DealZone

Fuzzy Logic? What’s bad for Live Nation and Ticketmaster isn’t bad for business

December 22, 2009

Live Nation, Ticketmaster deal gets green light in UK

Britain’s Competition Commission did an about-face last night, giving its blessing to the proposed merger of live music giants Live Nation and Ticketmaster. What’s nearly as surprising as the reversal is the starkly negative reasoning behind the decision.

UK regulators had said in October they was concerned about the move to combine the world’s largest concert promoter with the leading ticketing group, saying fans could wind up paying more to see their favorite artists. Certainly artists, fans and politicians have been lined up against the deal, so the backbone to resist the merger seemed solid enough.

But on second thought, the Commission said the new entity would not have the incentive to hurt rivals, in particularly an existing partner of Live Nation’s. “We found that, in most of these cases, the merged entity would suffer significant and immediate losses, with very uncertain prospects for long-term gain … Therefore, we concluded that it was unlikely that the merged entity would harm other ticketing agencies, promoters and venues in these ways.”

So they decided to clear this unpopular merger because they don’t think it will work? I guess the logic is sound. What’s bad for the industry is probably good for consumers as ticket prices may drop. But there’s no guarantee of that. In fact, if they can’t squeeze profit out of the merger, they may have to raise prices. That could be good for the competition, but not consumers.

With a little momentum behind them, and apparently in the same vein of the absurd, the two groups said they remained optimistic there would be a similarly successful outcome in the U.S. and Canada, in line with approvals in Norway and Turkey.

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