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Ticketmaster, Live Nation Defend Merger at Hearing (Update3)
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By James Rowley
Feb. 24 (Bloomberg) -- Skeptical U.S. lawmakers questioned claims by the heads of Ticketmaster Entertainment Inc. and Live Nation Inc. that the proposed merger of the two largest companies in live music won’t hurt competition.
“You strain our sense of commonsense,” said Herb Kohl of Wisconsin, the Democratic chairman of a Senate Judiciary antitrust subcommittee. “Why should we let you merge?” The combined company will put “a stranglehold on all segments of the concert business,” Kohl said.
Ticketmaster Chief Executive Officer Irving Azoff and Live Nation’s president and CEO, Michael Rapino, defended the deal today at a hearing before the panel in Washington. Combining the No. 1 ticket-selling network and leading concert promoter won’t mean higher ticket prices as some have alleged, they testified.
“The fierce competition we face in our businesses will continue to thrive,” Azoff said, asserting the combined company will benefit fans by offering more choices in seating and price flexibility. Azoff declined to answer when asked if the combined firm could pressure arena owners to use its ticketing service.
Rapino said Live Nation, with a market share of 35 to 38 percent, faces competition from “strong local promoters” as well as nationwide promoters and said the deal will help fill up arenas that often are almost half empty for concerts.
Outcry From Lawmakers
The proposed merger has produced an outcry from lawmakers, fans and recording artist Bruce Springsteen, who said the deal would create a “near monopoly.” Critics say the combined company would gain the economic power to dominate ticket sales, concert promotion and artist management.
It’s “monopolistic behavior plain and simple,” said Senator Charles E. Schumer, a New York Democrat. The combined company “would be a behemoth that would operate the majority of concert venues” and “have a hand in every step of the process of going to see a concert,” he said.
Van Halen, Seal, Shakira and Smashing Pumpkins are among the artists, concert promoters and venue operators who sent letters to lawmakers in support of the merger.
“Van Halen succeeded based on our record sales and the many tours that we did to increase record sales,” Eddie Van Halen said in a letter to lawmakers today. “But that business model just doesn’t work any more.”
Fear for Careers
Washington concert promoter Seth Hurwitz testified that “fear for their careers” is the reason more performers haven’t complained about the merger. They “don’t dare cross the largest ticket promoter,” he said.
Live Nation, which owns the most performance venues, also has exclusive deals with Madonna, U2 and Jay-Z.
Critics argue that Ticketmaster sought to purchase Live Nation only after the concert promotion company began competing in the market for ticket sales.
“A dominant firm cannot use acquisitions, such as this one, to preserve its monopoly power,” David Balto, a Washington antitrust lawyer, said in testimony submitted to the committee. Ticketmaster “is trying to buy its rival out of the market.”
Ticketmaster Chairman Barry Diller disputed such criticism when the merger was announced on Feb. 10. “Ticketmaster does not set prices. Live Nation does not set prices. Artists set prices,” he told investors on a conference call.
Ticketmaster further earned the ire of lawmakers after Springsteen concert-goers were steered to a company-owned ticket resale Web site, TicketsNow, where admission cost more.
Federal Investigations
Schumer and Representative Bill Pascrell, a New Jersey Democrat, had demanded a Federal Trade Commission investigation of the Springsteen episode. They also urged antitrust enforcers to block the merger, and the Justice Department said it will conduct a “thorough investigation” of the deal.
Schumer said today he doubts Ticketmaster’s explanation that the Springsteen snafu was “the result of a computer glitch.” It “seems to be much more about money-making than about malfunction,” he said.
Azoff said he apologized to Springsteen and his fans and promised to prevent a recurrence. He also acknowledged, in response to a question, that ticket prices have been rising.
On the eve of today’s hearing, Ticketmaster reached a settlement of consumer complaints to New Jersey’s attorney general by agreeing to offer 2,000 tickets to fans who couldn’t get tickets to two Springsteen concerts in May. The company will conduct a random ticket drawing for 1,000 fans, who will be able to buy two tickets apiece for posted prices.
Retiring the Name
Azoff and Rapino previously acknowledged that the companies plan to retire the name Ticketmaster because it has generated antagonism. The combined company would be named Live Nation Entertainment.
Rival concert promoter Jerry Mickelson, chairman of Chicago-based JAM Productions, testified today it would be hard for him to compete against the combined company. The merged business would be able to tell arena operators, “If you want my concerts, you have to use my ticketing; if you don’t use my ticketing, you won’t get my concert,” he said.
Azoff declined an invitation from Senator Amy Klobuchar, a Minnesota Democrat, to offer a rebuttal.
Ticketmaster rose 60 cents, or 13.5 percent, to $5.05 at 4:30 p.m. New York time in Nasdaq Stock Market trading. Live Nation gained 45 cents, or 14 percent, to $3.66 in New York Stock Exchange composite trading.
To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net
Ticketmaster, Live Nation Defend Merger at Hearing (Update3)
Email | Print | A A A
By James Rowley
Feb. 24 (Bloomberg) -- Skeptical U.S. lawmakers questioned claims by the heads of Ticketmaster Entertainment Inc. and Live Nation Inc. that the proposed merger of the two largest companies in live music won’t hurt competition.
“You strain our sense of commonsense,” said Herb Kohl of Wisconsin, the Democratic chairman of a Senate Judiciary antitrust subcommittee. “Why should we let you merge?” The combined company will put “a stranglehold on all segments of the concert business,” Kohl said.
Ticketmaster Chief Executive Officer Irving Azoff and Live Nation’s president and CEO, Michael Rapino, defended the deal today at a hearing before the panel in Washington. Combining the No. 1 ticket-selling network and leading concert promoter won’t mean higher ticket prices as some have alleged, they testified.
“The fierce competition we face in our businesses will continue to thrive,” Azoff said, asserting the combined company will benefit fans by offering more choices in seating and price flexibility. Azoff declined to answer when asked if the combined firm could pressure arena owners to use its ticketing service.
Rapino said Live Nation, with a market share of 35 to 38 percent, faces competition from “strong local promoters” as well as nationwide promoters and said the deal will help fill up arenas that often are almost half empty for concerts.
Outcry From Lawmakers
The proposed merger has produced an outcry from lawmakers, fans and recording artist Bruce Springsteen, who said the deal would create a “near monopoly.” Critics say the combined company would gain the economic power to dominate ticket sales, concert promotion and artist management.
It’s “monopolistic behavior plain and simple,” said Senator Charles E. Schumer, a New York Democrat. The combined company “would be a behemoth that would operate the majority of concert venues” and “have a hand in every step of the process of going to see a concert,” he said.
Van Halen, Seal, Shakira and Smashing Pumpkins are among the artists, concert promoters and venue operators who sent letters to lawmakers in support of the merger.
“Van Halen succeeded based on our record sales and the many tours that we did to increase record sales,” Eddie Van Halen said in a letter to lawmakers today. “But that business model just doesn’t work any more.”
Fear for Careers
Washington concert promoter Seth Hurwitz testified that “fear for their careers” is the reason more performers haven’t complained about the merger. They “don’t dare cross the largest ticket promoter,” he said.
Live Nation, which owns the most performance venues, also has exclusive deals with Madonna, U2 and Jay-Z.
Critics argue that Ticketmaster sought to purchase Live Nation only after the concert promotion company began competing in the market for ticket sales.
“A dominant firm cannot use acquisitions, such as this one, to preserve its monopoly power,” David Balto, a Washington antitrust lawyer, said in testimony submitted to the committee. Ticketmaster “is trying to buy its rival out of the market.”
Ticketmaster Chairman Barry Diller disputed such criticism when the merger was announced on Feb. 10. “Ticketmaster does not set prices. Live Nation does not set prices. Artists set prices,” he told investors on a conference call.
Ticketmaster further earned the ire of lawmakers after Springsteen concert-goers were steered to a company-owned ticket resale Web site, TicketsNow, where admission cost more.
Federal Investigations
Schumer and Representative Bill Pascrell, a New Jersey Democrat, had demanded a Federal Trade Commission investigation of the Springsteen episode. They also urged antitrust enforcers to block the merger, and the Justice Department said it will conduct a “thorough investigation” of the deal.
Schumer said today he doubts Ticketmaster’s explanation that the Springsteen snafu was “the result of a computer glitch.” It “seems to be much more about money-making than about malfunction,” he said.
Azoff said he apologized to Springsteen and his fans and promised to prevent a recurrence. He also acknowledged, in response to a question, that ticket prices have been rising.
On the eve of today’s hearing, Ticketmaster reached a settlement of consumer complaints to New Jersey’s attorney general by agreeing to offer 2,000 tickets to fans who couldn’t get tickets to two Springsteen concerts in May. The company will conduct a random ticket drawing for 1,000 fans, who will be able to buy two tickets apiece for posted prices.
Retiring the Name
Azoff and Rapino previously acknowledged that the companies plan to retire the name Ticketmaster because it has generated antagonism. The combined company would be named Live Nation Entertainment.
Rival concert promoter Jerry Mickelson, chairman of Chicago-based JAM Productions, testified today it would be hard for him to compete against the combined company. The merged business would be able to tell arena operators, “If you want my concerts, you have to use my ticketing; if you don’t use my ticketing, you won’t get my concert,” he said.
Azoff declined an invitation from Senator Amy Klobuchar, a Minnesota Democrat, to offer a rebuttal.
Ticketmaster rose 60 cents, or 13.5 percent, to $5.05 at 4:30 p.m. New York time in Nasdaq Stock Market trading. Live Nation gained 45 cents, or 14 percent, to $3.66 in New York Stock Exchange composite trading.
To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net