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Jerry Brown's Role in the LiveNation, Tickemaster Merger
Photo by Brymo via Flickr
Concerned about the dominance LiveNation and Ticketmaster would have if allowed to merge when a plan was announced last year, California Attorney General Jerry Brown and 16 others states initially opposed such an idea. "Without serious competition, concert-goers will inevitably pay more for concert tickets," Brown said today in a statement. "With this merger agreement, we're taking an important step to ensure a more competitive market for concert-ticket sales."
When concert promoter and venue owner LiveNation, a Beverly Hills based company, entered the ticket selling business, their new direct competitor, the West Hollywood-based Ticketmaster, lost approximately 17% of its revenue. In 2008, Ticketmaster sold more than 141 million tickets valued at more than $8.9 billion. But then the merger happened a month later. A press release from Brown's office explains how it went down, as they see it:
February 2009, Ticketmaster and LiveNation announced that the two companies would merge, creating a dominant force in ticketing and concert-promotion in the United States. The combined entity would control aspects of booking, promotion, "primary ticket sales" (tickets sold at their printed face value), "secondary ticket sales" (ticket sales that occur after the initial sale or "scalped tickets"), merchandising, direct marketing and other artist and venue relationships.
Due to the large number of California venues affected by the merger, Brown's office began an investigation into the impact of the merger on the concert-ticket market and found that LiveNation was the company best positioned to compete with Ticketmaster. The investigation found that the two companies together would hold a virtual monopoly position in the ticket distribution market, with little to no competition in primary ticketing for live music concerts. The settlement seeks to allow for competition in the market by giving concert-promoter AEG the ability to ticket its own concert venues, as well as offer ticketing services at other venues. The agreement also spins off Paciolan, the ticketing unit controlled by Ticketmaster, into an independent ticketing company able to compete in the concert-ticket market.