The Ticketmaster/Live Nation Merger: What Does It Mean for Consumers and the Future of the Concert Business?
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S. HRG. 111–201 THE TICKETMASTER/LIVE NATION MERGER: WHAT DOES IT MEAN FOR CONSUMERS AND THE FUTURE OF THE CONCERT BUSINESS? HEARING BEFORE THE SUBCOMMITTEE ON ANTITRUST, COMPETITION POLICY AND CONSUMER RIGHTS OF THE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED ELEVENTH CONGRESS FIRST SESSION FEBRUARY 24, 2009 Serial No. J–111–6 Printed for the use of the Committee on the Judiciary ( U.S. GOVERNMENT PRINTING OFFICE 54–048 PDF WASHINGTON : 2010 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 11:12 Jan 04, 2010 Jkt 054048 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\HEARINGS\54048.TXT SJUD1 PsN: CMORC COMMITTEE ON THE JUDICIARY PATRICK J. LEAHY, Vermont, Chairman HERB KOHL, Wisconsin ARLEN SPECTER, Pennsylvania DIANNE FEINSTEIN, California ORRIN G. HATCH, Utah RUSSELL D. FEINGOLD, Wisconsin CHARLES E. GRASSLEY, Iowa CHARLES E. SCHUMER, New York JON KYL, Arizona RICHARD J. DURBIN, Illinois JEFF SESSIONS, Alabama BENJAMIN L. CARDIN, Maryland LINDSEY O. GRAHAM, South Carolina SHELDON WHITEHOUSE, Rhode Island JOHN CORNYN, Texas RON WYDEN, Oregon TOM COBURN, Oklahoma AMY KLOBUCHAR, Minnesota EDWARD E. KAUFMAN, Delaware BRUCE A. COHEN, Chief Counsel and Staff Director NICHOLAS A. ROSSI, Republican Chief Counsel SUBCOMMITTEE ON ANTITRUST, COMPETITION POLICY AND CONSUMER RIGHTS HERB KOHL, Wisconsin, Chairman CHARLES E. SCHUMER, New York ORRIN G. HATCH, Utah SHELDON WHITEHOUSE, Rhode Island ARLEN SPECTER, Pennsylvania RON WYDEN, Oregon CHARLES E. GRASSLEY, Iowa AMY KLOBUCHAR, Minnesota TOM COBURN, Oklahoma EDWARD E. KAUFMAN, Delaware CAROLINA HOLLAND, Chief Counsel/Staff Director (II) VerDate Nov 24 2008 11:12 Jan 04, 2010 Jkt 054048 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\54048.TXT SJUD1 PsN: CMORC C O N T E N T S STATEMENTS OF COMMITTEE MEMBERS Page Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah ............................ 5 Klobuchar, Hon. Amy, a U.S. Senator from the State of Minnesota ................... 6 Kohl, Hon. Herb, a U.S. Senator from the State of Wisconsin ............................ 1 prepared statement .......................................................................................... 130 Schumer, Hon. Charles E., a U.S. Senator from the State of New York ............ 3 prepared statement .......................................................................................... 162 WITNESSES Azoff, Irving, Chief Executive Officer, Ticketmaster Entertainment, Inc., West Hollywood, California .......................................................................................... 9 Balto, David A., Senior Fellow, Center for American Progress, Washington, DC .......................................................................................................................... 14 Hurwitz, Seth, Co-Owner, I.M.P. Productions and 9:30 Club, Washington, DC .......................................................................................................................... 12 Mickelson, Jerry, Chairman and Executive Vice President, Jam Productions, Chicago, Illinois .................................................................................................... 11 Rapino, Michael, President and Chief Executive Officer, Live Nation, Beverly Hills, California .................................................................................................... 7 QUESTIONS AND ANSWERS Responses of Irving Azoff to questions submitted by Senators Kohl and Schu- mer ........................................................................................................................ 35 Responses of David Balto to questions submitted by Senators Kohl and Schu- mer ........................................................................................................................ 62 Responses of Seth Hurwitz to questions submitted by Senator Kohl ................. 66 Responses of Jerry Mickelson to questions submitted by Senator Kohl ............. 68 Responses from Michael Rapino to questions submitted by Senators Kohl and Schumer ......................................................................................................... 79 SUBMISSIONS FOR THE RECORD Azoff, Irving, Chief Executive Officer, Ticketmaster Entertainment, Inc., West Hollywood, California, statement ....................................................................... 87 Balto, David A., Senior Fellow, Center for American Progress, Washington, D.C., statement .................................................................................................... 93 Corgan, Billy, February 24, 2009, letter ................................................................ 108 Gabrielli, Bob, Senior Vice President, Broadcasting Operations and Distribu- tion, DIRECTV, Inc., Washington, D.C., statement .......................................... 111 Hurwitz, Seth, Co-Owner, I.M.P. Productions and 9:30 Club, Washington, D.C., statement .................................................................................................... 126 Mickelson, Jerry, Chairman and Executive Vice President, Jam Productions, Chicago, Illinois, statement ................................................................................. 132 Mountford, Mike, Chief Executive Officer, National Programming Service, Indianapolis, Indiana, statement ........................................................................ 148 Rapino, Michael, President and Chief Executive Officer, Live Nation, Beverly Hills, California, statement ................................................................................. 156 (III) VerDate Nov 24 2008 11:12 Jan 04, 2010 Jkt 054048 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\54048.TXT SJUD1 PsN: CMORC VerDate Nov 24 2008 11:12 Jan 04, 2010 Jkt 054048 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\54048.TXT SJUD1 PsN: CMORC THE TICKETMASTER/LIVE NATION MERGER: WHAT DOES IT MEAN FOR CONSUMERS AND THE FUTURE OF THE CONCERT BUSI- NESS? TUESDAY, FEBRUARY 24, 2009 U.S. SENATE, SUBCOMMITTEE ON ANTITRUST, COMPETITION POLICY AND CONSUMER RIGHTS, COMMITTEE ON THE JUDICIARY, Washington, DC. The Committee met, pursuant to notice, at 2:29 p.m., in room SD–226, Dirksen Senate Office Building, Hon. Herb Kohl, Chair- man of the Subcommittee, presiding. Present: Senators Kohl, Schumer, Feingold, Klobuchar, and Hatch. OPENING STATEMENT OF HON. HERB KOHL, A U.S. SENATOR FROM THE STATE OF WISCONSIN Chairman KOHL. Good afternoon to one and all. We appreciate your being here today. Today we will examine the recently announced merger between Ticketmaster and Live Nation. This merger will combine two enter- tainment powerhouses: Ticketmaster, the Nation’s leading ticketing company, and Live Nation, the world’s largest concert promoter, owner, or operator of hundreds of concert venues, and a recent en- trant into the ticketing business. This merger will not only expand Ticketmaster’s control of the ticketing market by eliminating a competitor, but it is also creating an entity that will control the en- tire chain of the concert business—from artist management to con- cert promotion and production to ticketing and ticket resale. We are here today to focus on what this deal will mean for the millions of concert-goers across our country. Ticketmaster and Live Nation argue that this merger will create efficiencies which ulti- mately will serve consumers. But we have good reason to be skep- tical as to whether music fans will truly realize these benefits. Critics of this merger allege the deal will combine two competitors in the evolving entertainment business by creating an enormous, vertically integrated entertainment giant that will dominate all as- pects of the business. They argue that the strength of this com- bined company will make it impossible for new competitors in ticketing or concert promotion to emerge, and that consumers will pay higher prices as a result. (1) VerDate Nov 24 2008 11:12 Jan 04, 2010 Jkt 054048 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\54048.TXT SJUD1 PsN: CMORC 2 Live Nation owns or has operating agreements with 140 amphi- theaters, clubs, theaters, and small music venues, 30 music fes- tivals, and 305 large arenas. It also has exclusive deals with mar- quee artists, including U2, Madonna, and the Jonas Brothers, to name just a few. The company recently launched Live Nation Ticketing which makes it a viable competitor to Ticketmaster. Ticketmaster is the Nation’s dominant ticket seller, processing in 2007 more than 280 million tickets and $8.3 billion in sales for thousands of venues—including more than 77 of the 100 largest venues. By some accounts, Ticketmaster controls 70 to 80 percent of all concert ticket sales. Late last year, it acquired a management company that manages 200 artists, Front Line Management, and a leading ticket resale company. The combination has the potential to create one company with a stranglehold on all segments of the concert business. It raises seri- ous concerns for independent concert promoters who give a plat- form to new and less established artists. When these promoters book acts in the hundreds of venues under the Live Nation/ Ticketmaster umbrella, they will have to use the merged company’s ticketing services. What this means is that the independent pro- moters will have to reveal a treasure trove of competitive informa- tion