Ticketmaster, Live Nation announce merger
Companies seeking lawmaker, celebrity approvalTicketmaster and Live Nation on Tuesday made official their intent to merge, after which executives at both companies began making their case that the creation of a giant firm consisting of concert promotion, venues and ticketing would be a good thing for a struggling industry and music fans.
The merged company would be called Live Nation Entertainment and be run by CEO Michael Rapino, currently CEO of Live Nation; executive chairman Irving Azoff, the CEO of Ticketmaster; and chairman Barry Diller, currently Ticketmaster's chairman.
But the trio first needs to convince skeptical lawmakers and even a celebrity or two that combining the industry players won't result in a monopoly tempted to abuse.
Diller seemed to take the lead Tuesday, reminding reporters and analysts on a conference call that "Ticketmaster does not set prices; Live Nation does not set ticket prices. Artists set prices."
Tell it to the Boss.
Bruce Springsteen railed against a merger at his Web site, and New Jersey investigators are looking into why Ticketmaster was steering customers seeking Springsteen concert tickets to its more expensive TicketsNow subsidiary.
More significantly, Sen. Charles Schumer, D-N.Y., also needs to be convinced of the merits of the deal. He called the Springsteen incident "a classic bait-and-switch," while Diller characterizerd it as a "technical glitch."
Springboarding off of the Springsteen issue, Schumer and other lawmakers spoke against a Live Nation-Ticketmaster merger even before Tuesday's announcement of a deal.
Rep. Bill Pascrell Jr., D-N.J., for example, complained in a letter to the Federal Trade Commission last week that a merger would result in "an incredible potential for abuse."
The deal has Live Nation buying Ticketmaster for about $400 million in stock, with shareholders of each company owning about 50% of the combined entity. Shares of Live Nation lost 9% Tuesday, and Ticketmaster shed 6%.
Diller, Azoff and Rapino also were making the case that a merger is necessary to better navigate a nasty U.S. recession.
"The goal of this company is going to be to get more artists to work and fill more venues and fill more seats," Azoff said.
Live Nation owns about 140 venues, including the Wiltern, Gibson Amphiteatre and House of Blues in Los Angeles, and produces 22,000 concerts annually. Ticketmaster runs 6,700 retail outlets and sold 141 million tickets in 2007 valued at more than $8.3 billion. Ticketmaster also owns a controlling interest in Front Line Management Group, whose clients include Eagles, Neil Diamond, Steely Dan, Jimmy Buffett and Van Halen.