Senate hearing on Ticketmaster/Live Nation merger focuses on Chicago's music business

February 25, 2009


The health of the Chicago concert scene — and whether competition that benefits music lovers will still exist if controversial giants Ticketmaster and Live Nation are allowed to merge — took center stage today during a hearing on Capitol Hill.

The Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights heard testimony from industry watchdogs and independent promoters — including Jerry Mickelson of Chicago-based Jam Productions — as well as the Ticketmaster and Live Nation executives behind the proposed merger.

All of the senators voiced strong skepticism about the merger — including traditional foes Orrin Hatch (R-Utah, and himself an amateur recording artist) and Charles Schumer (D-N.Y., and a Bruce Springsteen fan outraged by Ticketmaster’s handling of the upcoming tour) — and they hurled barbed questions about skyrocketing prices, duplicitous ticket schemes and unfair competition at Ticketmaster head Irving Azoff and Live Nation boss Michael Rapino.

A native of downstate Danville, Azoff stressed his background as a music fan who traveled to Comiskey Park to see the Beatles and who promoted acts such as Dan Fogelberg and REO Speedwagon during his time at the University of Illinois. “This business is in far worse shape than many people realize,” he said, adding that the merger is necessary to save it.

Rapino cited the benefits of Live Nation shows to local economies, claiming that one two-day event last summer at the Alpine Valley Music Theatre in East Troy, Wisc., pumped $5 million into the area. He did not name the artist.

Rapino also argued that competition is alive and well. He cited the example of Chicago, claiming that Live Nation only promotes 16 percent of the concerts here versus 29 percent promoted by Jam. Nationally, he said Live Nation only controls 38 percent of the concert business.

Jam’s Mickelson fired back with numbers of his own, noting that in 2001, Live Nation controlled 161 of the top 200 concert tours. Jam may promote more club and theater shows, Mickelson granted, but Live Nation dominates the larger and much more lucrative arena and amphitheater concerts.

“U2 doesn’t call us. Shakira doesn’t call us. Coldplay doesn’t call us,” Mickelson said, adding that the situation will only get worse if the merger is approved. He called it “vertical integration on steroids” and called the giant corporation “the poster child for why the country has and needs antitrust laws.”

Washington, D.C. concert promoter Seth Hurwitz, co-owner of the legendary 9:30 Club, added, “How much control is too much? You can’t blame Live Nation at this point [for wanting more] any more than you can blame a shark for eating people.”

The hearing ended with Chairman Herb Kohl (D-Wisc.) noting that the committee has urged the Justice Department “to examine [the merger] closely” before granting its approval. Beltway observers say this ruling will be the first significant test of the Obama administration’s stance on antitrust issues.