Ticketmaster, Live Nation Merger Investigated

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On Tuesday, the world's largest ticket broker announced plans to merge with the nation's largest concert promoter. On Wednesday, several prominent lawmakers spoke out against the deal between Ticketmaster and Live Nation, which they say would be bad for consumers. Shortly after that press conference, the Department of Justice announced it's investigating the proposed merger.

If this sounds a little familiar, that's because Ticketmaster has attracted the attention of antitrust regulators before. Back in the 1990s, the alternative rock band Pearl Jam launched a boycott of Ticketmaster. And the band helped the Clinton Justice Department look into allegations that the ticket broker was using its huge market share to drive up prices.

That's still a problem, said Sen. Charles Schumer (D-NY). "The last thing we should do is give Ticketmaster more influence," he said at a news conference Wednesday, calling on the Justice Department to block the merger with Live Nation.

"If these two entities were to merge," Schumer said, "control of concert venues and representation of artists in those venues would be controlled by one organization, having profound and far-reaching implication for consumers, promoters and artists alike."

A Justice Department spokeswoman later confirmed that an investigation is under way, although she declined to say anything else. The department's earlier investigation of Ticketmaster ended without explanation 10 years ago.

"The Justice Department is going to have another to look at this," said Marc Schildkraut, a Washington, D.C., lawyer and a former antitrust regulator at the Federal Trade Commission. Investigators "may end up second-guessing what they did the first time around."

Schildkraut said regulators could have big problems with this merger, in part because a few months ago, Live Nation moved beyond its original business as a concert promoter and started selling tickets, too.

But Warren Miller, an analyst with Morningstar, an independent investment research company, said ticket sales are a small part of Live Nation's business.

"I'm not sure an antitrust challenge has much merit," Miller said, "if you compare what the two companies do: Live Nation bringing music promotion to the table and Ticketmaster bringing the ticketing services."

That's known as vertical integration. It didn't concern federal regulators during the Bush administration, said former Clinton regulator Schildkraut. On the other hand, he noted, the Obama administration has nominated Christine Varney, a lawyer and lobbyist who served on the Obama transition team, to be assistant attorney general for antitrust. "And she showed a lot of interest in these vertical theories," Schildkraut said.

Live Nation and Ticketmaster officials had no comment on the Justice Department's investigation. But when they announced the proposed merger earlier on Tuesday, they denied that it would cut out other players. And Barry Diller, chairman of the proposed new company, says it's not Ticketmaster's fault that ticket prices have doubled over the past decade. "Ticketmaster does not set prices. Live Nation does not set ticket prices. Artists set the prices," Diller said in a conference call.

Well, at least in theory. It was just last week that Ticketmaster caused a huge stink by shunting Bruce Springsteen's fans to another ticketing service — owned by Ticketmaster — that charges more for tickets. Critics included The Boss himself. That made the timing of this week's merger announcement seem awkward, to put it mildly. But Morningstar's Miller says this deal would face a lot of scrutiny, regardless.

"At any point, had these two companies really decided to merge, there would've been a lot of backlash anyway," Miller said. If the deal goes through, Miller thinks most consumers won't notice — because ticket prices will probably just continue their steady rise.

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