The conditions imposed by the Justice Department for the proposed merger of Live Nation and Ticketmaster have been announced, and they include some very good prospects for creating a competitive, consumer-friendly market.
According to Assistant Attorney General Christine Varney, Ticketmaster would have to license its ticketing software to competing concert promoter Anschutz Entertainment Group Inc. (a.k.a. AEG) and sell its subsidiary Paciolan to Comcast Corp. subsidiary Comcast-Spectacor. Paciolan sells tens of millions of tickets every year, she said.
The conditions would result in two large, vertically integrated competitors — AEG and Comcast-Spectacor — that would vie for ticketing contracts with the merged entity of Live Nation Inc. and Ticketmaster Entertainment Inc.
The merged entity would also be under a 10-year court order prohibiting it from retaliating against venues that choose to sign ticket-selling contracts with competitors.
Varney announced the merger conditions on Monday, saying the deal as proposed would have been “anticompetitive.”
“It’s going to benefit competition and benefit consumers,” Varney said. “Generally when you see robust competition, you would expect to see prices coming down.”
AEG CEO Tim Leiweke told Billboard.biz he was pleased with the concessions attached to the DOJ approval of the merger:
Anschutz Entertainment Group CEO Tim Leiweke said the concessions … will “enhance our ability to compete effectively in the ticketing, venue operation and live event promotion businesses,” in a prepared statement.
Leiweke said AEG has obtained “contractual commitments” which will allow AEG to operate a private label ticketing site using the Ticketmaster system on “favorable terms.” Ticketmaster will host the ticketing site, including for both AEG-affiliated properties and other clients.
While AEG will have the ability to operate under the private label site for up to five years, AEG has obtained complete flexibility to migrate some or all of its ticketing business to one or more alternative ticketing platforms at any time following the merger. AEG intends to “aggressively explore such alternatives, including ticketing companies both in the U.S. and in other markets with whom AEG is already engaged in on-going discussions.”
In an important detail, AEG also has an option to license and install the Ticketmaster software to power a competing ticketing system should AEG elect not to pursue an alternative technology. Also of importance is the fact that, according to Leiweke, AEG has received “definitive assurances” from Ticketmaster regarding its rights to own and use customer and other data for any tickets that it sells through Ticketmaster.
“Together with other provisions of the Department of Justice’s proposed final judgment, including required divestitures and significant behavioral remedies, we are confident that the arrangements we have reached with the parties will serve to increase competition and further the interests of consumers and other participants in the live entertainment industry, not only in the United States, but in a number of key international markets (including Canada and the United Kingdom, among others),” Leiweke said in the statement.
Both Ticketmaster and Live Nation agreed to the proposed conditions, but a U.S. District Court in Washington, D.C. still needs to approve the settlement.