Ticketmaster and Live Nation are two of the biggest players in the live entertainment and ticketing industry. In 2009, the two companies announced plans to merge into a new entity called Live Nation Entertainment, sparking significant controversy and antitrust concerns. This article will explore the history behind the merger, the key details of the deal, and the aftermath of creating this new live entertainment giant.
The History of Ticketmaster and Live Nation Pre-Merger
Ticketmaster was founded in 1976 as a ticketing service for concert venues. It initially only handled ticket sales for large concert promoters in select markets, but within a decade it expanded into a national ticketing powerhouse. In the 1990s and 2000s, Ticketmaster established exclusive deals with major concert venues and promoters, charginge high fees on ticket purchases that drew customer complaints but also delivered high profits.
Live Nation originated as a spin-off of radio giant Clear Channel Communications. The concert promotion division was spun off into an independent company called Live Nation in 2005. Live Nation promoted major tours and owned major venues/festivals like House of Blues and Lollapalooza. Live Nation aimed to consolidate the fragmented concert promotion industry and capitalize on growing live music demand.
By the 2000s, Ticketmaster and Live Nation sat atop their respective industry segments – ticketing services and concert promotion. As the live music sector grew into a multi-billion dollar industry in the 2000s, both companies looked to expand their businesses. Ticketmaster wanted to move into event promotion and artist management, while Live Nation wanted to expand into ticketing.
Details of the Merger Deal
In February 2009, Ticketmaster and Live Nation announced an all-stock deal to merge into a new entity named Live Nation Entertainment. The deal valued the combined company at $2.5 billion. Under the terms of the agreement:
- Live Nation shareholders would own approximately 50.01% of Live Nation Entertainment
- Ticketmaster shareholders would own 49.99% of the combined company
- The new company would be headquartered in Beverly Hills, California
- Live Nation CEO Michael Rapino would serve as CEO of the merged company
- Ticketmaster CEO Irving Azoff would serve as Executive Chairman of the new company
The deal aimed to create a vertically integrated powerhouse controlling ticketing, promotions, artist management, and venue operations. Supporters of the merger argued that the combined entity could improve efficiency and consumer experience by bundling ticketing with other live event services.
Regulatory and Legal Challenges
Given the dominance of Ticketmaster in ticketing and Live Nation in promotions, the merger immediately faced significant antitrust scrutiny. In 2009, the U.S. Justice Department launched an investigation and several Congressional hearings examined competition concerns. Critics of the deal included major artist managers like Irving Azoff and consumer watchdogs.
To ease antitrust worries, Ticketmaster and Live Nation agreed to several conditions as part of the merger approval. These included:
- Ticketmaster licensing its ticketing software to its competitor AEG for five years
- Restrictions on bundling ticketing/promotions deals
- Agreeing to abide by parts of a court order from Ticketmaster’s prior antitrust lawsuit
Even with the concessions, the merger still drew a lawsuit in 2010 from the Justice Department to block the deal on anti-competitive grounds. After months of legal wrangling, the two sides reached a modified settlement allowing the merger to proceed with additional conditions through 2020.
Launch of Live Nation Entertainment
The merger officially closed in January 2010, almost a year after the original announcement. The combined Live Nation Entertainment began trading on the New York Stock Exchange with an opening valuation of $1.2 billion. Michael Rapino led the new company as President and CEO.
The Justice Department settlement forcing Ticketmaster to license software to AEG was a blow to Live Nation Entertainment’s hopes of monopolizing ticketing. AEG quickly upgraded its systems and became a major competitor, preventing Live Nation from controlling the entire ticketing value chain.
Live Nation Entertainment continued to face accusations of monopolistic behavior, leading to multiple Justice Department reviews. But the company avoided any major legal challenges threatening the foundations of the merger. By 2020, Live Nation Entertainment’s valuation had grown to almost $15 billion with over 11,000 employees worldwide.
Evolution and Growth of Live Nation Entertainment Post-Merger
In the decade since the merger, Live Nation Entertainment has expanded significantly both through acquisitions and organic growth. Key developments include:
- Continued acquisitions of regional promoters and venues
- Expansion of Ticketmaster’s ticketing dominance with over 500 million tickets sold annually by 2020
- Launch of popular ticket resale site TicketExchange
- Ongoing investment in technology like contactless ticketing and digital tickets
- Expansion internationally with acquisitions in regions like Australia
- Growing a portfolio of over 200 festivals globally
- Adding over 130 million registered Live Nation Entertainment customers by 2020
The COVID-19 pandemic severely impacted Live Nation Entertainment’s live events business starting in 2020. But the company is positioned to rebound strongly once live events fully return. Thanks to its huge size and breadth of operations, Live Nation Entertainment remains a dominant force in live entertainment a decade after the Ticketmaster-Live Nation merger.
Year | Key Developments |
---|---|
1976 | Ticketmaster founded as a ticketing service for large concert venues |
2005 | Live Nation spins off from Clear Channel Communications as the world’s largest concert promoter |
2009 | Ticketmaster and Live Nation announce merger deal to form Live Nation Entertainment |
2010 | Merger approved after settling antitrust lawsuit with Justice Department |
2020 | 10 years after merger, Live Nation Entertainment valued at nearly $15 billion |
Impact on the Live Entertainment Industry
The Ticketmaster-Live Nation merger had major impacts on the structuring of the live entertainment industry:
- Created an enormous vertically integrated company controlling ticketing, promotions, venues, artist management, and more
- Sparked criticism and legal action over anti-competitive concerns
- Forced Live Nation Entertainment to license ticketing software to competitors like AEG to avoid monopolization
- Strengthened Live Nation’s dominance but also allowed competitors like AEG to gain market share
- Fueled ongoing debates about industry consolidation and artist compensation
While Live Nation Entertainment did not achieve the total market control some feared, its size and breadth of operations greatly exceeds any other company in live entertainment. The merger set the template for modern vertically integrated entertainment conglomerates.
Conclusion
The combination of Ticketmaster and Live Nation in 2010 created a live event colossus in Live Nation Entertainment. Though criticised for potential anti-competitive impacts, the merged company has continued growing over the past decade. It has strengthened its dominance through acquisitions and expansion while resisting major additional antitrust actions. The Ticketmaster-Live Nation merger fundamentally reshaped the modern live entertainment industry, even as it left room for competitors to take significant market share.