The proposals to merge Ticketmaster and LiveNation into a single focus of hatred and disgust have come before the wise lawmakers on Capitol Hill, with attempts to save the entire US economy taking back seat to hearings on the plan:
The subcommittee on antitrust, competition policy and consumer rights used the approximately 90-minute hearing to discuss how the possible merger could affect ticket prices, the impact it would have on new ticketing businesses wanting to enter the marketplace and how it might expose sales data from rival promoters, among other issues.
They also crammed in a few questions on what it would mean for Guam, the likelihood of life on other planets and why gorillas don't keep evolving into people. After all, you'd find it difficult to fill an hour and a half with
just the future of live music.
The CEOs of the two companies went to Washington, to tell everyone how great their new world would be made. Live Nation president/CEO Michael Rapino and Ticketmaster CEO Irving Azoff can hardly wait to be allowed to make out in public. It's not just a new world they're proposing - it's a whole different world. One with different physics in:
"Artists don't sit around and say, 'Let's raise prices,'" said Azoff, who also heads up Ticketmaster's Front Line Management, which has a roster of more than 200 acts. "If we're successful in doing this, I for sure think we'll be able to show that ticket prices will go down, because it will create a bigger pot of money for artists from other avenues in their careers."
Ah yes. Because merging a giant promotion company with a giant ticket agency is an action which generates large pots of money from out of nowhere. Like when you open a self-seal envelope in the dark and it makes blue light. That's exactly the way this will make money.
Let's buy Azoff's starling claim for just a moment, and imagine Kid Rock and his manager getting ready to set prices for his shows next summer.
- Hey, Kid, you were going to charge thirty bucks a ticket, right?
- Yeah
- Did you know that the geological collision of Ticketmaster and LiveNation has created huge new pots of money?
- No... can we have some of that money?
- Yes. Yes, we can.
- Right. So... given that we've got all this new money, do we want to drop the prices of tickets any?
- Do we
have to? Because of the new money?
- Well... no. But we could. We could share our good fortune with the fans.
[long, awkward pause]
- Okay, thirty bucks a ticket it is.
- Plus booking fee.
- Plus booking fee.
And that fee is where the real trouble lies. Sure, bands might not put up their prices simply because Evil and Evil have become Consolidated Evil, but surely the whole being-less-competition-in-the-music-ticketing-business might very well force up the fees being charged on top of the ticket price?
I could be wrong, though. Apparently the concert-goers will welcome their new twin-faced, one-bodied overlords with in-street merry jigging:
Rapino said the combined companies would not hurt music fans or rival businesses. "This deal would benefit them as we spur competition and innovation," he said. "If we don't make significant changes to the business model and if we don't build new structures, we may be back here in the future for another hearing on the death of the American music industry."
Nothing spurs competition like having a single, unassailable corporate monolith at the heart of an industry. Who does TicketNation think is going to be competing with them, as they suck up every ticket deal for every venue of any size in the US? Does he think that the free market will suddenly spur everyone to travel to Boise to go and see jugbands as a result of the merger?
Still: you've got it there in black and white - if you don't let the executives share a board table,
you will kill music. Think hard, and picture a world where LiveNation does a bit of ticketing and mostly promotes, and Ticketmaster does a bit of management but mostly charges scandalous mark-ups on ticket prices. What does that world sound like? It's silent, isn't it? Even the birds will stop singing if this merger is allowed to fail.
It's as serious as that.
Still, there's all those other ticketing businesses:
Azoff argued that the merger could bring new opportunities for existing ticketing companies. "We've been told and we believe that if this merger were approved, that many of our larger clients would opt out," he said, pointing out that Ticketmaster has about 11,000 clients. "From hearing all the comments that I hear, I think that so many people would be upset about this merger that I'm sure a lot of our clients would leave."
Not, of course, that anyone is upset at the merger. Azoff is quite blase about the prospect of other clients running to those other ticket agencies, such as... uh, the other ticket places. Almost as if, ooh, his new company would run a load of large venues, represent the management of several big bands and promote a sizeable chunk of America's live music.
As a general rule of thumb, if a manager is prepared to stand up in public and virtually hope that customers might take their business elsewhere, the customers are unlikely to be blue chip.
Some promoters are worried that Ticketmaster having a big promotions business of their own would leave their data open to being shown to the competition:
Rapino assured the subcommittee that Live Nation Entertainment's concert division "would not have access to the ticketing division data. He added, "the concert division should have no access to anything [...] any other promoter does in any building or anything in the ticketing business."
And, if we've learned one thing in the last twelve months, you can always rely on a massive corporation to be nothing other than totally trustworthy.
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