January 26, 2010 in Nation/World

Ticketmaster merger approved

Dawn C. Chmielewski, Ben Fritz And Randy Lewis Los Angeles Times

Giving its blessing to a deal that could transform the music industry, the Department of Justice on Monday approved the controversial merger of the nation’s dominant ticket seller and the world’s largest concert promoter – but only after extracting major concessions to address concerns that Ticketmaster and Live Nation would have a stranglehold over ticket sales.

The merger, which was the first major review for Obama administration antitrust regulators, will create a new music industry Goliath with hands in every pocket of the music business. The newly formed Live Nation Entertainment would have the ability to book concerts, sell tickets and merchandise as well as manage artists all under one roof.

But in order for the $889 million deal to proceed, the two companies agreed to the unusual step of creating a pair of new rivals to ensure a competitive market for ticket sales, which has been one of the few bright spots for the ailing music industry.

“This goes beyond what is normally provided for in a settlement by creating two additional competitors who can go up against the behemoth,” said Matt Cantor, a partner at the law firm Constantine Cannon who specializes in antitrust issues.

Under the agreement, Ticketmaster will give Anschutz Entertainment Group access to its technology so that the Los Angeles firm – which owns and manages nearly 100 venues including the Staples Center – can create its own ticketing service. “AEG is committed to competing in the ticketing business,” said AEG chief executive Timothy J. Leiwicke. Ticketmaster will also be required to divest a subsidiary that provides software for venue operators to sell their own tickets. Comcast Corp.’s sporting events division, Comcast-Spectacor, has signed a letter of intent to acquire the Irvine, Calif., company, called Paciolan.

Live Nation Entertainment also is prohibited from retaliating against venue owners that defect to competitors.

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