Interesting development here. Not sure what to think of this at all!
Live Nation Inc. and Ticketmaster Entertainment Inc. announced plans to merge Tuesday, combining the nation’s biggest concert promoter with the largest seller of tickets for live entertainment.
The new company, which will be called Live Nation Entertainment, will have a value of about $2.5 billion based on current prices and excluding net debt. The merger is expected to close in the second half of the year.
“Being able to put Live Nation and Ticketmaster into an equal partnership will allow the companies to get through this difficult period and be able to expand live entertainment options to audiences throughout the world,” said Barry Diller, chairman of Ticketmaster Entertainment, in a statement.
Still, analysts say the new venture, which is subject to approval by the Department of Justice, raises antitrust concerns.
Live Nation, which recently launched its own ticketing operation, has gone from just promoting concerts to actually selling music in recent months. Artists such as Madonna and Jay-Z have both signed multimillion dollar contracts to give Live Nation the rights to their next few albums.
Ticketmaster, meanwhile, has recently come under fire from regulators for an episode involving TicketsNow, its ticket reseller business.
From the Chicago Tribune:
Concert ticket prices have doubled in the last decade, and consumers can expect no relief now that Live Nation and Ticketmaster, the two most powerful entities in the concert business, confirmed Tuesday their intentions to merge.
It’s easy to see why Live Nation Inc. and Ticketmaster Entertainment Inc. want to blend their operations into a new entity called Live Nation Entertainment. They are competitors who would create a $6 billion company that would operate the majority of major concert venues in America, sell the tickets to events at those venues, and manage many of the artists who play there. Their union would instantly create a full-service music company that would reduce the economic clout of other concert promoters (including Chicago’s Jam Productions), ticket sellers and even record companies.
Far more difficult to fathom is how this partnership would in any way benefit consumers, and how it could pass muster in a federal antitrust proceeding.
News of the merger has already set off alarm bells in some prominent corners. Connecticut Atty. Gen. Richard Blumenthal and U.S. Rep. Bill Pascrell (D., N.J.) are among officials calling for investigations and hearings into the merger. Last week, Pascrell denounced Ticketmaster for funneling fans seeking to buy Bruce Springsteen concert tickets to ticketsnow.com, a Ticketmaster-owned company that sells concert tickets significantly above face value. Springsteen himself called the Ticketmaster redirection of his tickets “a pure conflict of interest.”
In an open letter to his fans, Springsteen went even further: “The one thing that would make the current ticket situation even worse for the fan … would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing.”
In addition to creating its own ticketing company, livenation.com, Live Nation has completed deals with major artists such as Jay-Z, Madonna and Shakira to represent them in a variety of multimedia platforms and share in revenue streams, from merchandise to recorded music. Ticketmaster has been expanding its business, as well, recently partnering with Irving Azoff’s Front Line management company and a stable of talent (Christina Aguilera, Eagles, Guns N’ Roses, Jimmy Buffett, Van Halen) that would play many of the same arenas and stadiums booked by Live Nation. In merging the two entities, Live Nation-Ticketmaster would hold a significant position in every aspect of the music business.