Ticketmaster and Live Nation Await Merger Approval
Wednesday, February 11, 2009; 1:34 PM
Ticketmaster and Live Nation -- the biggest ticket seller and the largest live-event promoter -- announced a $2.5 billion merger yesterday, creating a vertically integrated entertainment behemoth that has competitors nervous and federal regulators watching.
What's in it for ticket buyers is far from clear. The era of the dreaded "convenience charge" might be ending -- but there's no guarantee of lower ticket prices.
The deal must still be approved by shareholders and pass regulatory scrutiny. The Justice Department confirmed today that it will "conduct a thorough investigation" of the proposed merger to ensure "vigorous enforcement" of antitrust laws, a spokeswoman said. Some members of Congress are already urging rejection of the deal.
Shareholders of Ticketmaster and Live Nation, both publicly traded companies based in Los Angeles, would each own about half of the new entity, called Live Nation Entertainment, which, if the deal is approved, would be born later this year.
"Too many tickets go unsold and too many fans are frustrated with their ticket-buying experiences," said Michael Rapino, chief executive of Live Nation. "The current inefficiencies in the system result in higher costs and confusion over access to seats."
Rapino, Ticketmaster chairman Barry Diller and Ticketmaster chief executive Irving Azoff portrayed the deal in a conference call with industry analysts as a way to simplify the process for fans while simultaneously selling more seats and making more money.
The goal: "Putting the right fan in the right seat at the right time," said Rapino.
And: "We will create greater connections between artists, performers, athletes and fans," and "improve the experience for all," said Diller.
But the executives were short on specific examples of how they will accomplish this. They did acknowledge their business has an image problem.
"Ticketmaster is never perceived to be on the side of the angels," Diller said.
Some analysts say that's why the name "Ticketmaster" will not live on in the combined company.
The executives touted one specific innovation launched on the Eagles' recent tour. Extra charges and fees were rolled into the face value of the ticket. Fans didn't necessarily pay less, but at least they escaped the annoyance of incremental unexpected price hikes.