Seeking to bolster competition in the ticket service arena, Justice Department antitrust regulators today announced a proposed settlement with Ticketmaster Entertainment and Live Nation that would require what officials called "significant" changes to their planned merger.
Antitrust Division lawyers simultaneously filed a complaint against and a settlement with Ticketmaster and Live Nation in the U.S. District Court for the District of Columbia today. Seventeen state attorneys general joined in the suit, which sought to block the merger. Live Nation, the country’s largest concert promoter, has been Ticketmaster’s largest client for a number of years. The merger was announced in February 2009.
The settlement requires Ticketmaster, represented by Gibson, Dunn & Crutcher, to license its ticketing software, divest certain ticketing assets and subject itself to behavioral remedies that prohibit retaliatory action against venues that do not use Ticketmaster. Justice officials said they expect ticket prices to fall with increased competition in the market.
Assistant Attorney General Christine Varney, who announced the settlement in a meeting with reporters this afternoon, said the Justice Department concluded the merger, as originally proposed, was anti-competitive.
“The required divestitures and behavioral prohibitions alleviate our concerns,” Varney, head of the Antitrust Division, said in prepared remarks. The settlement “will preserve competition in primary ticketing and maintain incentives to innovate and discount, thereby benefiting consumers. This is the right result.”
Under the settlement, Ticketmaster must divest the ticketing business Paciolan, which sells millions of tickets annually. Ticketmaster, according to the Justice Department, will divest more ticketing than it will gain through its acquisition of Live Nation. Also, Ticketmaster will be required to license its ticketing software to AEG, a competitor.
A lawyer for Live Nation, Daniel Wall, called the settlement a “fair compromise between a very aggressive enforcement theory and a remedy that still allows the parties to realize the value from the deal.” Wall is a partner in Latham & Watkins' San Francisco office and chair of the firm’s global antitrust and competition practice.
Gibson Dunn partner Steven Sletten, an antitrust litigator in the firm’s Los Angeles office, said in a statement that “we felt that the DOJ's case against the merger was not particularly strong on existing antitrust law.”
The parties, Sletten said, negotiated a resolution that allows the “merger to proceed without the need for lengthy litigation, and the business guys at Ticketmaster and Live Nation can get on with integrating the two companies for the benefit of consumers, artists, sports teams, venues, and pretty much everyone in the chain of live entertainment."