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Live Nation Ticketmaster Merger Hearing Becomes Battle Over Chicago Music Scene

February 25, 2009 9:36 AM ET

The Live Nation Ticketmaster merger was brought before the Subcommittee on Antitrust, Competition Policy and Consumer Rights yesterday, with the Chicago music scene at the epicenter of testimony both for and against the merger. According to the Chicago Sun-Times, the Windy City was used as an example of how the merger wouldn't violate antitrust laws, with Live Nation chief executive Michael Rapino citing that his company only put on 16 percent of the concerts in Chicago, compared to the 29 percent staged by Chicago-based concert company Jam Productions.

However, Jam's Jerry Mickelson, testifying against the merger, told the subcommittee that while Live Nation promotes fewer concerts in Chicago in Jam, Live Nation owns the arenas and amphitheatres. "U2 doesn't call us. Shakira doesn't call us. Coldplay doesn't call us," Mickelson told the committee, "They dominate the arena level. They control and have all of the outdoor amphitheaters... and with House of Blues, they are taking over the lower-level theater business as well." Mickelson also added that the potential merger was "vertical integration on steroids" and "the poster child for why the country has and needs antitrust laws," and told the subcommittee that Live Nation controlled 161 of the top 200 tours in 2001.

Rapino and Ticketmaster's Irving Azoff told the subcommittee that their concerts would help give an economic boost to cities, citing a two-day event Live Nation hosted in East Troy, Wisconsin that generated $5 million in revenues for the city. Azoff stressed that the companies had to merge to survive, telling the subcommittee, "This business is in far worse shape than many people realize."

Van Halen and Shakira, two artists under contract with the merging companies, wrote letters supporting the merger. The subcommittee, stacked with senators like Orrin Hatch and Chuck Schumer who were already against the merger, will tell the Department of Justice to "examine the merger closely" before deciding whether to approve it.

Related Stories:

Van Halen, Shakira, Seal Support Live Nation/Ticketmaster Merger
Ticketmaster Reaches Settlement With NJ Attorney General After Springsteen Ticketing Fiasco
Live Nation and Ticketmaster Announce Merger Agreement

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