Live Nation Entertainment: The Emerging Giant

Live Nation Entertainment: The Emerging Giant
By Blakeney Spong
ATHENS, Ga. - What do you get when you combine the nation’s largest ticketing company with the nation’s biggest concert promoter? Answer: the Loch Ness monster of the music industry, not to mention a magnet for anti-trust legislation and a horde of consumer complaints.
In February of 2009, Live Nation and Ticketmaster began negotiations for a merger between the two giants, essentially creating one monster company called Live Nation Entertainment that combined their ticketing, marketing, data centers and back-offices, according to their press release.
“The companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise of $2.5 billion…Live Nation and Ticketmaster shareholders will each own approximately 50 percent of the combined company,” the press release read.
The clear problem with this merger is the monopoly it has forced on the music industry and on concert-goers and music fans. Ticketmaster was, by far, the most successful and well-known ticketing service in the country. Live Nation initially began as a company intent on providing consumers with an alternative, thereby generating competition in the market.
Live Nation seemed to be the company for the job, forcing Ticketmaster to perform at a higher level and prove itself to consumers. Live Nation quickly grew to be the nation’s largest concert promoter, owner of dozens of amphitheaters (including the House of Blues on a smaller ownership scale) and has made over 360 deals with major artists like Madonna, Shakira and Jay-Z. In addition, Live Nation was in charge of 161 of the 200 tours in 2001, according to Billboard magazine.
However, Ticketmaster re-established itself as the premiere ticketing service when it announced a plan to buy a majority of Front Line Management in October 2008. Front Line Management was one of the most powerful management companies in the world, according to Billboard magazine, and boasting touring acts such as the Eagles, Aerosmith, Fleetwood Mac, Jimmy Buffet and Christina Aguilera.
Though Ticketmaster seemed to be on top again, two major ticket debacles (one involving Bruce Springsteen and Ticketmaster, the other involving Live Nation and Phish) produced major disappointment by consumers in both companies and drove down shareholder investments. Shortly thereafter, discussions of a merger between the two companies began to circulate.
“It’s never a good thing when there’s a monopoly in any field. When there’s no competition, they can do whatever they want,” said Savannah Weeks, a 21-year-old Music Business student.
Weeks isn’t the only one with these same concerns. Senator Herb Kohl of Washington commented on the merger after it was announced.
“What does Live Nation’s decision to merge with its competitor rather than fight in the market tell us about the company’s ability to compete with Ticketmaster? If Live Nation can’t compete, who can?” said the Senator.
Bruce Springsteen also expressed his opinion about the merger in a letter on his Web site after the Ticketmaster disaster related to Springsteen’s Working on a Dream tour.
“The only thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing,” Springsteen wrote.
Not everyone has jumped on the bandwagon of disgust over the merger, however.
“I don’t think it’s a big deal. The two companies are good at what they do, and from a business standpoint, the merger makes sense,” said Dustin Barrett, a 21-year-old Finance major. “Merger or not, I wouldn’t have been buying tickets anywhere else. All I’m saying is for me, it didn’t change anything.”
Artists in favor of the merger include Seal, Eddie and Wolfgang Van Halen and Shakira (not a huge shocker considering her $70 million deal with Live Nation).
“Anything that can strengthen the link between music creators and music lovers has my support,” said Seal in a Rolling Stone interview, who has no stake in either company. “I believe the combined company will achieve that by aligning resources, talent and services.”
Live Nation Chief Executive Michael Rapino and Ticketmaster CEO Irving Azoff believe the merger “will help save jobs in the beleaguered music industry by forming a strong American company that can fend off foreign takeover threats.”
While this may be true, the central argument for opponents of the merger stand by the fact that concert-goers have no choice but to pay the prices and fees set forth by Live Nation Entertainment to see their favorite musicians. They have no legitimate alternative to turn to if they are unsatisfied with or overcharged by this ticketing conglomerate.
“I wanted to go to the Coldplay show this summer, but the tickets were $30, a $20 parking fee, a $13 convenience charge and there may have been another venue fee. I just couldn’t afford it,” said Weeks. “I feel like the real victim is unfortunately the music fan.”
The outcome of anti-trust legislation has yet to be determined, but you can bet the battle will be fierce.
“If nothing else, this controversy demonstrates another ailment of the music industry as the Internet and changing technology have taken over and transformed our daily lives,” said Haley Walker, a 21-year-old International Business major.