The Justice Department will investigate the proposed merger of ticketing giant Ticketmaster Entertainment Inc. with Live Nation Inc. to see if it would create an unfair monopoly in the ticket-selling business.
Federal antitrust lawyers are "committed to vigorous enforcement of the merger antitrust laws and will conduct a thorough investigation," Justice Department spokeswoman Gina Talamona said Wednesday.
The deal would match the world's dominant ticket seller, Ticketmaster, with Live Nation, which was once its biggest client and is the world's No. 1 concert promoter.
A Justice Department investigation could take months or longer, and the department has probed Ticketmaster in the past.
Some lawmakers are already urging the government to reject the deal.
Sen. Charles Schumer, D-N.Y., and Rep. Bill Pascrell, D-N.J., want the government to stop the deal in part because of problems experienced with Ticketmaster's recent offering of tickets to Bruce Springsteen shows.
In a letter to Attorney General Eric Holder, the two lawmakers cited recent reporting by The Associated Press about the size and scope of the two companies. Separately Wednesday, lawmakers announced they would hold a House Judiciary subcommittee hearing later this month examining the merger.
Springsteen has also weighed in, opposing the deal.
"The one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near-monopoly situation in music ticketing," Springsteen said on his Web site.
Ticketmaster raised the Boss's ire recently--and more than a few eyebrows--when regular fans were put on hold as Springsteen tickets were shunted immediately to a re-selling site that charged huge markups.
It's a pop-culture minefield for the new Obama administration. Springsteen held a fundraising concert for the president that drew 50,000 fans before the election. The White House Chief of Staff Rahm Emanuel is the brother of Hollywood power broker Ari Emanuel, however, who is on LiveNation's board of directors.
Live Nation owns 140-plus venues and has multiyear comprehensive rights deals covering the tours of Madonna, Jay-Z, U2, Nickelback and Shakira.
Live Nation last year ended a long-term contract to sell its concert tickets through Ticketmaster, and it launched its own ticketing service for its venues in January. That threatened to siphon off at least 15 percent of Ticketmaster's revenue and had set the two companies up for a head-to-head fight to win ticketing contracts.
A merger would quell that fight — and could raise the ire of regulators, antitrust experts said.
Because both companies are large — with market capitalizations of around $400 million — they are required to submit a notice to the Federal Trade Commission and Justice Department for review of antitrust issues.
In 1994, Pearl Jam complained to the government that Ticketmaster refused to agree to low concert ticket prices and fees, and that the grunge band couldn't organize a tour without Ticketmaster's cooperation. The case was dismissed a year later. Attorney General Janet Reno said then that new enterprises were entering the ticketing business.
Ticketmaster sold 141 million tickets in 2007. Aside from concerts, theater shows and family events, it has deals with the NFL, NBA and NHL and the Premier League of U.K. football. It sells tickets for more than 80 percent of the major arenas and stadiums in the U.S., according to the concert tracking firm Pollstar.
Although ticket resale sites have gained in popularity, such as eBay Inc.'s StubHub or RazorGator.com, they rely for their supply on ticket brokers or consumers who bought tickets mainly from Ticketmaster first and are reselling them at a profit.