US Approves Live Nation Ticketmaster Merger

The US Government has given the go-ahead to the merger between concert promoter Live Nation Inc. and ticket-selling and artist-management powerhouse Ticketmaster Entertainment Inc.

The deal, which had been under review by US Department of Justice antitrust regulators for nearly a year, had been closely watched by business as a barometer of how tough the Obama administration planned will be on proposed mergers. The antitrust division's new head, Christine Varney, had warned that businesses should expect much harsher antitrust scrutiny of mergers than was the case under the previous administration.

The conditions the Department imposed, while substantial, were not enough to derail the deal and the companies, having accepted the conditions, sealed the deal on Monday afternoon.

The merger creates an entertainment industry juggernaut, combining a company able to manage artists, book them at venues that it owns and sell tickets to their concerts. The new company, called Live Nation Entertainment Inc., also will be able to sell merchandise and in some cases control the sale of recorded music.

The Justice Department said that the conditions would "preserve competition" in the US ticketing business.

The merger doesn't significantly expand the market share of either company. Instead, it creates one company that will have a hand in just about every corner of the music business. Such "vertical integration" stands to be a major topic for the Justice Department. The proposed acquisition of General

Electric Co.'s NBC Universal by Comcast Corp. poses similar issues, because NBC creates television content that is distributed by Comcast's cable systems.

The conditions effectively establish AEG Live, the US's second-biggest concert promoter behind Live Nation, as a competitor in ticketing. The merged company will be required to license its ticketing software to AEG.

AEG President and Chief Executive Timothy Leiweke predicted that the agreement would "further the interests of consumers and other participants in the live entertainment industry."

"We were prepared to litigate this case," Varney told reporters at a news conference on Monday. But following the conditions imposed on the deal, there should now be three major ticketing players competing in the market, she said, and as a result, "we expect that we will see [ticket prices] coming down."

Some in the industry warned that the consumer isn't necessarily affected by the number of players in the market, because ticketing companies' clients are venues, not concert-goers.

Others remained skeptical. "The Department of Justice is asking consumers to take a pretty big leap of faith that this remedy will work," said David Balto, a former Federal Trade Commission official now a fellow at the Center for American Progress.

The United Kingdom's Competition Commission has already approved the merger without conditions.