February 11, 2009 / 10:29 PM / 11 years ago

Live Nation, Ticketmaster deal gathers critics

WASHINGTON, Feb 11 (Reuters) - Top concert promoter Live Nation’s (LYV.N) proposed purchase of No. 1 U.S. ticket vendor Ticketmaster Entertainment TKTM.O is bad for fans and musicians, say some lawmakers and rivals.

The merger, announced Tuesday and worth about $316 million in stock at Wednesday’s closing prices, is getting extra attention due to complaints last week over Ticketmaster’s handling of ticket sales for a Bruce Springsteen tour.

The tickets were sold within minutes, but disappointed fans turned into angry consumers when Ticketmaster pointed them to one of its subsidiaries, reseller TicketsNow, where tickets were for sale at much more than the face value.

Despite an apology from Ticketmaster, Democratic Sen. Charles Schumer, a member of the Judiciary Committee from New York, and Democratic Rep. Bill Pascrell from New Jersey, said they found the incident troubling and have asked for a federal investigation of the relationship with TicketsNow.

“It sounds awfully strange when you call up Ticketmaster at 10:02 and you’re told all the tickets are sold out but TicketsNow has tickets. And TicketsNow of course sells them at a much higher price. And TicketsNow is owned by Ticketmaster,” said Schumer.

Pascrell agreed, saying his office received 1,200 telephone calls complaining about the Springsteen ticket sale snafu. “I think what we want to know is how many tickets that Ticketmaster gave to TicketsNow, and when they did that?”

Since the Springsteen incident surfaced, blogs have been full of similar complaints from people who tried to buy tickets for such shows as Radiohead, Leonard Cohen and Phish.

Live Nation is the world’s dominant promoter — its acts sold 39.3 million tickets last year compared to 13.8 million for No. 2 promoter AEG Live, according to trade publication Pollstar. Live Nation has only recently begun selling tickets.


The lawmakers also signed a letter to Attorney General Eric Holder, expressing opposition to the merger and accusing Ticketmaster of trying to buy a potential rival. Schumer estimated Ticketmaster’s share of the ticket sales market at 65 percent while Live Nation was at 15 percent.

The merging companies seemed to be aware of Ticketmaster’s poor reputation with concert-goers.

“He (Live Nation CEO Michael Rapino) wouldn’t have done this deal if he didn’t think they could change that, quite honestly that’s why the combined company isn’t called Ticketmaster it’s called Live Nation Entertainment,” said a person familiar with the company.

But the shrinking number of independent promoters, many of which use Ticketmaster, fear that the company’s tie-up with their biggest rival, Live Nation, would hurt the independents.

“Live Nation will have access to all my sales records,” said Seth Hurwitz of I.M.P. productions in Washington D.C., who has done business with Ticketmaster for decades. “They (Live Nation) have never divulged their ticket accounts to anyone. That’s just bad.”

He scoffed at the idea that the merger would be good for the consumer.

“Why are they doing this other than trying to take over a potential competitor?” he said. “Ray Charles could see what’s wrong with this.”

Ticketmaster, which has has been irritating concert-goers for almost two decades, ran into trouble with the Justice Department in the mid-1990s after a conflict with the grunge band Pearl Jam.

In a populist move, Pearl Jam wanted to charge $18 per ticket and pushed Ticketmaster to charge a $1.80 service fee per ticket in order to keep the total ticket price below $20. Ticketmaster refused, and Pearl Jam was eventually forced to cancel concerts because it could no alternative to venues that had exclusive deals with Ticketmaster.

The band asked the Justice Department to investigate, which the department did, but closed the probe was closed with no action in 1995. (Editing by Tim Dobbyn)

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