NCL Personal Finance Issues
New developments in the Ticketmaster-Live Nation merger. In late January, the Department of Justice reached a settlement in its investigation of the proposed Ticketmaster-Live Nation merger, a deal that advocates have worried will mean an even worse situation for consumers of live entertainment. Since then, there have been a number of developments that will affect concertgoers.
Updates on Live Nation Entertainment
Since the Ticketmaster-Live Nation merger was approved by the U.S. Department of Justice on January 25, there have been a number of developments that impact consumers.
First, on February 11, the Competition Commission in the United Kingdom reopened its investigation into the Ticketmaster-Live Nation merger at the request of competitor CTS Eventim. While we believe it is unlikely that this investigation will significantly impact the now-approved merger in the United States, the UK Competition Commission’s decision does underscore the deep impact that the merger will have on the live event industry in the U.S. and abroad.
Second, on February 12, Live Nation Entertainment (the new name of the combined firm) announced a partnership with Wal-Mart to sell tickets in many of the retailer’s stores. Consumers who in the past were able to purchase tickets from locations like the now-defunct Tower Records will now be able to buy their tickets at the world’s largest retailer.
Then, on February 18 the Federal Trade Commission (FTC) announced that it has reached a settlement with Ticketmaster over a series of Bruce Springsteen concerts in 2009 where the ticketing company directed its customers to its secondary ticketing subsidiary, TicketsNow. With TicketsNow, consumers were often forced to spend much more than the face value of the ticket – tickets which Ticketmaster often did not even have in hand (so-called “phantom” tickets). Affected consumers will be offered refunds through an FTC-operated refund program and Live Nation agreed to improve disclosures on its Web sites.
Taken together with the merger, it seems like the road is clear for Live Nation Entertainment to leverage its more dominant market power. With Wal-Mart in its corner (itself no friend to workers), Live Nation will have unprecedented reach. It will be incumbent on consumers and regulators to ensure that Live Nation Entertainment does not use this market power to shut out competition and drive up prices for consumers.
What does the merger mean for consumers? (Originally published January 27, 2010)
In recent months, NCL has been active on this issue, helping to found a coalition of groups, TicketDisaster.org, to fight the merger.
“The DOJ has asked consumers, independent promoters, ticket brokers, artists, and venue owners to take a very large leap of faith – that the conditions imposed on the merger will improve competition and ultimately lead to greater choice and lower prices,” said Sally Greenberg, executive director of the National Consumers League. “While we appreciate the efforts of the DOJ to extract meaningful concessions from the parties, we remain concerned that these two companies, with a history of anti-consumer behavior, will abide only by the letter, and not the spirit of the settlement agreement. It is therefore critically important that the DOJ hold the merged company’s feet to the fire to ensure that the settlement will have its intended effect. The consumer groups, venue owners, promoters, and ticket broker members of our coalition will remain vigilant to ensure that DOJ fulfills this watchdog function.”
So what does this merger mean for consumers? Christine Varney, Assistant Attorney General for Antitrust at the DOJ insisted that the end result for consumers will be lower prices for tickets. “This settlement will preserve competition in primary ticketing and maintain incentives to innovate and discount, thereby benefitting consumers,” said Varney in a statement.
Achieving this laudable goal will not be easy. The consent decree theoretically creates two new ticketing competitors to Live Nation Entertainment (the new name of the merger Ticketmaster-Live Nation) – Anchutz Entertainment Group (AEG) and Comcast-Spectacor. While these two companies have made all the right noises about wanting to compete, the proof will be in the pudding as to how much consumers will ultimately benefit. The consent decree also includes broad anti-retaliation language to keep Live Nation Entertainment from blackballing artists, managers, promoters, and venues that refuse to work with the new conglomerate. How will this be implemented? No one is sure at the moment. How will the secondary ticketing market be impacted? DOJ largely left that question untouched by the agreement. Absent some disincentive, Live Nation Entertainment will likely try to us paperless ticketing -- among other dubious “innovations,” -- to drive secondary ticketing companies and ticket brokers out of business. We don’t think that’s consistent with a competitive market.
To police the consent decree and address the outstanding issues left over in the aftermath of this merger will require a sustained commitment from legislators and regulators. The DOJ and state attorneys general must vigorously enforce the terms of the consent decree. The Federal Trade Commission must be ready to act to protect consumers from unfair and deceptive trade practices in the live event industry. Congress must also be vigilant in its oversight role to make sure that these enforcement agencies do not take their eyes off the ball going forward. The consumer groups, independent owners and promoters, antitrust experts, and ticket broker members of the TicketDisaster.org coalition will certainly be in the thick of things to make sure that that happens.
This is not the end of the fight to defend the rights on consumers in the live event industry. It is only the beginning. Stay tuned for more from NCL and the other members of TicketDisaster.org coalition on this issue.