Politicians Demand Scrutiny of Live Nation-Ticketmaster Merger

July 28, 2009 10:43 AM ET

Lawmakers came out in force against the Ticketmaster/Live Nation merger yesterday as politicians asked the Justice Department to review the potential merger with "great skepticism," Billboard reports. New Jersey Rep. William Pascrell argued that Live Nation Ticketmaster "would enjoy a virtual stranglehold over the live entertainment industry," in a letter to the Justice Department that was signed by 50 more bipartisan representatives.

Senator Herb Kohl of Wisconsin, the Chairman of the Antitrust, Competition Policy and Consumer Rights Subcommittee — in a letter also addressed to Assistant Attorney General Christine A. Varney, who will next rule on the pending merger — recommended that the Justice Department approve the merger "only if it finds that it likely will not substantially reduce competition in the concert ticketing and promotion markets." "Based on our investigation and testimony at our hearing, it is clear that this merger raises serious competitive concerns warranting thorough scrutiny," Kohl wrote, adding the merger creates overlap and "vertical competition issues."

The proposed merger would find Ticketmaster, the nation's biggest ticketing service and owners of Front Line Management and secondary ticketing site TicketsNow, joining up with Live Nation, America's biggest concert producer. Live Nation, which also owns dozens of amphitheatres and has inked 360 deals with artists like Madonna and Jay-Z, launched their own ticketing service late last year in a move that was expected to create competition in the ticketing market. Instead, the two companies quickly began talks to merge, announcing plans to create a joint company called Live Nation Ticketmaster in February 2009.

"Our concerns are heightened by the fact that Live Nation recently entered into the ticketing business to compete with Ticketmaster. This needed competition will be lost if this merger is completed," Kohl wrote in February after the merger was announced. "What does Live Nation's decision to merge with its competitor rather than fight it in the market tell us about any company's ability to compete with Ticketmaster? If Live Nation can't compete, who can?"

Both Pascrell Jr. and Kohl mentioned Ticketmaster's recent fiasco involving Bruce Springsteen, when the ticketing company rerouted consumers to a more expensive secondary tickets site when regular-priced tickets were still available. Ticketmaster blamed the mishap on a technical error, but a "furious" Springsteen and New York Senator Chuck Schumer were quick to lash out against Ticketmaster. As Kohl notes in his letter to Varney, "the problems arising from the Bruce Springsteen … could be a warning sign of things to come should this merger be consummated."

Related Stories:
Bruce Springsteen "Furious" At Ticketmaster, Rails Against Live Nation Merger
Live Nation and Ticketmaster Announce Merger Agreement
New York Senator Introduces Ticket Legislation After Botched Springsteen Onsale

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