Ticketmaster CEO Tells House That Merger With Live Nation Won't Kill Competition

Live Nation CEO Michael Rapino, left, testified on Capitol Hill along with Ticketmaster CEO Irving Azoff.
Live Nation CEO Michael Rapino, left, testified on Capitol Hill along with Ticketmaster CEO Irving Azoff. (By Kevin Wolf -- Associated Press)
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Associated Press
Friday, February 27, 2009

Ticketmaster's chief executive sought yesterday to allay antitrust fears over the ticket seller's planned merger with concert promoter Live Nation by revealing that a major venue operator has threatened to cancel its contract if the merger goes through.

The revelation, made before a House subcommittee examining the proposed merger for antitrust concerns, was meant to suggest the combination might somewhat weaken Ticketmaster Entertainment's grip on ticket contracts with a majority of top U.S. venues.

Ticketmaster CEO Irving Azoff said his company received a warning from AEG Live, the owner of 130 venues including Staples Center in Los Angeles, that it may cancel its contract with Ticketmaster if it merges with Live Nation in an all-stock deal that would value the combined entity around $2.2 billion.

"Others will most certainly leave if this merger is consummated," Azoff testified before the House subcommittee on courts and competition policy. "AEG has notified us by letter that they believe they have the right to terminate our agreement in connection with this merger."

"If that's not competition, I don't know what is," he said.

AEG Live CEO Randy Phillips did not immediately return a message for comment.

Ticketmaster has deals with the NFL, NBA and NHL and the Premier League of U.K. football, and sells tickets for more than 80 percent of the major arenas and stadiums in the United States, according to the concert tracking firm Pollstar.

Live Nation, the world's No. 1 concert promoter, and Ticketmaster say that together they could better withstand the recession, sell more tickets and improve service to fans by bringing together their expertise in promotions and ticketing. The companies expect that the planned merger announced earlier this month will close in the second half of 2009.

But policymakers and fans fear that such a merger could monopolize the business of selling concert tickets. Many lawmakers and antitrust experts have noted that Live Nation's launch of its own ticketing system in January had threatened to siphon off around 15 percent of Ticketmaster's revenue and put the two in direct competition for the first time.

A merger would squelch that battle for new ticketing contracts.

Lawmakers are also concerned that a combined entity could wield undue influence over artists, fans and venues because of its ability to control every aspect of a live show, including ticket sales, artist management, concession sales, venue operations and promotions.

At a similar hearing before a Senate subcommittee Tuesday, independent concert promoters raised concerns that Live Nation would be able to obtain proprietary sales and consumer data after the merger because the promoters use Ticketmaster to sell tickets. At that hearing, Live Nation CEO Michael Rapino vowed to support a data firewall preventing such sharing of information.

Azoff also said Tuesday that he would not have bought TicketsNow, the resale site at the core of an uproar over Bruce Springsteen concert tickets, if he were in charge when Ticketmaster acquired it in February 2008. Several politicians and fans accused Ticketmaster this month of redirecting consumers to the TicketsNow site, where resale tickets were available with huge premiums, despite regular-price tickets still being available.

Azoff went further yesterday, saying he would recommend that his board sell TicketsNow if an appropriate offer were made.

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