Music Industry Reacts to U.S. Approval of Live Nation-Ticketmaster Merger

January 25, 2010 12:00 AM ET

Live Nation and Ticketmaster, the two biggest players in the $4.4 billion worldwide concert business, received U.S. Department of Justice approval Monday for a merger that is likely to affect every live-music fan, artist, agent, manager and promoter. In a statement, Ticketmaster's chief executive, Eagles manager Irving Azoff, called the decision "a great win for fans," but some in the business fear the companies' combined power will make it difficult for outsiders to promote shows and sell tickets. "It's disappointing to me. It's just another step in eliminating competition," says Buck Williams, a Nashville agent who represents R.E.M. and Widespread Panic. "They've pulled the rug out from under the entrepreneurs, to some degree."

The new Live Nation Entertainment, which will begin merging its operations as early as Wednesday, will own a huge chunk of the business: Ticketmaster's Front Line management company represents the Eagles, Jimmy Buffett, Christina Aguilera and many other artists, while Live Nation's exclusive clients include Madonna and Jay-Z; Ticketmaster has exclusive ticketing deals with most of the major U.S. arenas, while Live Nation owns and operates 140 top venues overall, including most of the amphitheatres; and, of course, Ticketmaster sells some 140 million tickets a year.

These combined assets make reps for some music stars optimistic. "My hope and belief is that there is going to be an expanded opportunity for touring artists to [experiment with] a variety of different products," says Jim Guerinot, manager of No Doubt, Nine Inch Nails and others. "And I look forward to trying those things."

Azoff and Live Nation's CEO, Michael Rapino, spent much of 2009 arguing the merged company would have the clout and flexibility to fix the "broken" concert business. The new Live Nation Entertainment, they said, would have the power and flexibility to cut costs, make more money from the lucrative resale market and ultimately reduce ticket prices and service fees. In one of the first major antitrust decisions during the Obama Administration, the Justice Department agreed — to a point. Before approving the merger, U.S. attorneys forced Ticketmaster to license its software to top competitor AEG Live and forbade the merged company from retaliating against any concert venue that uses a non-Ticketmaster ticketing outlet.

The agreement "promotes robust competition for primary ticketing services and preserves incentives for competitors to innovate and discount, which will benefit consumers," said Christine Varney, an assistant attorney in the Justice Department's antitrust division, in a statement. (Executives for Live Nation and Ticketmaster were unavailable for interviews. Several of the new companies top competitors refused comment or didn't return phone calls. AEG reps would only give a statement saying its Justice Department deal "will foster our ability to compete effectively in the ticketing, venue operation and live event promotion businesses.")

Will the merger lower ticket prices, as Azoff and Rapino insist? It's too early to say, but several artist reps were skeptical. "I don't think prices are going to come down," says Tom Windish, a Chicago agent who represents Animal Collective, Hot Chip, the Knife and dozens of other top indie artists. "I don't think it's going to change that much. I don't see Live Nation getting less money, I don't see artists getting less money and I don't see Ticketmaster charging a surcharge that's lower than [what] they can possibly get. If anything, it'll be higher."

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