In 2009, the merger between Ticketmaster and Live Nation was approved by the Department of Justice, despite objections from many that it would create a monopoly in the live event and ticketing industry. This was a highly controversial decision that changed the landscape of the industry and impacted consumers, venues, promoters, and artists.
Background on Ticketmaster and Live Nation
Ticketmaster was founded in 1976 as a ticketing service that provided ticket sales and distribution services to venues and promoters. It quickly grew to become the largest ticketing company in the U.S. Live Nation was formed in 2005 after Clear Channel spun off its live events division. Live Nation promoted events, owned venues, and partnered with artists for live performances and tours. By 2009, Ticketmaster had sold over 141 million tickets and Live Nation owned over 130 venues.
In February 2009, Ticketmaster and Live Nation announced plans to merge into a new entity called Live Nation Entertainment. This proposed merger valued the combined company at approximately $2.5 billion. The companies claimed the merger would allow them to bundle services for venues, promoters, artists, and fans to grow the live event industry.
However, the proposed merger immediately raised anti-trust concerns. Critics claimed that Ticketmaster already controlled over 80% of major venue ticket sales. Combining it with the world’s largest concert promoter and venue owner would create a monopoly and eliminate competition in live entertainment. There were calls from consumers, competitors, politicians, and artists to block the merger.
Department of Justice Review
Because of the anti-trust issues, the proposed merger prompted a lengthy review by the Antitrust Division of the Department of Justice (DOJ). The DOJ spent over a year assessing the merger’s competitive impact and potential harm to consumers.
In May 2009, Ticketmaster and Live Nation offered to license a copy of Ticketmaster’s software to Anschutz Entertainment Group (AEG) to let AEG sell tickets to its own venues in competition with Ticketmaster. They claimed this would address anti-trust concerns by preserving a competitor in ticketing.
That summer, more than a thousand artists, including Bruce Springsteen, Neil Young, and Sheryl Crow, signed a petition opposing the merger based on concerns about high fees and limited choices for fans. Several members of Congress also voiced opposition and urged the DOJ to block the merger.
Final DOJ Decision
In January 2010, after extensive review, the DOJ and Texas Attorney General ultimately approved the merger with several conditions to preserve competition:
- Ticketmaster must license its ticketing software to AEG for five years so AEG venues can compete in primary ticket sales
- Ticketmaster cannot threaten or retaliate against venues that use other ticketing companies
- Ticketmaster and Live Nation cannot threaten artists who partner with other promoters or venues
- Firewalls must prevent the sharing of competitively sensitive ticketing information between Ticketmaster and Live Nation’s promotion businesses
The DOJ said these remedies eliminated the merger’s anti-competitive effects. Assistant Attorney General Christine Varney stated: “The merger, as originally proposed, would have substantially lessened competition in the market for primary ticketing services.” But she said the conditions allowed other promoters and venues to compete with the merged company.
Remaining Opposition
Many consumer advocates, competitors, politicians, and artists still opposed the merger following the DOJ’s conditional approval:
- Consumers and fans complained the merger would lead to higher ticket prices and fees.
- Independent promoters feared being shut out of top venues and tours.
- AEG said the licensing deal was inadequate in allowing real competition.
- Several states launched separate anti-trust investigations into the merger.
- Bruce Springsteen called it “the single greatest threat to the thriving live music market.”
However, the DOJ believed the remedies addressed anti-trust issues sufficiently. Therefore, the Ticketmaster-Live Nation merger officially closed in January 2010 after receiving DOJ approval, despite the ongoing opposition.
Impact of the Merger
In the years since the merger, Live Nation Entertainment has become a live event juggernaut. However, many concerns raised by critics before the merger have proved true:
- Ticket prices and fees have continued to rise faster than inflation.
- Live Nation sells the majority of primary tickets and dominates tour promotion.
- Independent venues and promoters struggle to compete with Live Nation’s scale and vertical integration.
- Fans and artists have limited ticketing options at major venues.
The DOJ allowed the merger to proceed with remedies intended to preserve competition. But the combined company still wields enormous power in live entertainment. Its dominance impacts consumers and squeezes smaller players in the industry.
Key Players in Approving the Merger
Here are some of the key players who shaped approval of the Ticketmaster-Live Nation merger:
Player | Role |
---|---|
Christine Varney | Assistant Attorney General at DOJ Antitrust Division; led DOJ merger review |
Greg Abbott | Texas Attorney General; worked with DOJ on merger conditions |
Michael Rapino | Live Nation CEO; architect of the merger with Ticketmaster |
Irving Azoff | Ticketmaster CEO; pushed for deal with Live Nation |
Tim Leiweke | CEO of AEG; received merge concessions for AEG from DOJ |
Ultimately, the controversial merger succeeded because the DOJ and Texas AG believed the conditions established would adequately protect competition. Consumer advocates argue those protections have proven insufficient over time.
Conclusion
The Ticketmaster-Live Nation merger brought together the two largest players in live entertainment ticketing and promotion. Despite significant opposition on anti-trust grounds, the Department of Justice approved the deal in 2010 with several conditions intended to preserve competition. However, many critics believe the merged company has become too dominant in the industry, leading to higher prices and fees and limited choices for consumers and artists. The merger’s approval fundamentally shaped today’s live event landscape by allowing the creation of a near-monopoly in Live Nation Entertainment.