Report: Live Nation, Ticketmaster Merger Becoming Likely
March 24, 2009 at 5:40 AM (PT)
When the world's biggest concert promoter and largest ticket seller said they would merge last month, it seemed unlikely that antitrust enforcers would approve the creation of such an entertainment giant. But, writes THE BOSTON GLOBE, some competition specialists, several of whom are former government officials, now say the combination of LIVE NATION INC. and TICKETMASTER ENTERTAINMENT INC. actually has a fair shot, though they were not certain if it finally could win approval.
The loudest critics of the deal say it will form an overly powerful live entertainment business that could raise ticket prices for consumers. But the issue facing the Justice Department is complex since LIVE NATION and TICKETMASTER are not traditional competitors.
The deal is known in antitrust language as a vertical merger, meaning the two businesses do not compete directly but provide complementary services or products. In this case, TICKETMASTER's ticketing and LIVE NATION's concert promotion.
The question facing government reviewers is whether the merged LIVE NATION ENTERTAINMENT's hold over the live music supply chain -- including artist relationships, venues, primary and secondary tickets, and merchandising -- is too tight and would choke off competitors.
"The DOJ will want to know if anybody else will be able to reach the minimum efficiency and sufficient scale necessary to compete with the new LIVE NATION," said VANDERBILT UNIVERSITY Professor LUKE FROEB, a former senior economist for the Federal Trade Commission and Department of Justice.
"This is a small merger with small potential overlap, I think they'll get a fair hearing," said FROEB, who gave testimony at a congressional hearing last month in WASHINGTON, D.C., on LIVE NATION's $225 million bid for TICKETMASTER.