Here is a big deal in the music biz world
LOS ANGELES — The U.S. Justice Department cleared the way Monday for concert promoter Live Nation and ticket-seller Ticketmaster to combine after imposing major conditions meant to create stronger competitors and> lower ticket prices for consumers. Shares in both companies rose sharply in trading after reports surfaced that the merger would be approved. The rally continued following the afternoon announcement.
Assistant Attorney General Christine Varney said Ticketmaster would have to license its ticketing software to competitor Anschutz Entertainment Group Inc. and sell its subsidiary Paciolan to Comcast Corp. subsidiary Comcast-Spectacor. Paciolan sells tens of millions of tickets every year, she said. The conditions would result in two large, vertically integrated competitors – AEG and Comcast-Spectacor – that would vie for ticketing contracts with the merged entity of Live Nation Inc. and Ticketmaster Entertainment Inc. The merged entity would also be under a 10-year court order prohibiting it from retaliating against venues that choose to sign ticket-selling contracts with competitors. Consumer groups, ticket resellers and some politicians had expressed concerns that the combined company would control too much of the concert experience.
Varney announced the merger conditions on Monday, saying the deal as proposed would have been "anticompetitive." Both companies agreed to the conditions, but a U.S. District Court in Washington, D.C., would need to approve the settlement. Canadian regulators and 17 state attorneys general also signed onto the deal. "It's going to benefit competition and benefit consumers," Varney said. "Generally when you see robust competition, you would expect to see prices coming down." Live Nation Chief Executive Officer Michael Rapino, who will be the CEO of the merged company, said that "with this resolution the playing field is competitive and broader. "We believe that this merger will now create a more diversified company with a great selling platform for artists and a stronger financial profile that will drive improved shareholder value over the long term."
Ticketmaster CEO Irving Azoff called the resolution "a great win for fans."Live Nation, which is based in Los Angeles, andTicketmaster, which has headquarters nearby in West Hollywood, have said the merger will streamline their operations, ensuring their survival. They say music fans also can benefit through lower ticket prices because the merged company can earn money in new ways. Shares in Ticketmaster rose $2.56, or 19.3 percent, to $15.86 in afternoon trading, while shares in Live Nation went up $1.67, or 18.2 percent, to $10.83.