Ticketmaster/Live Nation Merger.

The emergence of two mammoth entities that in and of themselves raise questions of monopolistic business practices in the music industry is obviously not good news for the grassroots entrepreneur trying to get a piece of the pie, or for the consumer simply trying to score decent seats to see his or her favorite band.

So when Live Nation, who owns and operates over 140 venues worldwide, announced a planned merger with Ticketmaster, the ticketing agency responsible for over 80% of all arenas and stadiums in the US, outrage was heard screaming from the rehearsal spaces on the West side all the way to Capitol Hill.

Such a merger would create a singular, almost impenetrable Goliath looming over the concert industry. In addition to the aforementioned ventures of both corporations, they also have management companies (including such clients as U2, Jay-Z, Madonna, and Shakira), and even "secondary ticket outlets" such as Ticketsnow.com, which is actually integrated into Ticketmaster's own website. Tickets for that Springsteen show sold out in 3 minutes? Well don't worry, folks! Just click over here, and you can get them from the same company for 3, 5, maybe even 10 times the face value of the ticket!

This does not bode well for the consumer, and it also places competitors, such as Chicago's own Jam Productions in a precarious position. Jam owns and operates venues such as the Riviera and Vic Theatres in Chicago. They also use Ticketmaster as their primary ticketing outlet. With a Live Nation-Ticketmaster merger, it is easily foreseeable that a competitor like Jam Productions may be pushed to the fringes, leading artists to take their business to the one-stop "Live Master."

Thankfully, some of our legislative representatives in Congress feel the same way we do. According to the Wall Street Journal:

"Members of Congress made it clear on Wednesday that the company is going to stay in the spotlight for a while. Sen. Charles Schumer and Rep. Bill Pascrell, Democrats from New York and New Jersey, respectively, wrote Attorney General Eric Holder on Wednesday to urge the Justice Department to block the merger on antitrust grounds. Schumer said consumers could end up paying higher prices because one company would “have control over every step of the process between fans and artists."

The DOJ was quick to respond, opened an investigation of the proposed merger on Wednesday, in what many think will be the first test of the Obama administration’s antitrust policy. Obama has tapped Hogan & Hartson partner and former FTC commissioner Christine Varney to lead the DOJ’s antitrust division.

While in a strained economy, anti-trust legislation is often easily sidestepped, or in the case of FDR's National Industrial Recovery Act of 1933, even temporarily suspended.

Luckily, our new President has strong sentiments regarding anti-trust legislation. In a statement made to the American Antitrust Institute, then Sen. Obama stated:

As president, I will direct my administration to reinvigorate antitrust enforcement. It will step up review of merger activity and take effective action to stop or restructure those mergers that are likely to harm consumer welfare, while quickly clearing those that do not..

In short, I will direct my administration to take seriously our responsibility to enforce the antitrust laws so that all Americans benefit from a growing and healthy competitive free-market economy.

Here's hoping the Obama administration sticks to that tack, and follows more of a Teddy (rather than Franklin D.) Roosevelt approach toward this and other potentially monopolistic mergers.

Dan Moulder
Creative Director, Music Licensing
CTD, Ltd.

Additional Sources Used:
Huffington Post
Forbes