A deal to allow a merger between the two most powerful companies in the concert business, Live Nation and Ticketmaster, was reached Monday.
In filing a proposed settlement that would allow the merger, the Department of Justice framed the compromise as a way of safeguarding consumers. But in reality, the merger plan safeguards a few large companies with stakes in the concert business, and leaves everyone else — including fans and local concert promoters — on the outside looking in.
The merger would bring together the two companies most responsible for rising concert ticket prices in the past decade.
Prices have more than doubled in that time, to an average of $70 for the top tours, and observers expect ticket prices and service fees to continue climbing.
"I honestly don't think you'll see ticket prices go down," said Gary Bongiovanni, editor in chief of concert industry bible Pollstar.
"The so-called major concessions are an insignificant whitewash," said artist manager David Viecelli of the Billions Corp. "While they will be hidden, there is no question the 'convenience' fees customers will be paying will increase."
In a statement, the Justice Department agreed with the merger's critics, acknowledging that the merger plan would lessen ticket competition, resulting in higher prices and less innovation. But it went on to say that if the companies met certain conditions — Ticketmaster licensing its ticketing software, divesting ticketing assets and subjecting itself to anti-retaliation provisions — the merger could move ahead, pending court approval.
Under the proposed settlement, Ticketmaster must license ticket software to Live Nation competitor Anschutz Entertainment Group and divest ticketing assets to either Comcast-Spectacor or "another buyer suitable to the department."
The paperwork for the deal was filed in U.S. District Court in Washington, D.C. First came an antitrust suit in which the Department of Justice and 17 state attorneys general moved to block the Live Nation-Ticketmaster merger. At the same time, the department and the attorneys general filed the proposed settlement that the department said "would resolve the competitive concerns in the lawsuit."
"It's all but final," Bongiovanni said. "There's nothing stopping the deal from closing now, especially with AEG and Comcast in support."
That's a shocking development to many who witnessed congressional hearings last year in which Live Nation chief executive Michael Rapino and Ticketmaster chief executive Irving Azoff were verbally eviscerated by legislators who failed to see how the merger would in any way benefit consumers. In an open letter to his fans at the time, Bruce Springsteen said the merger would hurt fans because it would set up "a near monopoly situation in music ticketing."
And it's the fans who have been left out of the behind-the-scenes negotiations that turned what was shaping up to be a public embarrassment for two concert industry giants into a fait accompli.
Live Nation has deals with major artists such as Jay-Z, Madonna and Shakira to represent them in a variety of multimedia platforms and share in revenue streams from merchandise to recorded music. Ticketmaster has been expanding its business as well, partnering with Azoff's Front Line management company and a stable of talent (Christina Aguilera, Van Halen, the Eagles, Guns N' Roses, Jimmy Buffett) that would play many of the same arenas and stadiums booked by Live Nation. In merging the two entities, Live Nation-Ticketmaster would hold a significant position in every aspect of the music business.