Pass GO and play musical monopoly

Live Nation and Ticketmaster Entertainment, two of the music industry’s leading event companies, are attempting to join forces and create Live Nation Entertainment, the world’s “premier live entertainment company.” The official press release cites improvements, including access to tickets, ticket pricing options and increasing attendance at live events as the main reasons behind the merger.

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By Stacy Lee

Monopoly Money (Warner Bros. Records, J Records and Capitol Records)

By Stacy Lee

Live Nation and Ticketmaster Entertainment, two of the music industry’s leading event companies, are attempting to join forces and create Live Nation Entertainment, the world’s “premier live entertainment company.”

The official press release cites improvements, including access to tickets, ticket pricing options and increasing attendance at live events as the main reasons behind the merger.

However, it appears that the real reason for these corporations to merge is money, lots of money.

According to Michael Rapino, CEO of Live Nation, this merger will “create a more diversified company with a stronger financial profile that will drive improved shareholder value.”

In a letter to Live Nation employees, Rapino also said that the partnership will provide “financial resources…to further our ambitions and investment as we continue to deliver…consistent quarterly results.”

Also, as stated in a Live Nation Entertainment “fact sheet,” the new company hopes to cut costs by approximately $40 million a year through a combination of marketing, ticket sales and data centers.

The greatest potential problem with this merger is that Live Nation Entertainment could have “unrivaled power over concert-goers and the prices they pay to see their favorite artists and bands,” said Sen. Charles Schumer of New York.

Fortunately, this merger is not being taken lightly.

Schumer also said that the merger “must be viewed skeptically and scrutinized.”

According to Lamar Smith, ranking member of the House Judiciary Committee, “the proposed vertical merger…presents novel and important issues that Congress and the Justice Department must consider carefully.”

Another major problem with this merger is that it could ultimately drive a wedge between national touring artists and smaller, unknown artists, creating two separate worlds of music.

For example, independent ticket selling Web sites, like Ducat King and eTix, may end up working with the smaller, unknown bands.

On the other hand, Live Nation Entertainment will continue to work with national touring acts like AC/DC, The Killers and U2.

Because of this wedge, smaller bands may have a harder time getting their concerts listed on the new Live Nation Entertainment Web site.

However, to offset this monopoly, there may be an uprising of new independent ticket sellers.

Yet another problem of this potential venture is the influence the new company could hold over its clients, says David Lieberman for USA Today.

For example, the company could refuse to sell tickets to a certain event if they have a disagreement with an artist.

This problem could also potentially reduce performers’ cut in ticket sales, which could be a reason why people like Bruce Springsteen are against the merger.

Despite the many problems with the merger, Live Nation and Ticketmaster Entertainment are pushing forward, hoping to complete the merger by late 2009.

The two companies must now convince Congress and the Justice Department that this plan is in the music industry’s best interest.

It is not clear whether or not the Live Nation and Ticketmaster Entertainment merger will actually happen.

However, one thing is clear.

If this merger is approved, it could essentially change the face of the music industry forever.

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