Merger Talks

With good reason, there has been a lot of discussion around my office lately on the implications of the proposed merger of our parent company Ticketmaster with Live Nation. About a week after the announcement, Congress (unsurprisingly) decided to getting involved, with the Senate Judiciary Antitrust Subcommittee announcing a February 24 hearing to examine the deal and what it would mean for both end consumers and the future of the concert business.

If you’re looking for a way to kill two hours, you can stream the hearing and read the testimonies here; the House Judiciary Subcommittee on Courts and Competition Policy has also announced a similar hearing scheduled for today, February 26.  A large portion of the first hearing centered around the Springsteen/Ticketsnow debacle, which anyone that knows me would know was a sensitive subject at the time (I got my Greensboro tickets for the tour so disaster avoided!).

Personally, all the recent drama has been very interesting to follow, considering that I’ve always been a huge fan of the concert experience, I now work in the industry, and I spent my last two collegiate years in business classes.  The merger raises both horizontal and vertical issues, and the potential horizontal costs of the merger will have to be weighed against the potential vertical benefits.

I believe the Springsteen incident highlighted how a large portion of the general public doesn’t fully understand how the ticketing process works.  Fans justifiably want their desired tickets at a reasonable price to see their favorite artist on tour and the only company seemingly standing in their way is Ticketmaster.  The Ticketmaster brand has suffered dramatically over the years as a result of being the final component facing the end user for the rest of the equally guilty group involved in the tour planning.  This process may not be entirely fair, but it was a decision Ticketmaster agreed to take when the decision was made to tack on convenience fees outside of the perceived ticket price instead of making them entirely inclusive.

I am not going to get into my personal opinion of the whole ordeal, but I thought I’d share some interesting takes that I’ve read so far that might help shine some light on the process to those with less of a background.  The official hearing video linked above provides a lot of insight from the panelists, but I got the vibe that the Congressmen involved didn’t do enough homework before coming to a fairly biased opinion entering the hearing.  Check out popular industry commentator Bob Lefsetz’s opinion on the newly appointed leader and the merger.  There was also an interesting article on Irving recently published in the Wall Street Journal.

For a scholarly take on the whole merger, I highly recommend checking out Vanderbilt’s Luke Froeb’s written testimony to the House Subcommittee.  Froeb is a professor at Vanderbilt’s Owen Business School and used to head the review arm of the FTC.  The House asked him to testify on the proposed deal, and his statement provides a really easy-to-understand look at mergers and acquisitions.

After watching the first hearing, Congress doesn’t seem head over heels about the merger.  Regardless, the industry is going to need to come up with some viable answers eventually…

3 Responses to “Merger Talks”

  1. cbgb Says:

    i had no idea there was a live nation/ticketmaster senate hearing…wow. but i finally caught up on the springsteen debacle…glad you got your greensboro tickets:)

  2. cbgb Says:

    what? why does my comment have to be moderated? and the time is totally off on this thing…btw.

  3. AB Says:

    From someone who spent his last 2 collegiate years in political science classes, I think your guess about the congressmen (not) doing their homework is probably pretty accurate.

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