Ticketmaster is the world’s largest ticketing company and has been the dominant force in the industry for decades. However, in 2010, Ticketmaster merged with Live Nation, which was the largest concert promoter and music venue operator at the time. This merger created a massive entertainment giant called Live Nation Entertainment which has faced scrutiny and allegations of monopolistic practices ever since.
The Live Nation – Ticketmaster Merger
Prior to merging, Live Nation and Ticketmaster were the two largest companies in the live entertainment industry. Live Nation promoted major tours for top artists and owned over 200 entertainment venues around the world. Ticketmaster sold tickets to concerts, sports games, theater shows, and more. It operated ticketing websites and services that served over 500 major venues globally.
In 2009, Live Nation’s ticker symbol was LYV and Ticketmaster’s was TKTM. They announced plans to merge into a new entity called Live Nation Entertainment. This was billed as a “merger of equals” although Ticketmaster shareholders only retained about 35% ownership of the combined company. Live Nation held majority control with around 65% ownership. The deal closed in January 2010 and the merged company trades under the ticker LYV.
The key executives from each company assumed leadership roles in the new Live Nation Entertainment structure. Michael Rapino, previously CEO of Live Nation, became CEO and President of the merged entity. Irving Azoff, formerly CEO of Ticketmaster, took on the role of Executive Chairman of the Board at Live Nation.
The merger brought together Ticketmaster’s dominant ticket selling platform and services with Live Nation’s vast network of concert venues and artist relationships. This created a vertically integrated entertainment empire that promoted events, owned venues, managed artists, and sold the tickets all on one platform.
Reasons for the Merger
Both Live Nation and Ticketmaster believed the merger would generate significant benefits and synergies between their businesses including:
- Combining Ticketmaster’s ticketing platform and Live Nation’s concert promotion under one roof
- Gaining more negotiating leverage over venues for show bookings and ticket deals
- Cross-selling tickets and promotions across their combined networks
- Generating deeper insights from all their data to improve operations
- Reducing costs by consolidating overlapping infrastructure
The merged company felt these synergies would drive growth and deliver more value to artists, venue partners, and fans. However, critics argued that the merger would simply eliminate competition and hand too much power over the live entertainment industry to one giant monopolistic player.
Monopoly Concerns and Regulatory Approval
Given the enormous scale of a combined Live Nation and Ticketmaster, the U.S. Department of Justice conducted an extensive year-long investigation into the competitive impact of the merger. There were concerns the deal would monopolize the industry by consolidating so much power under one roof.
Ultimately, regulators approved the merger in January 2010 but only after Live Nation agreed to certain antitrust provisions. For 10 years, Live Nation Entertainment was barred from retaliating against concert venues that used other ticketing companies instead of Ticketmaster. They also could not withhold shows from venues that didn’t agree to use Ticketmaster for ticketing.
Additionally, for 5 years Live Nation was prohibited from forcing artists to use Ticketmaster and required to allow the sale of tickets on competing platforms. Despite these concessions, critics still argued the merger handed Live Nation Entertainment way too much control over the live music ecosystem.
Post-Merger Monopoly Concerns
In the decade since the merger, Live Nation Entertainment has only grown more dominant across the live entertainment spectrum. The company now boasts:
- Ticket sales exceeding 500 million annually
- Over 40,000 concerts and festivals promoted each year
- Owning, operating, or exclusively booking over 300 major venues worldwide
- Managing over 500 artists including superstars like Taylor Swift, Jay-Z, and U2
Given their expansive reach, critics argue Live Nation Entertainment has too much centralized power. Artists and music venues have increasingly few options but to work with Live Nation due to their sheer size and reach. There are allegations of coercion, retaliation against competitors, preferential treatment, and exorbitant fees.
Expiration of Merger Conditions
When the merger conditions expired in 2020, many became concerned about Live Nation Entertainment exploiting their market power. Fears mounted that the company would require venues to use Ticketmaster or would punish them by withholding shows if they didn’t comply. Artists could also be strong-armed into exclusively using Live Nation’s ticketing platform.
Senate Judiciary Committee Investigation
In February 2022, the U.S. Senate Judiciary Committee opened an investigation into Live Nation Entertainment’s practices. Citing complaints and concerns over their dominant market power, Senators vowed to investigate:
- Allegations of threats, retaliation, and coercion against venues using other ticketing platforms
- Potentially forcing artists into using Ticketmaster or Live Nation services
- Concerns over high ticketing fees, hidden costs, and other anti-consumer practices
As part of the probe, Senators demanded extensive company records, data, and communications from Live Nation Entertainment executives. The Judiciary Committee is currently reviewing this information as it builds its case around the company’s monopoly power and antitcompetitive conduct in the live event industry.
DOJ Review
Alongside the Senate Judiciary investigation, the Department of Justice also launched a review in 2022 into Live Nation Entertainment’s dominant market share. The DOJ is similarly gathering evidence around coercive behavior, threats to venues, and other potential antitrust violations.
The DOJ review will examine whether Live Nation Entertainment’s practices have harmed market competition and if any additional antitrust enforcement is warranted. Unlike the Senate probe, the DOJ has authority to bring an enforcement action against the company if it uncovers illegal monopoly activity.
Potential Outcomes
The Senate Judiciary Committee does not have direct authority to break up or regulate Live Nation Entertainment. However, its findings could put political pressure on regulators like the DOJ to take action. Potential outcomes include:
- Breaking up the merged entity – Forcing Live Nation and Ticketmaster back into separate companies could restore more competition.
- Blocking future acquisitions – Preventing further expansion would limit Live Nation’s ability to amass more market power.
- Adding new merger conditions – Stricter behavioral remedies could curb coercive and unfair tactics.
- Divesting assets – Selling off certain venues, promoters, or ticketing services would reduce market control.
However, Live Nation Entertainment argues it offers consumers great value and has enhanced innovation, choice, and investment across live entertainment. The company claims its scale allows it to keep ticket prices affordable while offering an unmatched selection of events.
Live Nation also notes that it competes in a dynamic marketplace up against large tech players like Amazon and Apple which are also vying for live content. Ultimately, they contend any break up or limitations would hurt artists, venues, and fans.
Conclusion
In summary, Ticketmaster merged with Live Nation in 2010 to create the live entertainment giant Live Nation Entertainment. However, this concentration of power has continually raised monopoly concerns from regulators, policymakers, and industry players.
Now over a decade later, with Live Nation Entertainment dominating most facets of live events, both the Senate Judiciary Committee and DOJ are investigating allegations of unfair monopolistic practices. Their findings could potentially spur regulators to break up or rein in the company on antitrust grounds.
However, Live Nation claims the merger has benefited consumers and the industry overall. The ongoing probes and potential for antitrust enforcement signify increased scrutiny around the longstanding monopoly concerns stemming from Ticketmaster’s mega merger with Live Nation.
References
Here are some references used in researching this article:
Source | Key Points on Live Nation-Ticketmaster Merger |
---|---|
U.S. Senate Judiciary Committee | Announced antitrust probe into Live Nation Entertainment in February 2022 citing competition concerns. |
U.S. Department of Justice | Launched review of Live Nation practices and market power to determine if antitrust enforcement warranted. |
New York Times | Detailed original 2009 merger and subsequent monopoly concerns after conditions expired in 2020. |
Wall Street Journal | Reported on DOJ and Senate investigations and potential outcomes including break up or asset sell off. |
RIAA | Music industry group argued merger would give Live Nation-Ticketmaster too much control and hurt competition. |
Live Nation Entertainment | Defended merger benefits to artists, venues, and fans. Claimed increased competition from tech companies. |