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Possible Ticketmaster-Live Nation merger draws boos from concert fans

MUSIC

Some, including Bruce Springsteen, fear the control the combined entity would have in the industry.

February 05, 2009|David Colker, Tiffany Hsu and Randy Lewis

The two biggest companies in live concerts might be getting together, and the Boss -- and concert fans -- are not happy.

Ticketmaster Entertainment Inc., which controls ticketing at major venues across the country, and artist manager Live Nation Worldwide Inc. are in talks to merge, according to a person close to the negotiations.

But superstar Bruce Springsteen, who has objected to Ticketmaster policies in the past, quickly cried foul, saying it would give too much power to one combined company.

"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," said a statement on the singer's website that was also signed by manager Jon Landau.

Neither Ticketmaster, based in West Hollywood, nor Live Nation in Beverly Hills would comment on the talks, first reported in the Wall Street Journal.

Fans, already upset over fees that can tack 30% or more onto the price of a concert ticket, were wary of the deal too.

Leah Baker, a tax analyst in Atlanta who goes to as many as five concerts a month, worried that a combined company would be so powerful that it would push out other promoters and ticket sellers, leaving concertgoers with fewer options.

"If they merge, and they develop a market where music managers are only willing to go to them for shows and events, then what happens to the little guy who doesn't tack on all the fees?" Baker said. "It almost seems unethical to merge."

Ticket fees can add up. A concertgoer who buys a ticket in person at the Honda Center box office in Anaheim for an upper-level seat to next month's Elton John/Billy Joel concert will pay the face value of $54.50.

But if the same purchase is made via Ticketmaster online or by phone, there will be an added $12.05 service charge per ticket plus a $4.05 processing fee per order, bringing the total to $70.60.

It doesn't stop there. A customer who picks up the ticket at a Ticketmaster retail location is required to pay an extra $1, and there is a $2.50 charge for printing out the ticket -- at home.

But a merger, even if the companies come to terms, is still a long way from going through.

Legal experts said there were major hurdles to overcome, especially in regard to antitrust issues.

"When you have a company like Live Nation that controls so much of the concert promotion market, and they're going to merge with a company like Ticketmaster, it does make it harder for smaller companies to compete," said attorney Timothy Mathews of Chimicles & Tikellis, a law firm that takes on music antitrust cases.

Shareholders seemed to like the notion that the two companies could make beautiful music together. Shares of Ticketmaster rose 82 cents, or 13%, to $6.96, while Live Nation rose 23 cents, or 5%, to $5.22.

Both stocks, in line with overall market trends, are down drastically from their 52-week highs.

Just a couple of months ago, such a merger might have had a better chance, said Jennifer Fountain Connolly, an attorney at Chicago-based Wexler Wallace.

"Given what's been heard from the new Obama administration, there's anticipated heightened scrutiny for mergers that wasn't in place with the Bush terms," Connolly said. "You're looking at a massive combination of economic power, where literally every aspect of the promotion of concerts will be controlled by one company."

Word of the talks comes only about a month after Live Nation dropped Ticketmaster as its ticketing vendor and went into that business -- selling tickets to its own events.

One of Live Nation's first efforts in the field, the ticketing of a national comeback tour by the band Phish, did not go smoothly.

There were technical problems, resulting in an apology on Phish's website for "extremely long wait times, error messages and quite simply, an inability to get through and purchase tickets."

If there's no merger and Live Nation succeeds in its ticketing venture, the company could put a significant dent in Ticketmaster's business.

Concert tours are an increasingly important revenue source for artists as traditional CD sales continue to decline. Moreover, Live Nation has recently expanded its scope from being a concert promoter to also managing profit centers such as merchandising, licensing and fan clubs.

Some industry analysts said that Live Nation could potentially hold down ticketing costs by cutting out the middleman.

"Because Live Nation owns its own ticket platform, they would not be sharing fees with Ticketmaster," said Scott Devitt, an analyst at Stifel, Nicolaus & Co. "This had the potential to lower consumer fees."

But a merged company could probably call the shots.

"With this possible merger, it takes away the only competition from a ticketing standpoint," Devitt said.

A merger would also scrap perhaps the best chance that Sarah Heffern, 37, who saw the Who, the Police and Pearl Jam in concert last year, has of getting rid of her most hated ticket charge.

"The fee that really drives me insane," she said, "is the one where I get charged to print out my own ticket. My paper, my ink, and there is still a fee?"

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david.colker@latimes.com

tiffany.hsu@latimes.com

randy.lewis@latimes.com

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