Live Nation/Ticketmaster Merger's Rough Senate Reception

02/25/09 3:30pm

The proposed Live Nation / Ticketmaster merger isn't guaranteed, as skeptical U.S. politicians grilled the company's top executives at the Senate Judiciary Committee's Subcommittee On Antitrust, Competition Policy And Consumer Rights hearings in Washington on Tuesday.

Senator Charles Schumer is against the merger and says it represents "monopolistic behaviour, plain and simple." He asked Ticketmaster CEO Irving Azoff to sell ticket resale website TicketsNow, which it acquired for $265 million U.S. (about $333 million Canadian) last year. The purchase and how Ticketmaster and TicketsNow operate have drawn a class-action lawsuit in Canada and criticism from Bruce Springsteen in the U.S.

Azoff didn't offer a firm opinion on the potential sale of TicketsNow, but said he wouldn't have purchased it if he was heading Ticketmaster when the deal went down in January 2008. He also went on the offensive against ticket scalping.

"Personally, I don't believe there should be a secondary market at all," he said. "Scalping should be illegal."

It was revealed during the hearings that, if the merger went ahead, Live Nation would gain access to proprietary information from competitors that use Ticketmaster and earn income from them. That can't be seen as a good thing if you work for another concert promotion company, but Live Nation CEO Mike Rapino promised the ticketing and promotion divisions would be separate and wouldn't share information.

Azoff apparently doesn't see a cause for concern either.

"The fierce competition we face in our businesses will continue to thrive," he said.

Azoff claims the combined entity would offer fans additional seating choices and price flexibility in addition to saving money for what would be named Live Nation Entertainment and helping save the struggling music industry.

Senator and subcommittee chairman Herb Kohl disagreed and said the merger will place "a stranglehold on all segments of the concert business."

Rapino tried to shoot down accusations that Live Nation Entertainment would have a monopoly by describing it as a "decentralized business run by local entrepreneurs."

Kohl said the subcommittee will continue to monitor the merger and will urge the U.S. Justice Department to examine it closely.

Ticketmaster has also come under fire for selling Leonard Cohen tickets in advance of their sale date through TicketsNow.

TicketsNow began selling tickets to Cohen's upcoming Canadian tour earlier this week, even though they didn't go on sale through Ticketmaster until today (Wednesday), according to CBC.ca. Tickets that would normally cost $99 to $250 were reportedly being sold on TicketsNow for $568 to $856, plus service charges of more than $85. The tickets have since been pulled from TicketsNow.