Live Nation, Ticketmaster seal the deal

As expected, the controversial tie-up between Live Nation, the world’s largest concert promoter, and Ticketmaster, the largest ticket agency, won regulatory approval from the Justice Department earlier this week. And no sooner had Justice closed the book than both companies locked lips and rebranded their new affiliation as Live Nation Entertainment.

So far, the honeymoon has been on Wall Street. A day after the merger, Liberty Media, which held a 30 percent stake in Ticketmaster, announced its intent to buy 34.5 million shares in the new company at a 14 percent premium over its Monday closing price. That would boost Liberty’s stake to 35 percent, with the option of buying more come August. That news sent shares in the new company skyward.

Initially, the merger was structured so that no single shareholder owned a controlling interest. That seems par for the course for any entity coming under anti-trust scrutiny. However, Liberty would stand to gain two board seats and a powerful hedge against CEO Michael Rapino. And while Liberty has explained its plan to use the stake for investment purposes only, the company has previously indicated an interest in being a more active investor in its holdings.

However it plays out behind the scenes, the newly christened Live Nation Entertainment had to make a couple of public concessions in order to win regulatory approval. Ticketmaster agreed to license its software to AEG Live, its largest client, and sell one of its ticketing subsidiaries to Comcast. Both were enough to appease Justice officials, who looked into the proposed deal after industry concerns that the merger would burden consumers with higher ticket prices.

The deal has not left its critics behind, however. Opponents say the Justice Department focused on the wrong aspects of the merger, and that creating potentially two new ticketing companies could prompt higher, not lower, ticket prices. That argument focuses on Live Nation’s control of 135 major concert venues: If competing ticket agencies have to pay more to win business away from those venues, they’ll probably have to charge their customers higher fees.

And let’s not forget those poor scalpers, er, ticket brokers. The National Association of Ticket Brokers is concerned that Live Nation will bypass the broker business by charging the same prices as brokers or require resales to be handled through Live Nation services.

The grumbling isn’t likely to fade anytime soon, but Live Nation Entertainment is here and it won’t be long before the drama plays out.

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Photo by marfis75, used under a CC-Share Alike license.