Terms were announced this week by the US Justice Department under which Ticketmaster can merge with Live Nation to create Live Nation Entertainment. Ticketmaster has to get rid of its self-ticketing subsidiary, Paciolan, which it will sell to Comcast-Spectator, and it must license its Ticketmaster Host technology to rival concert promoter Anschutz Entertainment Group (AEG).
The companies then left no time for reconsideration, completing the merger on the same day clearance was given. Ticketmaster shareholders will get 1.474 shares of Live Nation stock for each share they hold in Ticketmaster. It will trade on the US stock market as LYV and the Ticketmaster stock has already ceased trading.
The deal was also cleared by the Canadian Bureau of Competition which was the only other authority which still had outstanding issues with the deal.
It is largely understood that in order to make the merged entity profitable live event ticket pricing in the US and some parts of Europe will immediately have to rise, perhaps considerable.
There are other competitive conditions which relate to how tickets are issued and how events are promoted which have not been made public, but which have also been put into place, the company said. The permission took the form of a US consent decree.
Michael Rapino, CEO of Live Nation, said, ‘This is a good and exciting day for the music business, and we are close to finalizing the creation of a new company that will seek to transform the way artists distribute their content and fans can access that content. The Department of Justice was thorough and aggressive in their analysis and their remedies, and we are confident that with this resolution the playing field is competitive and broader as a result of this transaction. We believe that this merger will now create a more diversified company with a great selling platform for artists and a stronger financial profile that will drive improved shareholder value over the long term.’
The opposite of that might read ‘This is a sorry day for the music business, which will makes artists and consumers poorer. We had the Justice Department over a barrel because if we collectively went bust, it would have been worse than the monster we have created. We believe that this merger creates a monopoly in the Western world which it is impossible to compete with,’ and people in entertainment have made it clear on blog sites everywhere that they are seeing the deal that way.
However it certainly does create one opportunity, and that’s the ability for a single entity to set technology standards for how ticketing is approached. For instance cellular operators will be able to cut just a single deal for ticketing which is sent to the mobile phone and then transacted using bar codes or NFC antennas.
The company says that the deal will drive greater attendance at live events and that it can now begin growing around the rest of the world.
Each share of Ticketmaster common stock will be cancelled and converted into the right to receive a number of shares of Live Nation common stock so that Ticketmaster stockholders will get 50.01% of the voting power of the combined company.