Live Nation, Ticketmaster working out deal
Talking with U.S. regulators to come up with concessionsNEW YORK -- Live Nation Inc and Ticketmaster Entertainment Inc are in negotiations with U.S. regulators to come up with concessions that would allow a merger between the two most powerful companies in the live music business, people familiar with the talks said.
The 8-month-long inquiry into the combination of Live Nation, the world's largest concert promoter, and Ticketmaster, the leading ticket seller, is expected to end in two to four weeks, said one person.
Officials at the U.S. Department of Justice have had "serious competitive concerns" that the combined company will have too much control over ticket prices. They are discussing concessions, which would include divesting some of the ticketing operations in the U.S.
There are also overall concerns about artist access to live venues and control of the live music business. Live Nation owns major venues like the Gibson Amphitheatre in Los Angeles and the House of Blues chain, and has long-term contracts with top artists like Madonna, U2, Jay-Z and Nickelback.
Ticketmaster, meanwhile, sells more than 140 million tickets a year and also owns Front Line Management, the leading artist management firm founded by Ticketmaster Chief Executive Officer Irving Azoff. Its roster of 200-plus artists includes The Eagles and Miley Cyrus.
But insiders have indicated the companies expect to have to make concessions, and one person said the talks with the DoJ have been "positive," indicating the discussions have proceeded as both companies had long privately predicted.
Plans already call for the sale of TicketsNow, a ticket reselling service that attracted controversy soon after the merger was announced. Fans who signed on to Ticketmaster's site to buy tickets to a Bruce Springsteen show were redirected to TicketsNow, which offered considerably more expensive tickets.
A combined company might have to make similar concessions internationally. Earlier this month U.K. competition regulators provisionally ruled against the combination and suggested a merged company might have to sell part of its business to operate there.
Although a relatively small combination in U.S. business terms, the deal has attracted criticism from artists, fans and politicians since it was announced. Some view it as a test case for the Obama administration's attitude toward mergers.
One of the people close to the talks said that the decision about whether to combine the companies would ultimately depend on whether the merger would still make sense after whatever concessions the Justice Department might demand.
Terms of the deal call for Live Nation to buy Ticketmaster in a share deal valued at around $625 million based on Friday's prices. Ticketmaster shareholders would receive 1.384 shares of Live Nation common stock for each share of Ticketmaster. Live Nation would own 49.99% of the combined company, while Ticketmaster would hold the remaining 50.01%.
Shares in Live Nation were off 6 cents at $7.90 while Ticketmaster gained 6 cents to $11.37.