They didn't listen to the Boss
Today, the Department of Justice announced that it will approve a merger between Ticketmaster and Live Nation, as long as certain conditions are met. The DOJ said its decision will not only preserve competition, but that ticket prices will come down because of it!
As laid out in a briefing in Washington, the conditions appeared relatively straightforward and shouldn't pose major obstacles, thereby clearing the way for the creation of single entity that will be able to manage artists, book them in venues which it owns and sell tickets to their concerts. It will also be able to sell merchandise, run fan clubs, and in some cases sell recorded music...
Under the conditions set forth by the Justice Department, the merged company would need to sell off a unit that sells tickets to college sporting events, and would need to license its ticketing software to rival concert promoter AEG Live, so that company can launch a competing service.
As you may know, Christine Varney, the head of the Justice Department's antitrust division, has warned big business it can expect more scrutiny of mergers. Scrutiny is one thing. Blocking a potentially anticompetitive merger is another. Here's the reaction from New Jersey Democrat Bill Pascrell:
"The American people need to be told how DOJ decided that this deal, even with the concessions made, passes muster with our nation's antitrust laws," he said in the statement. "Moving forward, as these two companies with a history of anti-consumer behavior are poised to join together into an entertainment behemoth, I will be keeping a close eye on how the Department of Justice and Federal Trade Commission enforce any conditions they impose on this new entity to ensure consumers are protected."
New Jersey's favorite musical son, Bruce Springsteen, wrote this a year ago:
"The one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing. Several newspapers are reporting on this story right now. If you, like us, oppose that idea, you should make it known to your representatives."
Varney's comment today: "We expect that we will see (ticket prices) coming down" as a result of the conditions announced.
You believe that? I'm not sure the stock market does. Shares in both Live Nation and Ticketmaster shot up 16% in afternoon trading.