Department of Justice Clears Way for Live Nation and Ticketmaster Merger

News   Department of Justice Clears Way for Live Nation and Ticketmaster Merger
 
Concert producer Live Nation, Inc. and Ticketmaster Entertainment, Inc. announced on Jan. 25 that they have reached agreements with the U.S. Department of Justice (DOJ) and with the Canadian Commissioner of Competition, leading toward a merger of the companies.

Upon closing, the company will be renamed Live Nation Entertainment, Inc. "to reflect the combination of Live Nation's concert promotions expertise with Ticketmaster's world-class ticketing solutions and artist relationships."

The companies' plan to merge was announced in February 2009. The courts sought to protect competitive conditions in the marketplace.

"The merger, as originally proposed, would have substantially lessened competition for primary ticketing in the United States, resulting in higher prices and less innovation for consumers," according to the DOJ. (Read the DOJ announcement here.)

Ticketmaster is the ticket service of many Broadway national touring houses, as well as Nederlander theatres on Broadway. Pop-concert ticket buyers and arena events are the meat and potatoes of Live Nation and Ticketmaster.

The Department of Justice's Antitrust Division, along with 17 state attorneys general, filed a civil antitrust lawsuit Jan. 25 in the U.S. District Court in Washington, DC, to block the proposed transaction. At the same time, the department and the states' Attorneys General also filed a proposed settlement that, if approved by the court, would resolve the competitive concerns in the lawsuit. The DOJ cooperated with the Canadian Competition Bureau throughout its investigation, "and the two agencies worked together to obtain the same remedy that preserves competition in both the United States and Canada."

According to the DOJ statement, "Under the proposed settlement, Ticketmaster must license ticket software and divest ticketing assets to two different companies — Anschutz Entertainment Group (AEG) and either Comcast-Spectacor or another buyer suitable to the department, respectively — allowing both companies to compete head-to-head with Ticketmaster. Ticketmaster will also subject itself to court-ordered restrictions on its behavior."

Michael Rapino, CEO of Live Nation, said in a statement, "This is a good and exciting day for the music business, and we are close to finalizing the creation of a new company that will seek to transform the way artists distribute their content and fans can access that content. The Department of Justice was thorough and aggressive in their analysis and their remedies, and we are confident that with this resolution the playing field is competitive and broader as a result of this transaction. We believe that this merger will now create a more diversified company with a great selling platform for artists and a stronger financial profile that will drive improved shareholder value over the long term."

Irving Azoff, CEO of Ticketmaster, stated, "We appreciate the Department of Justice's effort. Their resolution is a great win for fans. The entertainment industry needs innovation and we are ready to deliver. I'm truly excited that as this new company goes forward, we will be able to create more choices for family entertainment, sports, artists, teams and other rights holders."

Live Nation Entertainment's "mission will be to improve the live entertainment experience and to drive major innovations in ticketing technology, marketing and service."

The combined company will be led by Michael Rapino as CEO and president of Live Nation Entertainment and Irving Azoff as executive chairman of Live Nation Entertainment and CEO of Front Line. Barry Diller will serve as chairman of the board of Live Nation Entertainment.

Live Nation's core business is producing, marketing and selling live concerts for artists around the world. Live Nation is the largest producer of live concerts in the world, annually producing over 22,000 concerts for 1,500 artists in 57 countries. During 2008, the company sold over 50 million concert tickets and drove over 70 million unique visitors to LiveNation.com.

Ticketmaster Entertainment consists of Ticketmaster and Front Line Management Group. It bills itself as "the world's leading live entertainment ticketing and marketing company based on the number of tickets sold." Ticketmaster operates in 20 global markets, providing ticket sales, ticket resale services, marketing and distribution through www.ticketmaster.com, one of the largest e-commerce sites on the Internet; approximately 7,100 retail outlets; and 17 worldwide call centers.

Established in 1976, Ticketmaster serves more than 10,000 clients worldwide across multiple event categories, providing exclusive ticketing services for leading arenas, stadiums, professional sports franchises and leagues, college sports teams, performing arts venues, museums and theatres.

In 2008, the Company sold more than 141 million tickets valued at over $8.9 billion on behalf of its clients.

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