Live Aid? Assessing the Ability of the Ticketmaster-Live Nation Consent Decree to Restore Competition Levels in the Primary Ticketing Market

Abstract

On February 10, 2009, Ticketmaster and Live Nation entered into a definitive merger agreement. The merger, when consummated, would create Live Nation Entertainment (“LNE”) by combining, inter alia, Live Nation’s event promotion business, its venue ownership r operation arm, and its primary ticketing services with Ticketmaster’s primary ticketing services business, its talent management operations, and its secondary ticketing sales. Over the following eleven and a half months, the Antitrust Division of the United States Department of Justice conducted an investigation into the potential anticompetitive effects of the proposed merger. The Antitrust Division concluded that the combination of Ticketmaster and Live Nation would likely substantially lessen competition in the provision and sale of primary ticketing services for major concert venues in the United States.

Rather than attempting to stop the merger, the Antitrust Division and merging parties entered into a settlement agreement creating remedial conditions for the merger to go forward. To address the potential anticompetitive effects of the transaction, the remedy combines a divestiture package with certain behavioral restrictions governing the conduct of the merged firm towards its competitors. On July 30, 2010, the merger between Ticketmaster and Live Nation was consummated.

Although the long-term implications of this transaction are currently unclear, some of the early information, such as the dramatic increase of Ticketmaster's contractual renewal rate with venues from 85% to 95% as well as AEG’s decision to forego a key structural component of the remedy and work with Outbox rather than Ticketmaster's Host, give early indication that the remedy may be weaker than portrayed. The goal of this paper is to provide an apparatus that will allow individuals to monitor how well the consent order is restoring the competition lost as a result of the merger. This paper identifies a number of independent, easy to monitor, indicia that observers can employ to assess whether or not the consent decree is working.

Keywords: competition, antitrust, Ticketmaster, concert