Live Nation, Ticketmaster merge

[radicaltheory]

WASHINGTON/NEW YORK (Reuters) - Ticketmaster Entertainment and the world's largest concert promoter, Live Nation, completed their merger on Monday after agreeing with U.S. antitrust officials to divest some assets.

Deals

The new Live Nation Entertainment will own more than 140 concert venues globally, sell around 140 million tickets a year and promote 22,000 concerts annually.

The U.S. Justice Department required Ticketmaster to license its primary ticketing software to a competitor, sell off one ticketing unit, and agree to be barred from retaliating against venue owners who use a competing ticket service.

The combination had attracted opposition from artists, fans, competitors and some lawmakers, concerned the new company could dictate the terms for major events.

Some antitrust experts had predicted the government might go to court to try to block the deal.

"I was prepared to litigate at any and all points, until a settlement was achieved that efficiently dealt with all our anti-competitive concerns," Christine Varney, head of the Justice Department's Antitrust Division, told reporters on Monday.

Varney said she expected to see ticket prices decline as a result of the settlement.

Investors welcomed the settlement, sending shares of Live Nation up 14.7 percent to close at $10.51 on the New York Stock Exchange. Ticketmaster shares rose 15.8 percent to finish at 15.40 in regular trading on Nasdaq.

At those prices the all-stock deal would be worth $835 million. The new company will trade under the "LYV" symbol on the NYSE.

"The conditions seem to be relatively benign," said Tuna Amobi, equity analyst at Standard & Poor's. "There are no major divestitures required. I don't know that is going to create the kind of even, competitive field that was intended."

MERGER TEST

Live Nation and Ticketmaster had made some forays into each other's turf, giving the combination elements of both a vertical and horizontal merger.

Ticketmaster also owns Front Line Management, the leading artist management firm founded by Ticketmaster Chief Executive Officer Irving Azoff. Its roster of 200-plus artists includes The Eagles and Miley Cyrus.

Live Nation owns major venues like the Gibson Amphitheatre in Los Angeles and the House of Blues chain, and has long-term contracts with top artists like Madonna, U2, Jay-Z and Nickelback.

Although a relatively small combination in U.S. business terms, some had come to view the deal as a test case for the Obama administration's pledge to get tough on mergers.

"I will be keeping a very close eye on this settlement as we go forward," Varney said. "You can probably expect to see three competitors and generally when you see robust competition you see prices coming down."

The agreement will last for ten years. Seventeen states joined in the settlement and Canada has a parallel pact imposing similar conditions on the deal.

TicketDisaster.org, a coalition of competitors and others that had opposed the merger, said monitoring of the new company would be crucial.

"It all comes down to whether (the Justice Department) will indeed be the watchdog they claim they will be," said Seth Hurwitz, chairman of I.M.P., which owns the 9:30 Club, and operates the Merriweather Post Pavilion, both in the Washington D.C. area.

Ticketmaster will be required to license its primary ticketing software to Anschutz Entertainment Group (AEG), the second-largest concert promoter and operator of major venues. Within five years, AEG can either buy the software, create its own or partner with another competitor.

Additionally, Ticketmaster will also have to sell its Paciolan Inc ticketing unit. It already has a letter of intent from Comcast Corp's Comcast Spectacor, a sports and entertainment company.

Paciolan could be sold to another buyer that the Justice Department finds suitable, the agency said.

Under the merger terms, Ticketmaster shareholders would receive 1.384 shares of Live Nation common stock for each share of Ticketmaster. Live Nation would own 49.99 percent of the combined company, while Ticketmaster would hold the remaining 50.01 percent.