Merger Justice

Every once in a while a story comes along that could give the public a negative viewpoint toward the potential Live Nation / Ticketmaster merger, such as the recent Wall Street Journal report about Ticketmaster’s and Irving Azoff’s flirt with ticket brokers. But can it influence the outcome? According to one U.S. congressman, that’s not even the right question.

Rep. Brad Sherman, who represents California’s 27th District (which includes the San Fernando Valley and Burbank), told Pollstar it all comes down to the Justice Department’s understanding of antitrust laws.

“It’s not for a member of Congress to be for or against a merger,” Sherman said. “The private sector does what a private sector is going to do in the absence of governmental interference.”

Sherman says Congress shouldn’t influence the Justice Department’s investigations into antitrust concerns. That would be especially true in this case.

“There are mergers that scream out, ‘This is going to hurt consumers,’” Sherman said, “but this one doesn’t. … And most antitrust analysts would say that in most cases a vertical integration offers as many savings to consumers and efficiencies as it does concerns.”

Sherman is a member of the House subcommittee on courts and competition policy – one of the two subcommittees that heard testimony from the principals of Ticketmaster Entertainment and Live Nation in February. Although TM’s Irving Azoff and Live Nation’s Michael Rapino met skepticism from members of the Senate subcommittee, such as Sen. Chuck Schumer, the environment in the House subcommittee was more relaxed.

Sherman spoke with Pollstar before the WSJ reported on what could be the latest controversy – that two years ago Front Line, Ticketmaster and other big players attempted to align with secondary ticketing companies to share in the revenue streams of brokered tickets. The effort, although likely legal, could still be viewed as questionable by the ticket-buying public. To that effect, Rep. Bill Pascrell reiterated his push for ticketing reform legislation because of this revelation.

But such things do not necessarily change antitrust law.

For instance, Sherman and the rest of the congressional subcommittee members held hearings when the Bruce Springsteen controversy was breaking. The Boss and manager Jon Landau accused Ticketmaster of providing Springsteen tickets on its secondary ticketing site, TicketsNow, while primary tickets were still available.

That in turn generated two letters, one by Sen. Herb Kohl, the chair of the Senate Judiciary Committee’s antitrust subcommittee, and another by Pascrell, signed by 50 colleagues, who urged the Justice Department to be critical of it.

“A lot is being said about the letter circulated by Pascrell,” Sherman said. “But he only has one member of the relevant subcommittee, an erstwhile freshman, who signed. Fourteen-fifteenths of the relevant subcommittee decided not to sign.

“Even the people who signed Pascrell’s letter didn’t say that the merger should be stopped,” he added. “They simply told the Justice Department that it ought to do its job. The only difference is some of us think [we should tell] the Justice Department what to do and others figure they already know it.”

According to Sherman, this is not the type of merger that the government typically prevents, although he wouldn’t be surprised if Live Nation would be required to end its relationship with Germany-based ticketing service CTS Eventim.

Some might not consider that too much of a sacrifice, gaining Ticketmaster as the alternative, but there is a further byproduct.

“If this deal goes through, you then liberate [CTS] to compete without restriction in the U.S. market,” Sherman said. “If anything, that seems to be a step toward competition.”

Although Sherman’s staff has canvassed parties in the private sector, such as AEG, the merger is not high on the list of concerns of the populace.

“As far as civilians go, this isn’t close to being one of the top 5,000 issues of concern to my constituents,” he said.