Live Nation and Ticketmaster combine to become entertainment juggernaut


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The Department of Justice’s Monday ruling on the legality of the Live Nation–Ticketmaster merger will change the face of American concert-going in much the same way that a vat of acid changed the face of Harvey Dent (you probably know him as Two Face, Batman’s most ungodly-visaged nemesis).

Live Nation — the ubiquitous concert promoter behind most of the high-profile shows being put on any given night — has been given the go-ahead from the Department of Justice to combine operations with Ticketmaster, the country’s preeminent ticket vendor. With this new arrangement, the freshly joined giants will have consolidated nearly all aspects of the live entertainment industry: everything from booking to publicity to ticket sales will now pass through the hands of newly formed Live Nation Entertainment.

One important aspect of the merger is the venue ownership that accompanies the deal. Many popular performance spots had exclusive deals with Live Nation — locally, the Wiltern, Hollywood Palladium, Avalon, Gibson Amphitheatre and Sunset Strip House of Blues all had exclusive contracts as Live Nation venues. When the merger is complete, any performer or group wishing to play one of the venues will have no way around working with the new Live Nation Entertainment giant.

In response to reasonable concerns that the merger will edge out competition and result in an unfair monopoly of the live entertainment industry, the Department of Justice is requiring that Ticketmaster make its ticket selling technology available to AEG, the management company which owns the Staples Center. AEG, which is in basically the same business as Live Nation was previously (i.e., promotions and management), will now have access to technologies that will allegedly enable it to compete with the newly formed Live Nation Entertainment conglomerate.

It strikes me as absurd that the Department of Justice qualified its approval of the juncture on the condition that Live Nation Entertainment divulge its ticket-selling technologies to AEG, thereby “creating its own competition.” Beyond being completely symbolic, the qualification imposed by the Department of Justice reflects a ridiculous level of intervention on the part of the federal government. Staking the legality of business moves on the compliance of the involved companies with arbitrary requirements more nearly resembles shoddy parenting than sound interpretation of the law.

Similar brouhaha surrounded the XM and Sirius satellite radio juncture a few years back. Then as now, the concern stemmed from speculation that combining the two broadcasting behemoths would create an unfair monopoly in the satellite radio market. The merger — which eventually resulted in SIRIUS XM Radio — was announced in Feb. 2007 and only approved in Mar. 2008, bringing the entire judicial approval process to more than one year.

Both of these cases resulted in market-dominating forces that are practically without match. The implications of this merger for live entertainment both in Los Angeles and across the country are open to debate, but what is not is the result of the Department of Justice’s decisions. Swap out those houses for a hotel: what we’ve got here is clearly a monopoly.