Ticketmaster/Live Nation Merger Approved

The U.S. Justice Department has recently approved the controversial merger between ticket selling giant Ticketmaster and concert promoter Live Nation. Ticketmaster has long been the world’s largest ticket seller operating in 20 global markets.  Established in 1976 the company provides ticket sales, ticket resales and marketing and distribution services. In 2008 Ticketmaster sold more than 141 million tickets valued at over $8.9 billion dollars.  Ticketmaster Entertainment’s business also includes Front Line Management Group, Inc., one of the world’s leading artist management companies.

Live Nation is the world’s largest concert promoter which also owns and operates hundreds of concert venues. The company also holds exclusive deals with certain marquee artists.

Thankfully the U.S. Justice Department only agreed to the merger upon certain said conditions which include Ticketmaster having to license its ticketing software to competitor AEG, and sell its subsidiary Paciolan to Comcast Spectacor. Two prerequisites which should theoretically result in a more even playing field.  Time will tell.

The union between the two colossal entertainment industries has drawn some concerns regarding antitrust laws. Ticketmaster is already the largest ticket selling entity in the United States and by joining forces with Live Nation will represent a mammoth 80 percent of market sales. And with both companies maintaining exclusive rights with either venues, artists, or sports teams the potential for up and coming ticket sellers, and/or promoters to successfully gain entry in to the business is greatly diminished.

The issue that many consumer rights activists and antitrust proponents have with this merger is that it will not only combine the two largest ticket sellers, but that it will also create an entity which will hold the potential to control all aspects of the live entertainment chain- from artist management, to concert promotion, to ticket sales. And on top of all of this, Ticketmaster ALSO has its hand in ticket resales which occur on the secondary market after tickets have been “sold out” at face value. A service that is tantamount to online legalized ticket scalping.

Here the same transaction that the average Joe could get arrested for on the street is permitted by law to occur for designated companies.  The only difference being that these Internet site “ticket resales” often occur at much higher price mark-ups than are seen outside concert venues between individuals.

A complaint was recently filed when customers attempting to purchase Springsteen tickets through the Ticketmaster site which automatically diverted to TicketNow’s web page (also owned by Ticketmaster) where the tickets were priced 2-3 times higher than face value.  Concert goers have long voiced their frustrations with Ticketmaster’s inordinately high tack on fees. The percentages vary but some fees on the site have been known to go for up to 30% of the ticket price. The extra fees  have been explained as a combination of processing fees, convenience charges and taxes. However, with “convenience” costing almost the price of another ticket many would rather head to ye ol’ ‘box office’ on foot.

Some emerging companies are attempting to offer an alternative to the Ticketmaster/ Live Nation monster. One such company, known as Fair Ticketing Fund, promises to provide participating venues or event promoters with tens of thousands of dollars in funding; a customizable ticketing solution at no cost, and a significant reduction in service fees for ticket buyers.

However, the fact that Ticketmaster was able to acquire its #1 competitor should raise grave concerns regarding monopoly issues. If Live Nation, the most viable contender for being an alternative to Ticketmaster, decided it would be more profitable to join forces with the competition, rather than remain in the business as a separate entity , what hope do any smaller, unknown companies have?  And, with no formidable competitors to keep behavior in check the potential for even greater abuse of a dominant market position looms…     Ahh, the price of convenience.

– Amanda Decker

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