acquire TICKETMASTER ENTERTAINMENT to create LIVE NATION ENTERTAINMENT, which would dominate the concert promotion and ticket sale industries. REUTERS reports the price was about $400 million in stock.
However, even before the deal was publicly announced, U.S. Senator CHARLES SCHUMER criticized it for anti-trust implications and, called for a federal probe into TICKETMASTER. "This merger would give a giant, new entity unrivaled power over concert-goers and the prices they pay to see their favorite artists and bands," he said in a statement. "It must be viewed skeptically and scrutinized with a fine-toothed comb by the JUSTICE DEPARTMENT and the FEDERAL TRADE COMMISSION."
Under terms of the agreement, described as a "called a merger of equals," TICKETMASTER shareholders will receive 1.384 shares of LIVE NATION common stock for each share of TICKETMASTER they own. LIVE NATION will own 49.99% of the combined company, while TICKETMASTER will hold the remaining 50.01.%.
LIVE NATION CEO MICHAEL RAPINO will head the new company as CEO while TICKETMASTER ENTERTAINMENT CEO IRVING AZOFF will be Executive Chairman. TICKETMASTER Chairman BARRY DILLER will be non-executive Chairman.
Stock in both companies dropped after the deal was announced; some of that may be attributable to the fact that more than a few parties -- including regulators, music fans, artists and record labels -- think the new entity would exert a monopoly over the live music business. According to POLLSTAR, Ticketmaster sells tickets for more than 80% of the major arenas and stadiums in the U.S. Live Nation is the world's largest concert promoter, owning more than 140 venues, and has even struck comprehensive deals to the tours of such artists as MADONNA, JAY-Z, U2, NICKELBACK and SHAKIRA.
That breadth of its holdings is what has not only provoked the concern of SCHUMER, but of Connecticut Attorney General RICHARD BLUMENTHAL, who is already probing allegations that TICKETMASTER diverted fans to its own scalping agency to sell BRUCE SPRINGSTEEN tickets at a much higher price (NET NEWS, 2/9).
Antitrust experts told REUTERS that Federal approval for the merger is anything but assured, especially since new U.S. President BARACK OBAMA has pledged to toughen antitrust enforcement. There is also an interesting subplot of sorts, which may or may not influence the fate of this deal: Currently sitting on TICKETMASTER's board is JULIUS GENACHOWSKI, who is reported to be Pres. OBAMA's choice to head the FCC.