According to an official press release, the boards of Live Nation and Ticketmaster have agreed to terms to merge the two companies into one massive live-music giant called Live Nation Entertainment. Although Live Nation recently launched its own ticketing service and signed artists like Madonna and Jay-Z to huge contracts, and Ticketmaster joined forces with Irving Azoff's Front Line Management (which oversees the careers of superstars like Guns n' Roses and Christina Aguilera), both companies have seen their stock shares plummet and relationships with consumers sour in recent weeks. Rolling Stone reported on the possible merger last week; the two companies hope to complete it by the second half of 2009.
According to the press release, Live Nation and Ticketmaster will combine their ticketing, marketing, data centers and back-offices. "The companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $2.5 billion," it reads. "Under the agreement, Ticketmaster shareholders will receive 1.384 shares of Live Nation common stock for each share of Ticketmaster they own, subject to certain adjustments defined within the agreement. Live Nation and Ticketmaster shareholders will each own approximately 50 percent of the combined company."
So how will this affect consumers? In light of the two companies' recent battles with Phish and Bruce Springsteen fans due to bungled onsales, the announcement promises Live Nation Entertainment will improve access and transparency, create more choice in ticket price options, invest in better ticketing technology and increase event attendance. On a conference call today, Ticketmaster blamed a glitch involving Visa credit cards for the Springsteen debacle, saying the cards froze the system and routed fans to Tickets Now. Several hours later, Ticketmaster issued a revised statement blaming its own software, rather than Visa's, for the problem.
While it sounds good on paper for both sides, the merger will likely face a significant antitrust battle as it appears the two companies will be forming a ticketing monopoly. Ticketmaster has faced such allegations in the past; joining forces with the company that was supposed to serve as its competition will likely garner a long look from both the Justice Department and Federal Trade Commission.
Bruce Springsteen has already spoken out against the merger, saying, "The one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing. If you, like us, oppose that idea, you should make it known to your representatives." Springsteen now has a friend in the Oval Office who said in 2007, "Antitrust helps to keep that system in force. It addresses the temptation that some businesses will sometimes experience, to merge with key rivals instead of outperforming them, to agree not to compete too hard, or to sabotage rivals' efforts to serve consumers instead of redoubling their own." It's safe to assume Live Nation Entertainment's journey toward approval will certainly be Sisyphusian.
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• Ticketmaster and Live Nation Battle To Fill Void Left By Labels