After nearly a year of intense scrutiny, political posturing
and consumer outcry, it's time for the music business to
come to grips with its new superpower: Live Nation Entertainment.
At a time when live entertainment remains one of the healthier
sectors of the troubled music industry, the combined Live Nation
and Ticketmaster stands to dominate each part of that sector:
touring, management and ticketing.
Live Nation is the largest promoter and venue operator in the world,
owning the majority of North American amphitheaters and promoting
most of the world's top-grossing tours, including U2 and Madonna in
2009. Ticketmaster's Front Line Management, which has for the past
few years aggressively acquired rival management firms, boasts
relationships with more than 200 major touring acts, including the
Eagles, Neil Diamond, Van Halen and Christina Aguilera. And Ticketmaster
Entertainment sold 14 million-plus tickets, valued at more than $8.9
billion, in 2008.
With Front Line's unmatched client roster and Live Nation's long-term
deals with U2, Madonna, Jay-Z, Nickelback, Shakira, Jonas Brothers and
others, Live Nation Entertainment's clout with artists is unrivaled. It's
similarly superior in its reach among music fans. Driven by its market-leading
positions in ticketing, venue ownership and operation, Live Nation can market
to fans when a show is announced, during the event and long after the tour
buses leave town, even if it doesn't bundle tickets with promotion and artist
services, or if there's a "firewall" between promoter and ticketing operations,
as stipulated by the DOJ
Many questions about the deal remain unanswered. The future of Live
Nation Ticketing and its president, Nathan Hubbard, will have to be
addressed. While all ticketing operations will carry the Live Nation banner,
melding with the largest ticketing company in the world won't be easy.
And how aggressive will the newly merged company be in acquiring new
ticketing contracts under the watch of the DOJ? The DOJ has said that it
may investigate the competitive effects of any acquisitions that Live
ation makes of other ticketing companies.
The government won't be the only party keeping a close eye on the
company. So will its shareholders -- especially John Malone, chairman of
Liberty Media, which launched a tender offer to acquire 34.5 million
shares of Live Nation stock a day after the DOJ approved the merger.
Once Liberty completes the offer, it will command a hefty 34.9 percent
stake in Live Nation, up from 14.6 percent.
The international attention placed on this merger has shined a spotlight on
the inner workings of the concert business, not always in a flattering way.
Whether they are pro- or anti-merger, most would agree that the industry
model needs to be adjusted, and this corporate union will see to that.
Source: Reuters