[Federal Register Volume 75, Number 124 (Tuesday, June 29, 2010)]
[Notices]
[Pages 37652-37706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-15686]



[[Page 37651]]

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Part IV





Department of Justice





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Antitrust Division



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United States et al. v. Ticketmaster Entertainment, Inc. et al.; Public 
Comments and Response on Proposed Final Judgment; Notice

  Federal Register / Vol. 75, No. 124 / Tuesday, June 29, 2010 / 
Notices  

[[Page 37652]]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States et al. v. Ticketmaster Entertainment, Inc. et al.; 
Public Comments and Response on Proposed Final Judgment

    Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b)-(h), the United States hereby publishes below the comments 
(without attachments) received on the proposed Final Judgment in United 
States et al. v. Ticketmaster Entertainment, Inc. et al., Civil Action 
No. 1:10-CV-00139-RMC, which were filed in the United States District 
Court for the District of Columbia on June 17, 2010, together with the 
response of the United States to the comments.
    Complete copies of the comments with attachments, and the United 
States' response, are available for inspection at the Department of 
Justice Antitrust Division, 450 Fifth Street, NW., Suite 1010, 
Washington, DC 20530 (telephone: 202-514-2481), on the Department of 
Justice's Web site at http://www.justice.gov/atr/cases/ticket.htm, and 
at the Office of the Clerk of the United States District Court for the 
District of Columbia, 333 Constitution Avenue, NW., Washington, DC 
20001. Copies of any of these materials may be obtained upon request 
and payment of a copying fee.

J. Robert Kramer II,
Director of Operations and Civil Enforcement.

United States District Court for the District of Columbia

United States of America, et al., Plaintiffs, v. Ticketmaster 
Entertainment, Inc., et al., Defendants.
Case: 1:10-cv-00139.
Assigned to: Collyer, Rosemary M.
Assign. Date: 1/25/2010.
Description: Antitrust.

Plaintiff United States' Response to Public Comments

    Pursuant to the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h) (``APPA'' or ``Tunney Act''), the 
United States hereby files the public comments concerning the proposed 
Final Judgment in this case and the United States' response to those 
comments. After careful consideration of the comments, the United 
States continues to believe that the proposed Final Judgment will 
provide an effective and appropriate remedy for the antitrust 
violations alleged in the Amended Complaint. The United States will 
move the Court, pursuant to 15 U.S.C. 16(b)-(h), for entry of the 
proposed Final Judgment after the public comments and this Response 
have been published.\1\
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    \1\ As approved by the Court in a Minute Order dated June 15, 
2010, the United States will publish the Response and the comments 
without attachments or exhibits in the Federal Register. The United 
States will post complete versions of the comments with attachments 
and exhibits on the Antitrust Division's Web site at: http://www.justice.gov/atr/cases/ticket.htm.
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I. Procedural History

    On January 25, 2010, the United States and the States of Arizona, 
Arkansas, California, Florida, Illinois, Iowa, Louisiana, Nebraska, 
Nevada, Ohio, Oregon, Rhode Island, Tennessee, Texas, and Wisconsin, 
and the Commonwealths of Massachusetts and Pennsylvania (the 
``States'') filed the Complaint in this matter, alleging that the 
merger of Ticketmaster Entertainment, Inc. (``Ticketmaster'') and Live 
Nation, Inc. (``Live Nation''), if permitted to proceed, would 
substantially lessen competition in the market for primary ticketing 
services to major concert venues in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18.\2\ Simultaneously, the United States filed a 
Competitive Impact Statement (``CIS''), a proposed Final Judgment, and 
a Hold Separate Stipulation and Order signed by the United States, the 
States, and the defendants consenting to the entry of the proposed 
Final Judgment after compliance with the requirements of the APPA.
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    \2\ An Amended Complaint was filed on January 28, 2010, solely 
to add the States of New Jersey and Washington as plaintiffs.
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    The proposed Final Judgment and CIS were published in the Federal 
Register on February 10, 2010. See 75 FR 6,709 (2010). A summary of the 
terms of the proposed Final Judgment and CIS, together with directions 
for the submission of written comments relating to the proposed Final 
Judgment, were published for seven days in The Washington Post from 
February 26, 2010, through March 4, 2010. The Defendants filed the 
statement required by 15 U.S.C. 16(g) on February 12, 2010. The 60-day 
period for public comments ended on May 3, 2010, and twelve comments 
were received as described below and attached hereto.

II. The Investigation and Proposed Resolution

A. Investigation

    On February 10, 2009, Ticketmaster and Live Nation entered into a 
definitive merger agreement. Over the following eleven and a half 
months, the United States Department of Justice (``Department'') 
conducted an extensive, detailed investigation into the potential 
competitive effects of the proposed merger. As part of the 
investigation, the Department issued Second Requests and twelve Civil 
Investigative Demands (``CIDs'') to the merging parties, as well as 
more than fifty CIDs to third parties. The Department considered more 
than 2.5 million documents received in response to the Second Requests 
and CIDs. More than 250 interviews were conducted with customers, 
competitors, and other individuals with knowledge of the industry, 
including two commenters here--Jam Productions, Ltd. and the group led 
by It's My Party, Inc.--which are competitors and complainants about 
the proposed transaction. The investigative team analyzed their 
concerns, as well as the views and data presented by hundreds of 
others. While the Department was reviewing this transaction, a group of 
state Attorneys General and the Canadian competition authorities 
conducted their own antitrust investigations. Nineteen states joined 
the United States' Amended Complaint and the proposed Final Judgment 
resolving the Amended Complaint; no state has filed a separate lawsuit 
to block the merger or has opposed the proposed Final Judgment before 
this Court. At the conclusion of its investigation, Canada imposed 
parallel relief that is substantively identical to that contained in 
the proposed Final Judgment.\3\
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    \3\ Competition authorities in the United Kingdom also reviewed 
the transaction and ultimately cleared the merger without imposing 
any conditions; market conditions in the United Kingdom, however, 
differ substantially from those prevailing in the United States and 
Canada.
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    As part of its investigation, the Department considered the 
potential competitive effects of the merger on numerous products and 
services, customer groups, and geographic areas. For the vast majority 
of these, including the provision of services to promote live 
entertainment events, the Department determined that the proposed 
merger was unlikely to reduce competition substantially. Because 
Ticketmaster and Live Nation were the two largest providers of primary 
ticketing services, the Department appropriately devoted significant 
time and resources to analyzing whether the combination of the parties' 
primary ticketing services would likely reduce competition. The United 
States concluded that the combination of Ticketmaster and Live Nation 
likely would lessen competition in the provision and sale of primary 
ticketing services for major concert venues in the United States.

[[Page 37653]]

    Primary ticketing is the initial distribution of tickets to an 
event. Ticketing companies are responsible for distributing primary 
ticket inventory through channels such as the Internet, call centers, 
and retail outlets and for enabling the venue to sell tickets at its 
box office. The primary ticketing company provides the technology 
infrastructure for ticket distribution. Primary ticketing firms also 
may provide technology and hardware that allow venues to manage fan 
entry at the event, including everything from handheld scanners that 
ushers use to check fans' tickets to the bar codes on the tickets 
themselves. The overall price a consumer pays for a ticket generally 
includes the face value of the ticket and a variety of service fees 
above the face value of the ticket. Such fees are most often charged by 
the provider of primary ticketing services. The primary ticketing 
provider, however, does not set the face value of the ticket. It is set 
by the promoter and artist.
    The complexity and demands of selling tickets to major concert 
venues requires sophisticated primary ticketing services. A major 
concert venue's primary ticketing provider must be able to withstand 
the heavy transaction volume associated with the first hours when 
tickets to popular concerts become available to concert-goers, offer 
integrated marketing capabilities, and otherwise have a proven track 
record of high quality service. As such, major concert venues have had 
few choices for primary ticketing providers. Ticketmaster had a long-
standing track record of filling these needs. When Ticketmaster and 
Live Nation announced their merger, Live Nation had recently begun 
engaging in primary ticketing services, primarily selling tickets to 
concerts at its own venues as a way to demonstrate to other venues that 
its primary ticketing platform performed well. No primary ticketing 
company other than Ticketmaster and Live Nation had amassed or likely 
could have amassed in the near term sufficient scale to develop a 
reputation for successfully delivering similarly sophisticated primary 
ticketing services.
    Primary ticketing services are sold pursuant to contracts 
individually negotiated with venues. Because primary ticketing 
companies can price discriminate among different venues, the Department 
determined that the proposed transaction could affect different classes 
of venues differently. Specifically, the Department found that major 
concert venues, because of their need for the most sophisticated 
ticketing services, have few ticketing options. These venues can be 
readily identified, and market power can be selectively exercised 
against them. Furthermore, the Department determined that because the 
merged firm could price discriminate, any effects of the proposed 
transaction on foreign venues would be distinct from any effects on 
domestic venues, and thus it was appropriate to include only major 
concert venues located in the United States within the relevant market.
    After its investigation, the United States determined that the 
proposed merger would likely substantially lessen competition for 
primary ticketing services to major concert venues in the United 
States. As explained more fully in the Amended Complaint and CIS, this 
loss of competition would eliminate financial benefits that venues 
enjoyed during the period when Live Nation exerted competitive pressure 
against Ticketmaster, and would reduce incentives to innovate and 
improve primary ticketing services.\1\ As alleged in the Amended 
Complaint, the proposed merger of Ticketmaster and Live Nation would 
remove Live Nation's competitive presence from an already highly 
concentrated and difficult-to-enter market.\2\ The resulting increase 
in concentration, loss of competition, and absence of any reasonable 
prospect of significant new entry or expansion by market incumbents 
likely would result in higher prices for major concert venues and 
reduce innovation in primary ticketing services.\3\
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    \1\ Amended Complaint ] 40 et seq.; CIS Sec.  II(D).
    \2\ Amended Complaint ]] 38, 40, 43, 44; CIS Sec.  II(D).
    \3\ Amended Complaint ] 40 et seq.; CIS Sec.  II(D).
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B. Proposed Final Judgment

    The proposed Final Judgment is designed to preserve competition in 
the market for primary ticketing services to major concert venues in 
the United States by requiring divestitures of assets and mandating 
certain conduct remedies. First, the proposed Final Judgment creates a 
new, vertically integrated primary ticketing company and bolsters 
another company to compete against Live Nation Entertainment.\4\ 
Second, the conduct restraints in the proposed Final Judgment 
supplement these divestitures to ensure that competitive ticketing 
firms will not be improperly foreclosed from the market by the merged 
firm's conduct.
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    \4\ Live Nation Entertainment is the name of the newly merged 
entity. Throughout this Response, the historical Ticketmaster 
ticketing operation is referred to as ``Ticketmaster,'' the artist 
management business is referred to as ``Front Line,'' and the 
promotions and venue management business is referred to as ``Live 
Nation.''
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    The proposed Final Judgment establishes Anschutz Entertainment 
Group, Inc. (``AEG'') as an entrant into primary ticketing services. 
AEG is the second largest promoter in the United States (behind Live 
Nation). AEG also owns, operates, or manages more than 30 major concert 
venues in the United States, owns part of an artist management firm, 
and owns the Los Angeles Kings hockey franchise. Entry will occur via a 
two-stage process. In the first part of the process, the merged firm 
must provide AEG with an AEG-branded ticketing website based on the 
Ticketmaster Host platform, Ticketmaster's primary platform for selling 
tickets.\5\ AEG has the right to use the AEG-branded ticketing website 
to sell tickets at venues it owns, operates, or manages as well as to 
events at any other venues from which AEG secures the right to provide 
primary ticketing services. AEG has the freedom to compete with 
Ticketmaster on the prices it charges to venues for ticketing services 
and on the service fees that are added to a ticket's price.\6\ In the 
second part of the process, AEG may exercise an already negotiated 
right to acquire a perpetual, fully paid-up license to the then-current 
version of the Ticketmaster Host platform, including a copy of the 
source code, which the merged firm must install.\7\ The agreement 
between AEG and the merged firm contains financial incentives for AEG 
to exercise the right. Finally, the proposed Final Judgment prohibits 
the merged firm from providing primary ticketing services to AEG's 
venues after AEG's right to use the AEG-branded ticketing website 
expires, which will take place five years after execution of the 
license.\8\ This provision is critical to preserving competition in the 
primary ticketing services market, because it guarantees that within 
five years, AEG will have to either remain a full fledged primary 
ticketing services competitor or bolster another primary ticketing 
competitor by using them to meet its ticketing needs.
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    \5\ Proposed Final Judgment Sec.  IV.A.2.
    \6\ Id.
    \7\ Id. Sec.  IV.A.1.
    \8\ Id. Sec.  XIII.B.
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    The proposed Final Judgment also requires the merged firm to divest 
Ticketmaster's entire Paciolan line of business \9\ to an independent 
and economically viable competitor in the market for primary ticketing 
services to

[[Page 37654]]

major concert venues.\10\ The merged firm has already divested this 
business to Comcast-Spectacor, LP (``Comcast-Spectacor''), a 
vertically-integrated company whose subsidiary New Era Tickets (``New 
Era'') was one of many licensees of the Paciolan platform prior to the 
divestiture. In addition to its interest in New Era, Comcast-Spectacor 
owns two major U.S. concert venues, a venue management firm that 
manages fifteen other major concert venues, the Philadelphia Flyers, 
the Philadelphia 76ers, a venue/sports marketing company, and a food 
services company whose clients include major concert venues. Comcast-
Spectacor's ticketing business model is different from Ticketmaster's 
in that venue clients, rather than Comcast-Spectacor, independently set 
service fees and venue clients maintain ownership of their ticketing 
data.
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    \9\ In 2008, Paciolan directly handled the sale for more than 9 
million concert and sporting tickets. It also provided in-house 
ticketing solutions for more than 250 clients, including Tickets 
West, Comcast-Spectacor's ticketing solution New Era, and numerous 
colleges, universities and performing arts centers throughout the 
U.S.
    \10\ Id. Sec. Sec.  IV.E., IV.K.
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    The proposed Final Judgment also prohibits the merged firm from 
engaging in certain conduct that could, in theory, prevent equally 
efficient firms from competing effectively.\11\ The proposed Final 
Judgment proscribes retaliation against venue owners who contract or 
consider contracting for primary ticketing services with the merged 
firm's competitors.\12\ The proposed Final Judgment also prohibits the 
merged firm from explicitly or practically requiring venues, or 
threatening to require venues, to take their primary ticketing services 
in order to be allowed to present concerts Live Nation promotes or 
concerts by artists Front Line manages. It likewise prohibits the 
merged firm from explicitly or practically requiring venues, or 
threatening to require venues, to take concerts the merged firm 
promotes or concerts by artists it manages in order to be allowed to 
purchase the merged firm's primary ticketing services.\13\ Further, the 
Final Judgment prohibits the merged firm from using certain ticketing 
data in its non-ticketing business and from providing that data to 
internal promoters and artist managers.\14\ Finally, the proposed Final 
Judgment mandates that the merged firm provide any current primary 
ticketing client with that client's ticketing data promptly upon 
request, if the client chooses not to renew its primary ticketing 
contract.\15\
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    \11\ Id. Sec.  IX.
    \12\ Id. Sec.  IX.A.1.
    \13\ Id. Sec. Sec.  IX.A.2, IX.A.3.
    \14\ Id. Sec.  IX.B.
    \15\ Id. Sec.  IX.C.
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    In sum, the perpetual license of the Ticketmaster Host platform, 
the divestiture of Paciolan, and the conduct remedies will ensure that 
major concert venues will continue to receive the benefits of 
competition in the primary ticketing services market that otherwise 
would be lost as a result of the merger.

III. Standard of Judicial Review

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty-day comment 
period, after which the court shall determine whether entry of the 
proposed Final Judgment ``is in the public interest.'' 15 U.S.C. 
16(e)(1).
    In making that determination in accordance with the statute, the 
court is required to consider:

    (A) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) The impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(1)(A)-(B). In considering these statutory factors, the 
court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (DC Cir. 1995); see generally United States v. SBC 
Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (assessing public 
interest standard under the Tunney Act); United States v. InBev N.V./
S.A., 2009-2 Trade Cas. (CCH) ]76,736, No. 08-1965 (JR), 2009 U.S. 
Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that the 
court's review of a consent judgment is limited and only inquires 
``into whether the government's determination that the proposed 
remedies will cure the antitrust violations alleged in the complaint 
was reasonable, and whether the mechanisms to enforce the Final 
Judgment are clear and manageable'').
    As the United States Court of Appeals for the District of Columbia 
Circuit has held, under the APPA, a court considers, among other 
things, the relationship between the remedy secured and the specific 
allegations set forth in the government's complaint, whether the decree 
is sufficiently clear, whether enforcement mechanisms are sufficient, 
and whether the decree may positively harm third parties. See 
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the decree, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3. Courts have held that:

    [t]he balancing of competing social and political interests 
affected by a proposed antitrust consent decree must be left, in the 
first instance, to the discretion of the Attorney General. The 
court's role in protecting the public interest is one of insuring 
that the government has not breached its duty to the public in 
consenting to the decree. The court is required to determine not 
whether a particular decree is the one that will best serve society, 
but whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\16\ In 
determining whether a proposed settlement is in the public interest, 
the court ``must accord deference to the government's predictions about 
the efficacy of its remedies, and may not require that the remedies 
perfectly match the alleged violations.'' SBC Commc'ns, 489 F. Supp. 2d 
at 17; see also Microsoft, 56 F.3d at 1461 (noting the need for courts 
to be ``deferential to the government's predictions as to the effect of 
the proposed remedies''); United States v. Archer-Daniels-Midland Co., 
272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court should grant 
due respect to the United States' prediction as to the effect of 
proposed remedies, its perception of the market structure, and its 
views of the nature of the case).
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    \16\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States vs. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest' ''.
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    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a

[[Page 37655]]

litigated matter. ``[A] proposed decree must be approved even if it 
falls short of the remedy the court would impose on its own, as long as 
it falls within the range of acceptability or is `within the reaches of 
public interest.''' United States v. Am. Tel. & Tel. Co., 552 F. Supp. 
131, 151 (D.D.C. 1982) (citations omitted) (quoting United States v. 
Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd sub nom. 
Maryland v. United States, 460 U.S. 1001 (1983); see also United States 
v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) 
(approving the consent decree even though the court would have imposed 
a greater remedy). As this Court has previously recognized, to meet 
this standard ``[t]he government need not prove that the settlements 
will perfectly remedy the alleged antitrust harms, it need only provide 
a factual basis for concluding that the settlements are reasonably 
adequate remedies for the alleged harms.'' United States v. Abitibi-
Consolidated Inc., 584 F. Supp. 2d 162, 165 (D.D.C. 2008) (citing SBC 
Commc'ns, 489 F. Supp. 2d at 17). Therefore, the United States ``need 
only provide a factual basis for concluding that the settlements are 
reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 489 
F. Supp. 2d at 17.
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its complaint, rather than to ``construct [its] own 
hypothetical case and then evaluate the decree against that case.'' 
Microsoft, 56 F.3d at 1459. Because the ``court's authority to review 
the decree depends entirely on the government's exercising its 
prosecutorial discretion by bringing a case in the first place,'' it 
follows that ``the court is only authorized to review the decree 
itself,'' and not to ``effectively redraft the complaint'' to inquire 
into other matters that the United States did not pursue. Id. at 1459-
60. As this Court recently confirmed in SBC Communications, courts 
``cannot look beyond the complaint in making the public interest 
determination unless the complaint is drafted so narrowly as to make a 
mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments to the Tunney Act,\17\ Congress made clear 
its intent to preserve the practical benefits of utilizing consent 
decrees in antitrust enforcement, stating ``[n]othing in this section 
shall be construed to require the court to conduct an evidentiary 
hearing or to require the court to permit anyone to intervene.'' 15 
U.S.C. 16(e)(2). The clause reflects what Congress intended when it 
enacted the Tunney Act in 1974, as Senator Tunney explained: ``[t]he 
court is nowhere compelled to go to trial or to engage in extended 
proceedings which might have the effect of vitiating the benefits of 
prompt and less costly settlement through the consent decree process.'' 
119 Cong. Rec. 24,598 (1973) (statement of Senator Tunney). Rather, the 
procedure for the public-interest determination is left to the 
discretion of the court, with the recognition that the court's ``scope 
of review remains sharply proscribed by precedent and the nature of 
Tunney Act proceedings.'' SBC Commc'ns, 489 F. Supp. 2d at 11.
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    \17\ The 2004 amendments substituted the word ``shall'' for 
``may'' when directing the courts to consider the enumerated factors 
and amended the list of factors to focus on competitive 
considerations and address potentially ambiguous judgment terms. 
Compare 15 U.S.C. 16(e) (2004) with 15 U.S.C. 16(e)(1) (2006); see 
also SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004 
amendments ``effected minimal changes'' to Tunney Act review).
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IV. Summary and Response to Public Comments

    During the 60-day public comment period, the United States received 
comments from the following firms or individuals: It's My Party, 
Inc.,\18\ Jam Productions, Ltd., Jack Orbin, Middle East Restaurant, 
Inc., LIVE-FI Technologies, Inc., Kenneth de Anda, Chris Cantz, Joe 
Carlson, Don Crepeau, Jason Keenan, Tom Kuhr, and Gary T. Johnson. Upon 
review, the United States believes that nothing in the comments 
demonstrates that the proposed Final Judgment is not in the public 
interest. What follows is a summary of the comments, and the United 
States' responses to the concerns raised in those comments.
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    \18\ It's My Party, Inc.'s (``IMP'') comment is attached as 
Exhibit A. The comment was filed on behalf of a number of firms, 
namely IMP, It's My Amphitheatre, Inc., Seth Hurwitz (both of which 
are affiliated with IMP), Frank Productions, Inc., Sue McLean and 
Associates, and Metropolitan Talent, Inc. The National Consumers 
League joined IMP's comment. See IMP Comment at 1 n.1.
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A. It's My Party (``IMP '')

    IMP, through its leader, Seth Hurwitz, and various affiliated 
companies, is the operator of the 9:30 Club in Washington, DC and the 
promoter at Merriwether Post Pavilion, an amphitheater in Columbia, 
Maryland. IMP is a competitor of Live Nation Entertainment in both the 
concert promotion and venue operation businesses. IMP has also filed an 
antitrust lawsuit against Live Nation, Inc. alleging that Live Nation's 
pre-merger conduct harmed IMP.
    IMP contends that the proposed Final Judgment will not effectively 
protect competition in the primary ticketing services market because 
the remedy does not address Live Nation Entertainment's ``domination of 
the promotion of popular music concerts by major artists and control of 
venues capable of hosting concerts by major artists.'' \19\ IMP argues 
that Live Nation's vertical integration, culminating in its merger with 
Ticketmaster, has resulted in a firm that controls all aspects of the 
relationship between artists and their fans.\20\ IMP argues that to 
cement its competitive position, Live Nation has improperly expanded 
its promotion business by purchasing the rights to artists' entire 
tours (or even several tours) in one deal, shutting out regional 
promoters such as IMP from the opportunity to bid on individual 
dates.\21\ IMP asserts that Live Nation's share of the promotion market 
for ``popular music concerts by major artists'' is actually 70% and 
that Live Nation Entertainment's dominance in promotions will therefore 
enable it to prevent effective competition in the primary ticketing 
services market, because ticketing competitors cannot promise to supply 
venues with the same breadth of concerts available to Live Nation 
Entertainment.\22\ IMP also argues that primary ticketing competitors 
cannot succeed if they cannot provide ticketing services to venues 
owned by Live Nation Entertainment itself.\23\ IMP argues that if the 
merger is to be allowed at all, additional remedies must be imposed to 
ameliorate the effect of Live Nation Entertainment's dominance of the 
concert business.\24\
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    \19\ Id., at 2.
    \20\ See id., at 8-9.
    \21\ See id., at 9.
    \22\ See e.g., id., at 14, 19-20.
    \23\ See id., at 24.
    \24\ See id., at 26-27.
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    IMP's allegations are not new. It articulated these concerns to the 
United States on several occasions during the investigation of the 
defendants' merger. The United States believes that the proposed Final 
Judgment will remedy any loss of competition in primary ticketing 
services that would result from the merger. The United States did not 
find that, based on the evidence uncovered in the Department's 
investigation, the merger would result in harm to any other relevant 
market, such as concert promotion, venue services, or venue management, 
and therefore does not believe that remedies in such markets are 
appropriate.

[[Page 37656]]

1. Effect of Vertical Integration on Primary Ticketing Services Market
    Contrary to IMP's assertion, the United States is well aware of the 
potential competitive impact of vertical integration on the primary 
ticketing services market and designed its remedy with that potential 
effect in mind. It is well recognized that vertical integration can 
produce procompetitive benefits.\25\ In the present case, vertical 
integration of complementary businesses in the live entertainment 
industry reduces the number of firms that must be compensated for a 
concert. This creates incentives for the vertically integrated entity 
to reduce primary ticketing services prices and service fees. The 
United States, however, was well aware of the concern that it may 
become more important for ticketing service companies to also provide 
live entertainment content in order to compete in primary ticketing for 
major concert venues. Accordingly, the proposed Final Judgment 
establishes AEG--Live Nation's largest competitor in the concert 
promotion business--as a credible, vertically integrated competitor in 
the primary ticketing services market.\26\ Therefore, to the extent it 
becomes important over the next several years for ticketing companies 
to provide access to content in order to compete in primary ticketing, 
AEG's established concert promotion business will make it well-
positioned to provide a viable competitive alternative to the merged 
firm. AEG will also benefit from its long-standing relationships with 
venues developed through its concert promotion business and through its 
venue management operations. Its venues and its concert promotion 
business will also provide scale to AEG's own ticketing business or to 
another ticketing rival to Live Nation Entertainment. The availability 
of AEG's concerts to its own primary ticketing business or to another 
primary ticketer undermines IMP's argument \27\ that the merged firm 
will control so much content that venues will be forced to use 
Ticketmaster's ticketing services.
---------------------------------------------------------------------------

    \25\ See Fruehauf Corp. v. FTC, 603 F.2d 345, 351-52 (2d Cir. 
1979) (``A vertical merger * * * does not * * * automatically have 
an anticompetitive effect * * * or reduce competition * * * '' and 
``may even operate to increase competition''); see also, Phillip E. 
Areeda & Herbert Hovenkamp, Antitrust Law; An Analysis of Antitrust 
Principles and Their Application ] 1020 (3d ed. 2009) (``Antitrust 
Law'') (``Most instances of vertical integration, including those 
that result from mergers, are economically beneficial.'')''; Michael 
Riordan & Steven C. Salop, Evaluating Vertical Mergers; A Post-
Chicago Approach, 63 Antitrust L.J. 513, 522-27 (1995) (discussing a 
variety efficiency benefits from vertical mergers, and summarizing 
that ``[a] variety of efficiency benefits that can reduce costs, 
improve product quality, and reduce prices may ensue from vertical 
mergers'').
    \26\ IMP itself acknowledges that AEG is Live Nation's most 
significant competitor in the concert promotion business. Id. at 21.
    \27\ See id., at 14-15, 17-26.
---------------------------------------------------------------------------

    The United States was also well aware that there are other avenues 
venues may pursue for ticketing services. Venues may increasingly look 
to venue management companies to provide a range of services, including 
primary ticketing. The sale of the Paciolan ticketing business to 
Comcast-Spectacor creates significant additional competitive stimulus 
to the ticketing market that will, in combination with the AEG 
licensing agreement, ensure that the proposed Final Judgment restores 
the competition that may otherwise have been lost as a result of the 
merger. Comcast-Spectacor is well-placed to capitalize on the venue 
relationships it developed as an existing provider of venue management, 
concessions, and fan marketing services. Paciolan and New Era have 
historically pursued a differentiated ticketing strategy under which 
their venue customers control all ticketing fees. New Era plans to 
continue competing using this business model. With its vertically 
integrated operation and venue-friendly business model, Comcast-
Spectacor is well-placed to compete against Live Nation Entertainment 
following the merger. Comcast-Spectacor already participates in many 
aspects of the live entertainment business. Its willingness to invest 
in the ticketing business by purchasing Paciolan, and its commitment to 
providing a competitive alternative to Ticketmaster, again suggests 
that IMP's analysis of the ticketing services market is flawed. If IMP 
were correct, Comcast-Spectacor as a venue owner and manager of venues 
for third parties, would have no choice but to acquire primary 
ticketing services from the merged entity, as it would risk the loss of 
all acts promoted by Live Nation by not selecting Live Nation 
Entertainment as its ticketer.\28\ Like AEG, Comcast-Spectacor has 
fundamentally pursued a competitive strategy at odds with IMP's 
predictions of the future of the primary ticketing business.
---------------------------------------------------------------------------

    \28\ See id., at 24-25.
---------------------------------------------------------------------------

    As described above in Part II.B, the conduct provisions in the 
decree will bolster the structural relief that establishes Comcast-
Spectacor and AEG as primary ticketing services competitors. In 
particular, Section IX.A of the proposed Final Judgment ensures that 
the merged firm cannot retaliate against or refuse to provide concerts 
to venues that choose an alternative to Ticketmaster for primary 
ticketing services. This and other provisions underscore the carefully 
constructed nature of the remedy contained in the proposed Final 
Judgment and further belie the argument presented by IMP \29\ that the 
United States failed to account for the importance of content or 
vertical integration to the primary ticketing services market.
---------------------------------------------------------------------------

    \29\ See id., at 14-15.
---------------------------------------------------------------------------

2. Effect of Vertical Integration on Concert Promotion
    Much of IMP's concerns with Live Nation have nothing to do with the 
merger. Ticketmaster was not in the concert promotion business. As the 
United States discusses in more detail below in its response to Jam's 
comment,\30\ the United States thoroughly investigated the effect of 
the vertical merger of Live Nation's promotion business with 
Ticketmaster's ticketing and artist management businesses. Based on the 
evidence uncovered in the Department's investigation, the United States 
did not find that the merger would significantly harm competition in 
the concert promotion business.
---------------------------------------------------------------------------

    \30\ See infra Sec.  IV.B.1.
---------------------------------------------------------------------------

3. The Effect of Live Nation's Concert Promotion Business on Primary 
Ticketing
    IMP contends that Live Nation dominates concert promotion (and thus 
can leverage that dominance into primary ticketing), based on the 
allegation that Live Nation has a 70% market share in the market for 
the promotion of ``popular music concerts'' by ``major artists.'' \31\ 
In the United States' investigation of this merger, the government 
looked into Live Nation's share of concert promotion. The United States 
used data from Pollstar, an aggregator of live entertainment data 
widely used by those in the industry. This data showed Live Nation with 
a 33% market share of concert revenue at major concert venues. The 
United States finds that IMP's market share calculation is not helpful 
because it is based on a market definition that is not well-suited to 
analyzing how the merger of Ticketmaster and Live Nation would affect 
the ticketing business.\32\
---------------------------------------------------------------------------

    \31\ Id. at 17-21.
    \32\ The United States expresses no view on whether the 
provision of promotional services to ``major artists'' for ``popular 
music concerts'' could be considered a proper antitrust market in 
other contexts.
---------------------------------------------------------------------------

    First, IMP argues that the market should be restricted to ``popular 
music'' as distinct from gospel, jazz, blues, and

[[Page 37657]]

other musical and entertainment genres that are reported to Pollstar as 
``concert revenues.'' \33\ To support this distinction, IMP refers to 
the cross-elasticity of demand for consumers of different types of 
concerts.\34\ However, this is entirely the wrong approach for 
analyzing a merger in the market for the provision of primary tickets 
services to major concert venues. While consumers may have strong 
preferences for particular types of concerts--and for specific artists 
within a particular genre--venues purchase primary ticketing services 
for the distribution of tickets to concerts. From the perspective of a 
venue, the relevant consideration is how much revenue and profit it can 
earn from an event, not the genre of music the artist performs. A 
gospel show and rock show that earn the same revenues for a venue are 
in fact potential substitutes. For example, Merriweather Post Pavilion, 
IMP's own venue, hosted a jazz festival the weekend of June 4 and is 
hosting a rock festival on June 19. Therefore, it is entirely 
appropriate to look at the entire set of entertainment options for 
venues in assessing whether Live Nation so dominates concert promotion 
that it will restrain competition in the market for primary ticketing 
services.
---------------------------------------------------------------------------

    \33\ IMP Comment at 19.
    \34\ Id. at 18-21.
---------------------------------------------------------------------------

    Second, while Live Nation is clearly the largest promoter in the 
country, Pollstar figures include Live Nation promotions within its own 
venues. Live Nation is essentially the exclusive promoter within its 
own amphitheaters and clubs, which account for a substantial portion of 
the overall concert sales reported by Live Nation in Pollstar. The 
concerts Live Nation promotes internally have never been available to 
third party venues. Thus, the more relevant figures are likely to be 
Live Nation's share of concert promotion outside of its own venues, as 
that share is a better measure of Live Nation's significance as 
provider of content to independent venues, and thus of Live Nation's 
ability to ``force'' venues to use Ticketmaster after the merger. 
According to 2008 Pollstar data, Live Nation in fact only accounts for 
23% of the concerts promoted at major concert venues it does not own, 
measured by revenue.\35\ Live Nation's leading position in the 
promotion market is driven to a large degree by its ownership of a 
number of key venues. While the relationship between Live Nation's 
venues and its promotion business is relevant to a Live Nation 
competitor such as IMP, independent venues are not beholden to Live 
Nation for content to nearly the degree that IMP would suggest.\36\
---------------------------------------------------------------------------

    \35\ Measured by number of tickets sold, which IMP claims is the 
superior measure, Live Nation accounts for just 18% of the concerts 
promoted at major concert venues not owned or operated by Live 
Nation.
    \36\ See IMP Comment at 24-25.
---------------------------------------------------------------------------

    Third, IMP contends that only tickets to ``concerts by major 
artists (with an average attendance of between 8,000 to 30,000 fans)'' 
should be counted in calculations of Live Nation's share of the 
promotions market.\37\ According to IMP, it is appropriate to focus 
exclusively on these ``major artists'' because they are the ones most 
likely to appear in amphitheaters. This market share calculation, 
however, exacerbates the flaw identified in the previous paragraph by 
focusing in on a set of concerts where Live Nation's market share is 
exceptionally high due to its ownership of venues, rather than due to 
its significance as a promoter for independent venues. This calculation 
does not shed any light on the importance of Live Nation's promotion 
business to the market for providing ticketing services to non-Live 
Nation amphitheaters or to the many other types of concert venues such 
as clubs, theatres, arenas, and stadiums that also employ primary 
ticketing companies to sell concert tickets. Though IMP excludes 
tickets sold at those venues from its calculation of Live Nation's 
market share, that choice obscures the relationship between Live 
Nation's position as a leading concert promoter and the likely effects 
of its merger with Ticketmaster on buyers of primary ticketing 
services.
---------------------------------------------------------------------------

    \37\ Id. at 20.
---------------------------------------------------------------------------

    In the United States' view, IMP not only overstates the strength of 
Live Nation's promotion position, but may also overstate the 
significance of concert promotion to the overall market for primary 
ticketing services. IMP provides no evidence that decisions by venues 
in choosing a primary ticketing company will be driven solely or 
primarily or even significantly by the number of concerts promoted by 
the merged entity.
    Before the merger, Live Nation based its entry strategy into the 
ticketing business on its ability to promise content to venues. The 
United States' Amended Complaint does not argue, however, that this was 
or is the only possible strategy for competing in the ticketing 
business. For example, the ticketing needs of a venue that hosts 
sporting events will be likely driven as much by the needs of the teams 
they host as they are by their interest in filling dates between 
sporting events with major concerts. A major arena with a professional 
basketball and/or hockey team will need its ticketer to handle season 
ticket sales of sports tickets and provide marketing support for sports 
ticketing sales. Indeed, this is a significant segment of the market, 
as sixty-six major concert venues host major league professional sports 
teams and many of the remaining major concert venues house other sports 
teams (such as minor league hockey franchises or college sports teams) 
which demand robust season ticketing abilities.
    AEG and Comcast-Spectacor own, operate, and manage professional 
sports teams and venues in which professional sports teams play. Given 
that, as noted above, many of the major concert venues also host sports 
teams, both AEG and Comcast-Spectacor will be well-positioned to 
capitalize on their expertise in sports and venue management to compete 
for ticketing contracts in these venues. Paciolan's historical strength 
is also in providing ticketing for sports franchises; when combined 
with Comcast-Spectacor's strength in providing venue management, 
concession, and marketing services to arenas and other buildings, the 
United States believes the result is a viable competitor that, in 
combination with the entry of AEG into primary ticketing, will restore 
any competition in primary ticketing that may be lost as a result of 
the merger.
    The United States respectfully suggests that IMP's analysis of the 
market is too focused on IMP's own issues in competing with Live Nation 
in the amphitheater business to inform analysis of the merger's likely 
effects. IMP exaggerates Live Nation's position in the concert 
promotion market by ignoring many venues that purchase primary 
ticketing services and many artists that play at those venues. A view 
of Live Nation's market position more tailored to assessing the 
competitive effects of the proposed merger reveals that AEG and 
Comcast-Spectacor can fully compete with Live Nation in the primary 
ticketing services market. IMP's comment therefore casts little light 
on competition in the actual product market alleged in the United 
States' complaint--the provision of primary ticketing services to major 
concert venues.
4. Ability To Provide Ticketing Services to Live Nation Venues
    IMP contends that Ticketmaster's competitors, including AEG and 
Comcast-Spectacor, will be unable to compete in the primary ticketing 
market if they are unable to provide primary ticketing services to 
venues that are owned or operated by the merged

[[Page 37658]]

firm.\38\ IMP provides no support for this statement other than a 
general assertion that without access to Live Nation's venues, 
competitors will be unable to penetrate the market and will not be able 
to prevent Live Nation from charging ``supra competitive ticket service 
fees.'' \39\ The United States concluded that ticketing companies do 
not need access to Live Nation's own ticketing volume in order to 
accumulate sufficient scale in the ticketing business to provide 
competitive pricing to venues. AEG's and Comcast-Spectacor's purchases 
of the divestiture assets supports this conclusion. Venues not owned or 
operated by Live Nation--including over 400 of the 500 major concert 
venues--account for a substantial majority of major concert venues and 
revenues and provide a substantial base of business for competing 
ticketing companies to target.
---------------------------------------------------------------------------

    \38\ IMP Comment at 14, 24.
    \39\ Id. at 24.
---------------------------------------------------------------------------

5. IMP's Own Choice of Primary Ticketing Service Provider
    IMP's own choice of ticketing provider--and its ability to choose--
underscores the degree to which IMP's concerns are overstated. Shortly 
after the Amended Complaint and proposed Final Judgment in this matter 
were filed, Seth Hurwitz, the main proprietor of IMP and its 
affiliates, announced that he was terminating Merriweather Post 
Pavilion's ticketing contract with the local Ticketmaster affiliate and 
entering a contract with TicketFly, a recent entrant into the primary 
ticketing services market.\40\ At the same time that Mr. Hurwitz 
alleges that the merger eliminated competition for primary ticketing 
services, IMP left Ticketmaster for a competing ticket company: `` 
`Hopefully this move will demonstrate to people it's possible to have a 
choice,' he said. `We wanted to make that choice' '' \41\ It is 
precisely this choice that the Final Judgment seeks to facilitate, 
whether that choice is exercised to select AEG, Comcast-Spectacor, 
another ticketing company such as TicketFly, or even Ticketmaster.
---------------------------------------------------------------------------

    \40\ See Merriweather drops Ticketmaster, signs with Ticketfly, 
Feb. 18, 2010, available at http://www.ticketfly.com/merriweather-post-pavilion-comes-to-ticketfly.
    \41\ Id.
---------------------------------------------------------------------------

6. Need for Additional Remedial Measures
    IMP asserts that additional remedial measures are required to 
protect competition in the primary ticketing market if the merger of 
Live Nation and Ticketmaster is permitted. IMP proposes that: (1) The 
merged firm be prevented from either offering any inducement to artists 
it manages or promotes to appear at venues it controls or punishing an 
artist who works with a competing promoter or venue; (2) the merged 
firm be prevented from insisting that rival promoters and venue owners 
share profits with Live Nation; and (3) the merged firm be prohibited 
from promoting or hosting more than 75% of any artist's tour.\42\ None 
of these proposals relate to the primary ticketing services market. 
Rather, all of them are designed to dramatically alter competition in 
the concert promotion and venue operation businesses, markets where the 
proposed merger was not challenged by the Department in its Amended 
Complaint in this case. Moreover, some of these proposals, such as the 
limitations on exclusive promotion contracts, would likely inhibit 
efficient competition in the concert promotion and venue operation 
markets more than enhance competition. The proposals would prohibit 
Live Nation from engaging in potentially efficient vertical integration 
or bundling without analysis of whether such conduct has an adverse 
effect on competition either in general or in particular circumstances.
---------------------------------------------------------------------------

    \42\ IMP Comment at 26-27.
---------------------------------------------------------------------------

    IMP also argues that the merged firm should be required ``to return 
at the request of any promoter all data relating to concerts for which 
Ticketmaster provided the ticketing and to delete any such information 
from its electronically stored data and files.'' \43\ The United States 
recognizes the value of information about the price and volume of past 
ticket sales for making decisions about future concerts, and took this 
into consideration in fashioning remedies in this matter. Section IX.C 
of the proposed Final Judgment requires that Ticketmaster provide a 
copy of ticketing data to ticketing clients if they choose to leave 
Ticketmaster, but does not require Ticketmaster to take the additional 
step suggested by IMP \44\ and to purge the data from its files.\45\ 
Aside from the affirmative obligation imposed by Section IX.C, each 
party's rights and obligations regarding the ticketing data will be 
governed by the contract between Ticketmaster and the venue. The United 
States does not believe that IMP's proposal \46\ is necessary to ensure 
that venues are able to leave Ticketmaster for alternative ticketing 
providers. So long as venues have access to their data, they will be 
free to switch ticketing providers.
---------------------------------------------------------------------------

    \43\ Id. at 27.
    \44\ Id. at 27.
    \45\ Instead, Section IX.B of the proposed Final Judgment 
protects venue owners who are also independent promoters by 
prohibiting the sharing of competitively sensitive client ticketing 
data with Live Nation promoters and Front Line artist managers.
    \46\ IMP Comment at 27.
---------------------------------------------------------------------------

B. Jam Productions

    Jam Productions (``Jam'') is a concert promoter based in Chicago, 
Illinois, and a competitor of Live Nation. Jam's comment contends that 
the merger is ``vertical integration on steroids'' and will ``suppress 
or eliminate competition in many segments of the music industry 
including rival concert promoters; primary and secondary ticketing 
companies; artist management firms; talent agencies; venue management 
companies; record companies; artist merchandise, apparel and licensing 
companies; artist fan clubs and sponsorship/marketing companies.''
1. The Vertical Integration Concern
    While Jam's comment provides more in the way of a list of alleged 
past Live Nation misconduct than a cogent analysis of the merger in 
light of the antitrust theory and precedent applicable to vertical 
mergers, the core argument advanced by Jam is nonetheless clear: 
instead of alleging a competitive problem from the combination of two 
competing ticketing companies (that is, challenging the deal as an 
unlawful horizontal merger), the Department should have brought a case 
alleging that competition in non-ticketing markets would be reduced by 
the combination of lines of business that do not compete, but where one 
line supplies an input for the other (that is, challenging the deal as 
an unlawful vertical merger).
    This argument, however, is not a valid basis for rejecting a 
proposed remedy during Tunney Act review. As explained above, in a 
Tunney Act proceeding the Court must evaluate the adequacy of the 
remedy only for the antitrust violations alleged in the complaint. See 
United States v. Microsoft Corp., 56 F.3d 1448, 1459 (DC Cir. 1995). 
The Tunney Act does not usurp the Department's prosecutorial discretion 
to choose what type of case to bring; courts ``cannot look beyond the 
complaint * * * unless the complaint is drafted so narrowly as to make 
a mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15. 
Jam, however, seeks to ``construct [its] own hypothetical case and then 
evaluate the decree against that case''--precisely the approach 
specifically forbidden in Tunney Act proceedings by the DC Circuit. 
Microsoft, 56 F.3d at 1459.
    During its investigation, however, the United States did carefully 
consider

[[Page 37659]]

Jam's allegations \47\ and determined that it could not prove that the 
vertical integration resulting from the merger would significantly harm 
competition in the concert promotion market or any market other than 
primary ticketing services. To be sure, vertical mergers can reduce 
competition under certain circumstances, for example by foreclosing 
rivals from access to an input critical to the ability to compete, 
raising the costs of rivals by preventing them from achieving efficient 
scale, or raising entry barriers. Vertical mergers can, however, also 
be procompetitive by bringing together complementary businesses and 
making the merged firm a more efficient competitor.\48\
---------------------------------------------------------------------------

    \47\ See id. at 6 (acknowledging that during the investigation 
JAM raised the same issues with the United States that it provides 
in its comments).
    \48\ Jam may have been concerned that the merger would make 
LiveNation a more efficient competitor to it when it says: ``The 
critical mass created by the complete vertical integration of the 
live music industry by Live Nation and Ticketmaster puts all its 
competitors at a distinct competitive disadvantage.'' Id. at 19. Of 
course, having companies become more efficient at providing their 
goods or services is generally procompetitive, not anticompetitive.
---------------------------------------------------------------------------

    The United States analyzed whether the addition of Ticketmaster's 
ticketing business and Front Line artist management business to Live 
Nation's concert promotion business would adversely effect competition 
in the concert promotion market. The United States concluded this was 
unlikely for two primary reasons.
    First, although the merged firm will remain an important player in 
the artist management business, it will not have the ability to exclude 
promotion competitors from the market. Even if, in theory, all artists 
managed by Front Line refused to work with promoters other than Live 
Nation, a substantial majority of the artists are not affiliated with 
the merged firm and will be fully available for competing concert 
promoters to present.\49\ Moreover, Front Line is unlikely to withhold 
all of the artists it manages from competing promoters. Front Line has 
no legal right to dictate to its artists which promoters they can use. 
In fact, Front Line has a fiduciary obligation to obtain the best deals 
for its artists, regardless of the interests of other Front Line-
affiliated companies. In addition, artist management services are 
typically provided pursuant to agreements that can be terminated by the 
artist at will. If the merged firm acted or threatened to act contrary 
to the interests of its managed artists, the artists could simply sign 
with another artist manager. There are countless managers capable of 
handling acts of all sizes; indeed, some of the largest artist 
management firms represent only one artist. In light of these factors, 
the United States concluded it was unlikely that the combination of 
Front Line with Live Nation restrict competition in the concert 
promotion business.
---------------------------------------------------------------------------

    \49\ According to Pollstar data, Front Line artists accounted 
for just under 25% of gross sales for the top 50 tours in 2008 in 
North America. Including artists subject to long-term ``360-degree'' 
promotional agreements with Live Nation raises the merged firms' 
share to approximately 30%.
---------------------------------------------------------------------------

    Second, artists would have the ability and incentive to prevent the 
merged firm from exercising market power in concert promotion. There 
are two primary ways that the merged firm could attempt to exercise 
such market power: (1) Reducing compensation paid to artists (or 
otherwise adversely altering the terms on which promotional services 
are provided to artists); or (2) restricting output--i.e., the number 
of concerts--in an effort to raise prices to consumers. In both cases, 
artists would have the incentive to prevent the merged firm from 
harming their own economic interests. Artists would also have the 
ability to turn to a large number of competing concert promoters, 
including AEG and many regional promoters, who would gladly seize on 
the opportunity to expand their promotion business at the expense of 
the merged firm.
    In addition to considering the impact of the merger on the concert 
promotion market, the United States also analyzed the possibility that 
the merger would reduce competition in the market for operating venues. 
The United States did not rule out the possibility that Live Nation's 
ownership of many key venues throughout the country could give the 
merged firm some market power. However, Ticketmaster owned no venues 
and therefore the merger does not result in any increase in the number 
of venues owned or operated by Live Nation. In other words, whatever 
market power Live Nation had in concert promotion or venues before the 
merger would not be enhanced by its merger with Ticketmaster. 
Therefore, the addition of Front Line and the Ticketmaster ticketing 
business to Live Nation seems unlikely to alter the competitive 
dynamics in the venue market. As noted above, Front Line artists 
account for a fairly modest share of the concert business, and the 
merged firm does not ``control'' the Front Line artists to the degree 
that it can prevent them from performing at competing venues.

    Contrary to Jam's contention, the Supreme Court's 1948 Paramount 
decision does not compel the United States to challenge this merger 
under stare decisis.\50\ In Paramount, the Supreme Court was not 
determining the effects of a vertical merger. Rather it was 
fashioning a remedy for a long-running price fixing agreement among 
competing movie studios that had a vertical aspect in that the movie 
studies used their ownership of movie theaters to facilitate their 
price fix. In that context, the Supreme Court instructed that the 
court-ordered remedy should be tailored to the anticompetitive 
conduct at issue and, under the facts in that case, determined that 
the defendant studios had to divest themselves of their movie 
theaters in order to ``uproot'' the long-running price fixing 
agreement. In this case, consistent with Paramount, the United 
States fashioned a remedy that was tailored to the anticompetitive 
conduct alleged in the Amended Complaint.\51\
---------------------------------------------------------------------------

    \50\ Jam Comment at 22 (``So the lawyers who work for the US 
government are consciously choosing the [sic] forget about the Stare 
Decisis doctrine they are all taught in law school.'') (citing 
United States v. Paramount Pictures, Inc., 334 U.S. 131 (1948)).
    \51\ Jam's citations to Eastman Kodak v. Image Technical Servs., 
504 U.S. 451 (1992) and Complaint, United States v. MCA, Civ. No. 
62-942-WM (filed July 13, 1962) are similarly not instructive. 
Eastman Kodak is not a merger case and MCA was a consent decree 
designed to address a long-running anticompetitive conspiracy, only 
one part of which involved a vertical merger.
---------------------------------------------------------------------------

2. Adequacy of Consent Decree Provisions
    Jam contends that the anti-retaliation provision of the proposed 
Final Judgment, Section IX.A, will be difficult to enforce.\52\ The 
United States does not agree. Section XI of the proposed Final Judgment 
contains robust mechanisms enabling the United States to investigate 
any potential violations of the proposed Final Judgment's terms. The 
United States also has significant experience in enforcing a similar 
anti-retaliation provision in the Final Judgment in United States v. 
Microsoft.\53\
---------------------------------------------------------------------------

    \52\ Jam Comment at 20.
    \53\ Final Judgment, United States v. Microsoft, Civ. No. 1:98-
cv-01232 (D.D.C.) (entered Nov. 12, 2002). The Microsoft Final 
Judgment prohibits the company from retaliating against any computer 
software or hardware company that works with a competitor to 
Microsoft's Windows operating system or its related platforms. Id. 
Sec. Sec.  III.A, III.F.1. The United States has effectively 
enforced these provisions of the Microsoft Final Judgment with 
minimal difficulty and controversy.
---------------------------------------------------------------------------

    Jam contends that AEG and Comcast-Spectacor may not succeed due to 
Ticketmaster's ``superior technology'' and the vertical integration of 
Ticketmaster and Live Nation.\54\ However, Ticketmaster's software will 
power the AEG-branded website in the first stage of the 
divestiture,\55\ and AEG has the right to obtain a perpetual license to 
Ticketmaster's software in the second stage.\56\ Consequently, AEG will

[[Page 37660]]

be well-positioned to provide a technologically competitive alternative 
to Ticketmaster. AEG is also a competitor in the concert promotion 
business with access to content, as the United States explains above in 
response to IMP's comments. Comcast-Spectacor, which owns and operates 
a number of major concert venues, will also be a vertically integrated 
primary ticketing competitor. For these reasons, that the proposed 
Final Judgment will ensure that AEG and Comcast-Spectacor will be 
robust competitors in the ticketing business.
---------------------------------------------------------------------------

    \54\ Jam Comment at 21.
    \55\ Proposed Final Judgment Sec.  IV.A.2.
    \56\ Id. Sec.  IV.A.1.
---------------------------------------------------------------------------

C. Jack Orbin

    Jack Orbin is the founder and President of Stone City Attractions, 
a regional concert promoter in the Southwestern United States that 
competes with Live Nation. Orbin contends that the proposed Final 
Judgment will ``drive independent concert promoters out of business'' 
and will reduce competition in the ``live entertainment industry.'' 
\57\ Orbin argues the proposed Final Judgment suffers from three 
faults: (1) ``It fails to secure relief for the consumer by eliminating 
competition of independent concert promoters''; (2) ``The relief fails 
to ensure adequate competition for primary ticket sales and for concert 
promotion, and is insufficient to allow entry into these markets''; and 
(3) ``It fails to adequately prevent [the merged firm] from acquiring 
customer data from independent concert promoters.'' \58\ As noted 
above, these arguments are not a proper subject for Tunney Act review 
because they assert that the United States should have challenged the 
merger on different grounds than those alleged in the Amended 
Complaint.\59\
---------------------------------------------------------------------------

    \57\ Orbin Comment at 3 (attached as Exhibit C).
    \58\ Id. at 4.
    \59\ See United States v. Microsoft Corp., 56 F.3d 1448, 1459 
(DC Cir. 1995).
---------------------------------------------------------------------------

    To the extent the comment relates to the market for primary 
ticketing services, it does not raise issues that suggest that entry of 
the proposed Final Judgment would not be in the public interest.\60\ 
Orbin assumes, without support, that Comcast-Spectacor will be unable 
to expand the use by venues of the Paciolan platform beyond the venues 
in which it is currently used.\61\ However, Paciolan is an existing 
successful ticketing platform that will now be independent of 
Ticketmaster and able to compete with Ticketmaster for primary 
ticketing services contracts. Paciolan has a large client base that 
includes major concert venues (and numerous other venues) and offers a 
completely different pricing model from Ticketmaster, enabling the 
venue to control all service fees, which will put it in a strong 
position to provide a competitive alternative to Ticketmaster.
---------------------------------------------------------------------------

    \60\ Orbin Comment at 5-6.
    \61\ Id.
---------------------------------------------------------------------------

    Orbin is also ``very skeptical'' that AEG will be able to succeed 
as a primary ticketer.\62\ Orbin contends that because the proposed 
Final Judgment requires Ticketmaster to license its Host platform to 
AEG, that AEG will be ``fully beholden and dependent on Ticketmaster.'' 
\63\ This is not accurate. AEG has the right to obtain a copy of the 
Ticketmaster Host Platform and run it on its own systems.\64\ During 
the transition period when Ticketmaster operates a private label 
ticketing service on behalf of AEG, the proposed Final Judgment 
prohibits Ticketmaster from impeding AEG's ability to compete. 
Specifically, Section IV.A.2 requires Ticketmaster to provide an 
operational system within six months with a website that has an AEG-
determined branding, look, and feel; compels Ticketmaster at the 
request of AEG to post links on its website to events sold on the 
private label ticketing service; and explicitly prohibits Ticketmaster 
from having any right or ability to set the ticketing fees charged by 
AEG. If Ticketmaster does not comply, the United States can and will 
move the Court to enforce the provisions of Section IX.A through civil 
and criminal contempt proceedings, as appropriate.
---------------------------------------------------------------------------

    \62\ Id. at 6.
    \63\ Id. at 6.
    \64\ Proposed Final Judgment Sec.  IV.A.1.
---------------------------------------------------------------------------

    Orbin argues that the proposed Final Judgment itself facilitates 
additional vertical integration and will make it more difficult for 
non-vertically integrated firms to compete.\65\ Vertical integration, 
however, is merely one strategy for successful competition in the 
primary ticketing business. The proposed Final Judgment ensures there 
will be two significant competitors to Ticketmaster that offer 
different value propositions through their respective areas of 
expertise. So long as competition is restored to the primary ticketing 
market, ticketing companies will be able to compete along a wide range 
of attributes. For example, some competitors may focus on the 
additional products they can offer in conjunction with primary 
ticketing, while others may specialize in innovative ticketing software 
that, standing alone, provides significant value to venues.
---------------------------------------------------------------------------

    \65\ Orbin Comment at 6.
---------------------------------------------------------------------------

    Finally, Orbin contends that the firewall established by Section 
IX.B is too limited to protect the data of independent concert 
promoters, especially in comparison to a firewall adopted in a recent 
FTC decree involving PepsiCo, Inc., and that it lacks ``any mechanism 
[for] policing the firewall.'' \66\ As an initial matter, the firewall 
set forth in Section IX.B prohibits the sharing of information between 
Live Nation Entertainment's ticketing business and its promotions and 
artist management businesses. Live Nation has technical safeguards in 
place to prevent the disclosure of sensitive information to those not 
appropriately authorized to access it. Live Nation also has created a 
corporate policy governing access to this information, disseminated 
that policy to all employees, and instituted a training program to 
ensure that those with access to sensitive data understand and uphold 
their obligations. Since the entry of the temporary order requiring the 
merged entity to comply with the proposed Final Judgment, the 
Department has been closely monitoring the merged entity and its 
ongoing efforts to develop methods to audit compliance and to submit to 
the Department detailed annual reports about such compliance.
---------------------------------------------------------------------------

    \66\ Id. at 7 (citing In the Matter of PepsiCo., Inc., FTC File 
No. 091 0133 (Feb. 26, 2010) (attached to Orbin Comment)).
---------------------------------------------------------------------------

    Orbin wrongly contends that the proposed Final Judgment lacks ``any 
mechanism of policing the firewall.'' Section XI of the proposed Final 
Judgment provides the United States with a full panoply of tools to 
ensure compliance with the firewall, including the ability to demand 
documents and interview or depose any employee. The United States may 
also require the merged firm to provide written reports, including an 
independent audit or analysis, on any matters relating to the proposed 
Final Judgment. As discussed above, the United States has already 
engaged with the parties on the exact mechanisms in place to ensure 
compliance with the firewall, and the United States is confident that 
the proposed Final Judgment provides it with all the tools it needs to 
enforce the firewall provision.
    A comparison of the firewall in this settlement to that in the FTC 
PepsiCo case is not particularly instructive. Unlike in PepsiCo, the 
firewall in this case is not the central relief contained in the 
proposed Final Judgment. The two divestitures are the core relief and 
the behavioral remedies are designed to supplement that relief in the 
proposed Final Judgment. This is a result of the fact that, unlike in 
PepsiCo, the United States did not allege as a theory of harm in its 
Amended Complaint that a

[[Page 37661]]

vertical merger would result in an anti-competitive information 
exchange. The Department instead alleged that the merger would 
eliminate direct, horizontal competition between Ticketmaster and Live 
Nation in the provision of primary ticketing services to major concert 
venues.

D. Middle East Restaurant, Inc.

    Middle East Restaurant, Inc. (``Middle East Restaurant'') operates 
a restaurant and night club in Cambridge, Massachusetts, and competes 
against Live Nation in the Boston area.\67\ Ticketmaster provides 
primary ticketing services to the company.\68\ Middle East Restaurant 
requests that the proposed Final Judgment be modified to allow 
Ticketmaster's existing ticketing clients to terminate their contract 
and sign with a competing ticketing company.\69\ Middle East Restaurant 
is concerned that it will be at a competitive disadvantage with its 
promotions/venue competitor in the concert business providing its 
ticketing services and therefore profiting from its concerts and 
potentially having access to its data.\70\
---------------------------------------------------------------------------

    \67\ Middle East Restaurant Comment at 1 (attached as Exhibit 
D).
    \68\ Id.
    \69\ Id.
    \70\ Id.
---------------------------------------------------------------------------

    Middle East Restaurant does not allege that its proposal is related 
to competition in the ticketing market. Moreover, it is not necessary 
to allow existing Ticketmaster clients to terminate their contracts in 
order to restore competition in the primary ticketing market. Since the 
average ticketing contract is three to five years in length, every year 
there is a substantial volume of contracts up for bid and available to 
be pursued by AEG, Comcast-Spectacor, and other ticketing competitors. 
Finally, while Middle East Restaurant contends there are ``no systems 
or penalties in place to protect The Middle East's customer's data,'' 
\71\ the firewall provision set forth in Section IX.B will prevent its 
ticketing data from being shared with promotions personnel within the 
merged entity.
---------------------------------------------------------------------------

    \71\ Id.
---------------------------------------------------------------------------

E. Additional Comments

    Finally, the United States received comments from LIVE-FI 
Technologies, Inc. and the following individuals: Kenneth de Anda, 
Chris Cantz, Joe Carlson, Don Crepeau, Jason Keenan, Tom Kuhr, and Gary 
T. Johnson (collectively ``citizen complainants'').\72\ LIVE-FI's 
comment argues that the proposed Final Judgment: (1) ``Omit[s] all 
discussion of the negative anticompetitive impact the merger will have 
upon live event and recording distribution particularly electronic 
broadcasts and transmissions;'' \73\ (2) hurts small companies because 
the divestiture assets were divested to large companies; \74\ and (3) 
that through it this Court has ``failed to adopt explicit protocols and 
safeguards to ensure that private litigants and smaller entities 
maintain equal and fair access to the Courts to protect their rights 
and remedies against the individual defendants and the merged entity.'' 
\75\ The citizen complainants generally argue that they paid high 
service fees, paid hidden service fees, that the merged entity does not 
make all seats at concerts available for purchase, that the merged 
entity is a monopoly, and/or that the Department of Justice generally 
failed to protect consumers. None of these comments raise any 
substantive issues regarding the efficacy of the relief contained in 
the proposed Final Judgment to remedy the competitive harm to the 
primary ticketing services market alleged in the Amended Complaint.
---------------------------------------------------------------------------

    \72\ These comments are attached Exhibits E through L.
    \73\ LIVE-FI Comment at 1.
    \74\ Id. at 2.
    \75\ Id.
---------------------------------------------------------------------------

V. Conclusion

    After careful consideration of the public comments, the United 
States concludes that entry of the proposed Final Judgment will provide 
an effective and appropriate remedy for the antitrust violations 
alleged in the Amended Complaint and is therefore in the public 
interest. Accordingly, after the comments and this Response are 
published, the United States will move this Court to enter the proposed 
Final Judgment.

    Dated: June 21, 2010.
    Respectfully submitted for plaintiff United States.
Aaron D. Hoag,
Ann Marie Blaylock (DC 967825),
Attorney, U.S. Department of Justice, Antitrust Division, 450 Fifth 
Street, NW., Suite 4000, Washington, DC 20530. Telephone: (202) 514-
5038. Fax: (202) 514-7308. E-mail: [email protected].

In the United States District Court for the District of Columbia

United States of America, et al., Plaintiffs v. Ticketmaster 
Entertainment, Inc. and Live Nation, Inc., Defendants.
Case: 1:10-cv-00139.
Assigned to: Collyer, Rosemary M.

John R. Read, Esquire,
Chief, Litigation III Section, Antitrust Division, United States 
Department of Justice, 450 Fifth Street, NW., Suite 2000, Washington, 
DC 20530.

    It's My Party, Inc. (``I.M.P.''), It's My Amphitheatre, Inc. 
(``I.M.A.''), Seth Hurwitz, Frank Productions, Inc., Sue McLean and 
Associates, Metropolitan Talent, Inc., each of which promotes, and/or 
operates or books venues for, popular music concerts, and the National 
Consumers League \1\ (collectively, the ``Objectors'') herewith object 
to the Proposed Consent Judgment between the plaintiffs in the above-
captioned action and Live Nation, Inc. (``Live Nation'') and 
Ticketmaster Entertainment, Inc. (``Ticketmaster'').
---------------------------------------------------------------------------

    \1\ The National Consumers League (NCL) is part of the coalition 
of consumer groups, independent promoters, ticket sellers and 50 
members of Congress opposing the merger between Ticketmaster and 
Live Nation. Despite our coalition's efforts, the Department of 
Justice went forward in approving the merger. While it joins in 
these objections, the NCL also notes that, as a consumer 
organization, it believes the merger should not have been approved 
and that further concentration of the live performance ticketing 
industry will ultimately prove harmful to consumers, who will see a 
steady rise in the cost of concerts and other live events, an 
increase in vaguely defined fees and charges, which have 
dramatically pushed up the price of tickets over the past decade. 
Indeed, the average price of a ticket to one of the top 100 tours 
soared to $62.57 in 2009 from $25.81 in 1996, according to Pollstar, 
far outpacing inflation. (David Segal, Calling Almost Everyone's 
Tune, N.Y. Times, April 23, 2010.)
    Indeed, since the merger's approval in late January of 2010, 
Live Nation Entertainment, Inc. flexed its dominance. It bid on 
virtually every artist touring in 2010 and the booking agents for 
popular artists, such as Rascal Flatts, Brad Paisley, Iron Maiden, 
311 and Jimmy Buffett, did not even solicit competitive offers for 
this 2010 summer concern season. This conduct has already impacted 
ticket prices and ticket servicing fees. For instance, the top 
ticket price for the Lady Gaga tour has increased by approximately 
133% in the last three months.
    NCL supports efforts to stop this merger because of its 
contribution to the increased concentration of the live event 
industry in the hands of a few powerful forces and the resulting 
decrease in customer services and increase in prices to consumers.
---------------------------------------------------------------------------

Preliminary Statement

    The Department of Justice (``DOJ'') and several state Attorneys 
General (collectively, the ``Government'') have challenged the merger 
of Live Nation and Ticketmaster to form Live Nation Entertainment, Inc. 
(``LNE'') on the grounds that this merger would substantially lessen 
competition in the market for the provision of primary, remote 
ticketing services in the United States. The Government has resolved 
this challenge by agreeing to a Proposed Consent Judgment (the 
``Consent Judgment'') whose principal terms require Ticketmaster to 
grant a perpetual license to its ticketing software and divest its 
entire Paciolan

[[Page 37662]]

business to independent companies. The stated purpose of these 
divestitures is to create two independent firms capable of competing 
with LNE, particularly in the market for the remote, primary sale of 
tickets to what the Government characterizes as major concert venues.
    The Objectors challenge the Consent Judgment because the proposed 
remedial relief will not achieve the stated goal of facilitating 
effective competition with LNE in the primary, remote sale of tickets 
to popular music concerts at major concert venues. The Consent Judgment 
does not take into account LNE's domination of the promotion of popular 
music concerts by major artists and control of venues capable of 
hosting concerts by major artists. The vast majority of all popular 
music concerts by major artists will be promoted by LNE and held at LNE 
controlled venues at which its remote, primary ticketing services will 
be utilized without violating the Consent Judgment. The companies to 
which Ticketmaster's ticketing software and Paciolan business are 
divested will be unable to compete effectively to provide remote, 
primary ticketing services for popular music concerts and LNE will 
remain the dominant competitor in the market. LNE is already exercising 
this market domination to eviscerate the remedial relief imposed under 
the Consent Judgment. The continuation of the merged company's dominant 
position in the market will have significant anticompetitive 
consequences, including continued supra-competitive ticketing services 
fees and charges.
    If the Government remains unwilling to challenge the merger, 
additional remedial measures are necessary. To create meaningful 
competition in the market for remote, primary sales of tickets to 
popular music concerts, LNE should be precluded from: (i) Promoting 
more than seventy-five percent (75%) of major popular music artists' 
tours; (ii) tying or bundling its promotional services and venue 
services; (iii) tying or bundling the appearance of major popular music 
artists at one LNE controlled venue to the artist's appearance in LNE 
controlled venues in different geographic markets; and (iv) retaliating 
against or penalizing any artist who elects to utilize a rival promoter 
or venue during the course of a LNE sponsored national or multi-
appearance tour. LNE should also be required to return at the request 
of any promoter or venue any customer or other competitive information 
Ticketmaster maintained from concerts for which it provided ticketing 
services for the promoter or venue. These remedial measures will 
facilitate the ability of independently owned and operated venues, 
which will likely utilize rival ticketing companies, to compete for the 
artists who drive the live music industry.

Supplemental Market Analysis

A. The Popular Music Concert Industry

    While the Government's Complaint and Competitive Impact Statement 
analyze the live entertainment industry, they focus upon the specific 
market for the remote, primary sale of tickets to music concerts. 
However, the implementation of effective remedial action for the 
anticompetitive effects the Government has recognized will result from 
the Live Nation--Ticketmaster merger requires a deeper analysis of the 
promotional and venue services markets. This analysis establishes that 
Live Nation had far greater pre-merger power in those markets than the 
Government recognizes and that the merger has enhanced LNE's dominance 
in these markets. This market domination will strangle nascent 
competition in the market for remote primary ticketing services.
    The popular music concert industry has its roots in the technical 
innovations that led to the growth of the radio and television industry 
and a consumer mass market for quality recorded music. To drive record 
sales, record companies sponsored concert tours across the country. 
Radio airplay, exposure on nationally broadcast television shows, such 
as American Bandstand and The Ed Sullivan Show, and record sales led to 
nationwide notoriety for highly talented artists performing the genre 
of music in vogue at the time. As artists' popularity grew, they began 
to attract substantial audiences for their live performances.
    The style of music in vogue has evolved over time. In the 1950s, 
popular music was evolving into ``rock n' roll'' (or just ``rock''), a 
blend of rhythm and blues and country music. This musical genre became 
widely popular among teens and young adults in the 1950s. Rock artists 
became so popular that they attracted substantial audiences for their 
live performances and touring provided them with a significant source 
of revenue. As a result, artists began to tour independently of their 
recording companies. For several decades, only rock or folk (as this 
style of music gained wide popularity in the 1960s) qualified as 
popular music when measured by record sales, concert attendance or the 
amount and breath of radio play. Recently, rock music has splintered 
into different genres, including classic (of the style from the 1960s 
through 1970s), ``hard'' (less melodic) and alternative rock, and into 
a general category of ``pop'' (electric guitar and organ and drum 
dominated music). Additionally, country music has spread from its roots 
in the south and southwest of the United States to gain mainstream 
acceptance throughout the country (see, CNNMoney.com, Cashville USA \2\ 
(Ex. ``A'' hereto)), and the hip-hop and rap styles of music developed 
and became popular among teens and preteens. Other styles or genres of 
music, including jazz, blues and gospel, while capable of drawing 
significant numbers of fans, are popular only in one region of the 
country or among a segment of the population, so that they draw mass 
audiences, at most, only in limited areas or for only a few 
performances a year. Similarly, symphony orchestra performances and 
opera appeal to a small segment of the population, require unique 
venues,\3\ and promoters are not usually involved with these events.
---------------------------------------------------------------------------

    \2\ Found at http://money.cnn.com/magazines/fortune/fortune_archive/2007/01/22/8397980/index.htm.
    \3\ As symphonies are generally performed with no or minimal 
amplification, they are generally only conducted at concert halls 
with highly tuned acoustics. Symphony orchestras may perform summer 
concerts at general music venues, usually amphitheatres, but do not 
have a sufficient breath of appeal to draw mass audiences to 
multiple performances and do not appeal to most popular music fans.
---------------------------------------------------------------------------

    As the Government recognizes (Complaint, ]] 15-19), a separate 
defined market developed for what are referred to hereinafter as 
``popular music concerts by major artists'' with ``popular music'' 
defined as that genre of music of broad popularity and ``major 
artists'' defined as those artists performing in a popular music genre 
with sufficient talent to generate a mass audience. Local entrepreneurs 
began to promote concerts, which entailed advertising and marketing the 
concert in their region or city and often assuming the financial risk 
of the concert. As the industry developed, artists engaged a booking 
agent to schedule and route a tour. Booking agents would contact local 
promoters in each city or region in which the artist was considering 
appearing and solicit bids to promote the concert in their area. 
Initially, concerts were held in theatres utilized for plays or other 
such facilities and, as rock and folk artists grew in popularity, 
expanded to indoor sports arenas with seating for up to 30,000 fans 
and, in some instances, in outdoor sports stadiums with seating 
capacities in excess of 60,000 fans. Independent

[[Page 37663]]

companies were formed to provide remote (at locations other than the 
venue hosting the concert) ticket sales.
    As the popular music concert market developed, facilities designed 
and intended for use solely as venues for live popular music concerts 
were constructed throughout the country, primarily in large urban 
areas. The most prevalent type of venue constructed for live popular 
music concerts are outdoor amphitheatres, with a seating capacity 
generally between 8,000 and 25,000 fans spread over designated seating 
areas (usually under cover) and large lawn areas. These facilities have 
become the dominant venues for popular music concerts because, as they 
are constructed to host music concerts, they have good sight lines, 
acoustics (although not to the level of a symphony hall) and staging. 
Conversely, arenas and stadiums are primarily constructed for sporting 
events and are generally not desirable venues in which to view a 
concert.\4\ Amphitheatres also enjoy the advantages that: (a) Fans 
enjoy attending concerts outdoors and mingling in the lawn section 
before and during the concert; (ii) they are more flexible than arenas 
and certainly stadiums in the size of the shows they can handle because 
they are less costly to operate, lawn seating allows amphitheatres to 
approach the seating capacity of indoor sports arenas while fans at 
less popular shows spread out in the lawn areas making the show seem to 
have a larger attendance; and (iii) attendance at amphitheatres tends 
to be higher because fans of limited means can purchase a lawn ticket 
at a reduced price and still obtain a good vantage by arriving early 
and are not locked into undesirable seats.
---------------------------------------------------------------------------

    \4\ An artist might prefer an indoor venue if the performance 
includes a light show or has special stage requirements. This may 
occur only a few times a year.
---------------------------------------------------------------------------

    The artist is the bedrock of the popular music concert industry as 
it is the artist that draws the fans. It is commonly recognized that 
there are less than one hundred artists who can attract an average of 
8,000 to 30,000 fans during a national concert tour. In its World 
Industry Report, Promoters of Performing Arts, Sports and Similar 
Events with Facilities in the U.S., IBISWorld states that, in 2005, the 
top 100 tours comprised 67% of the total domestic concert revenues. LNE 
recognizes the limited number of major artists and has centered its 
entire business model around controlling them. As its Brad Wavra, 
Senior Vice-President of Live Nation's Touring Division, stated: 
``[t]here are only a handful of great artists out there that can do 
10,000; 12,000; 15,000 tickets in 40 cities across the country. 
Everybody knows who they are, they're historic artists, legendary 
artists. So, when they're on a touring cycle, you know, we all want to 
get them to come play for us.'' (Transcript of Artist House Music's 
Interview of Brad Wavra, Ex. ``B'' hereto.)

B. Live Nation Conquerors Popular Music Concerts By Major Artists

    In approximately 1997, SFX Entertainment, Inc. (``SFX'') began 
acquiring local concert promoters to develop a promotional company of 
national scope. For example, SFX acquired Bill Graham Presents, 
Electric Factory Concerts, Fey Concerts, Pace Concerts, Cellar Door and 
the promotional companies of Jules Belkin and Don Law. As it expanded 
nationally, SFX introduced a fundamental change in the market for 
concert promotion by promoting multi-appearance concert tours. Local 
promoters struggled to compete against SFX because it submitted offers 
for the entire tour, which promoters operating in only one city or 
region found difficult to match. At a competitive disadvantage, local 
promoters were unable to survive and became ripe for acquisition.
    In 2000, Clear Channel Communications, Inc. acquired SFX and 
changed the name of the Company to Clear Channel Entertainment. Clear 
Channel Entertainment continued to acquire promoters on the way to 
building a promotional company of national scale and expanded to the 
point that it could promote artists' entire national tours. Clear 
Channel Entertainment also acquired control of concert venues either by 
purchasing them, entering into long term lease relationships or 
executing management and/or exclusive booking agreements. Clear Channel 
Entertainment directed artists that it promoted to appear at venues it 
owned, leased, managed or exclusively booked.
    This business practice placed promoters at an ever increasing 
competitive disadvantage because it was impossible for local promoters 
to bid against national tour offers. As Clear Channel Entertainment 
generally would not allow artists promoted by its competitors to appear 
at its venues, promoters were also denied access to venues at which to 
produce concerts. Independent venue owners and operators were placed at 
a competitive disadvantage as well because they were denied the ability 
to compete to provide venue services to artists Clear Channel 
Entertainment promoted. Facing an insurmountable competitive 
disadvantage, many more promoters and venue owners became ripe for 
acquisition by Clear Channel Entertainment.
    Several antitrust actions were filed against Clear Channel 
Communications and Clear Channel Entertainment claiming that they had 
unlawfully acquired monopoly power in the market for the promotion of 
popular music concerts and engaged in numerous anticompetitive actions 
to maintain and exploit this power. Nobody In Particular Presents Inc 
v. Clear Channel Communications Inc., 311 F. Supp. 2d 1048 (D. Colo. 
2004); In Re Live Concert Litigation, 247 F.R.D. 98 (C.D. Cal. 2007); 
JamSports & Entm't, LLC v. Paradama Prods., 382 F. Supp. 2d 1056 (N.D. 
Ill. 2005). In Nobody in Particular Presents, the Court held that 
plaintiffs had established a genuine issue of material fact in support 
of their claims that Clear Channel had used its monopoly power in the 
market for the broadcast of rock music to force artists to utilize 
Clear Channel Entertainment's promotional services. The Court found 
that plaintiffs had established, at least, a prima facie case that 
Clear Channel refused to advertise concerts promoted by anyone other 
than Clear Channel Entertainment and to provide crucial radio play to 
artists who utilized rival promoters.
    In the wake of these claims, Clear Channel spun Live Nation off 
into a separate, publicly traded company in 2005. At that time, Live 
Nation was the largest promoter of live popular music concerts in the 
United States. Recognizing the central importance of control of the 
artist, Live Nation soon developed a business plan of controlling the 
entire interface between popular music artists and their fans by 
integrating concert promotion, the operation of music concert venues, 
merchandising, sponsorships and ancillary rights. This plan is openly 
discussed in Live Nation internal documents, such as the attached flow 
chart in which Live Nation touts its ``model transformation'' as 
``Branded Vertically Integrated Live.'' (Ex. ``C'' hereto.) In a 
separate document, Live Nation refers to its vertical integration of 
the concert industry as ``Creating the Artist-to-Fan Platform.'' (Ex. 
``D'' hereto.)
    In furtherance of this business plan, Live Nation expanded the 
number of national tours it promotes, offering national tour deals to 
all or substantially all of the highest grossing artists touring in any 
one year. To induce artist participation in these tours, Live Nation 
offered supra competitive shares of the

[[Page 37664]]

concert revenues, at times paying artists more than 100% of the ticket 
sales. It insisted on control of the entire tour and that the artist 
appear only in venues that Live Nation controlled through ownership, 
lease, management or exclusive booking contracts. It was crucial for 
the artists to appear at Live Nation controlled venues not only to 
implement its plan to control the ``artist-to-fan'' platform, but also 
because Live Nation profits only upon concession sales, parking fees 
and merchandising fees. Live Nation's Chief Executive Officer admitted 
while testifying before the Antitrust Sub-Committee of the Senate 
Judiciary Committee that Live Nation loses money on concert promotion 
and profits only through sales at its venues. House Judiciary 
Subcommittee on Courts and Competition Policy Holds Hearing on the 
Proposed Merger Between Ticketmaster and Live Nation, Cong. p. 60 (Feb. 
26, 2009) (statement of Michael Rapino, President and CEO of Live 
Nation Worldwide).\5\
---------------------------------------------------------------------------

    \5\ ``We [Live Nation] do 1,000 concerts at our 50 
amphitheaters. We will lose $70 million at the door. That means the 
price of the talent versus the ticket price. That's 10 million 
tickets being sold. So in theory, if I had any control on those 
ticket prices, you would assume I would charge seven more dollars a 
ticket to cover my $70 million loss. The artist takes the door and 
we end up making the money on the peanut, popcorn, parking and 
ticket rebates.''
---------------------------------------------------------------------------

    To obtain further control over major artists, Live Nation has 
entered into multi-year agreements to manage every aspect of an 
artist's career, capture all revenue streams associated therewith and 
control every market comprising or ancillary to the live music concert 
industry. Acknowledging this strategy, Live Nation Chief Executive 
Officer Michael Rapino stated that Live Nation was ``acquiring more 
rights for a longer time period with locked-in pricing, cross-
collateralized for risk reduction.'' (Live Nation Q1 2008 Earnings Call 
Transcript.) Live Nation has entered into these ``360[deg] degree 
management contracts'' with Madonna, U2, Jay-Z, Nickelback and Shakira. 
As part of these agreements, Live Nation assumes the management of 
artists' careers and controls whatever revenues they generate, locking 
up the artist for a number of years.
    Live Nation continued Clear Channel's acquisition spree, acquiring 
promoters and venues and entering into management and exclusive booking 
arrangements with venues. Notably, when HOB Entertainment, Inc. 
threatened Live Nation's primacy by expanding its House of Blues themed 
dinner and music clubs nationwide and purchasing amphitheatres, Live 
Nation acquired it. It was reported that this acquisition closed many 
of the gaps in Live Nation's national tour routing. Live Nation also 
acquired, entered into long term leases and executed management or 
exclusive booking agreements at numerous amphitheatres, concert halls, 
music theatres and other such venues. (See, MSN.com, PR Newswire, Live 
Nation Continues Top 20 Market Expansion with Agreement to Operate 
Bayfront Amphitheater in Miami, Florida--16th Largest Market in United 
States (Ex. ``E'' hereto).) \6\ LNE presently owns, leases, manages or 
exclusively books 111 venues in the United States, including some of 
the most prestigious, such as The Fillmore in San Francisco and the 
Hollywood Palladium. (See Live Nation 2009 10K.)
---------------------------------------------------------------------------

    \6\ Available at http://news.moneycentral.msn.com/printarticle.aspx?feed=PR&date=2008-812&id=9017679).
---------------------------------------------------------------------------

    Live Nation also expanded its reach internationally by acquiring 
promoters and venues in Europe. On August 21, 2008, Live Nation formed 
a partnership with Corporaci[oacute]n Interamericana de Entretenimiento 
SAB de C.V. (``CIE''), the largest concert promoter in Latin America. 
CIE owns nearly all the major concert halls and arenas in Mexico, and a 
large percentage of those in Brazil and other large South American 
markets. The Wall Street Journal Online reported that this partnership 
gives Live Nation the exclusive right to book world tours into CIE 
venues. See Ethan Smith, Live Nation Reaches Deal with Big Concert 
Promoter, Wall St. J., Aug. 21, 2008, available at http://online.wsj.com. Live Nation's international expansion, particularly its 
relationship with CIE, enhanced its control by affording it the ability 
to promote artists' world tours or using the ability to play CIE venues 
as leverage in negotiating national tours or appearances at Live Nation 
venues in the United States.
    Live Nation now dominates the markets for promoting and providing 
venue services for popular music concerts by major artists. Based upon 
data from Pollstar, which the Government recognizes as a ``leading 
source of concert industry information'' (Competitive Impact Statement, 
p. 4 n.2), Live Nation promoted at least 70% of the live popular music 
concert tickets sold by major artists in the United States in 2008.\7\ 
Based on Live Nation's public disclosures and an analysis of Pollstar 
data, Live Nation controls 40 of the 48 in excess of 15,000 fan 
capacity amphitheatres and has a monopoly of or the only amphitheatre 
in 18 of the largest 25 designated market areas \8\ in the United 
States. There are several areas of the country in which there are no 
popular music promoters other than Live Nation or appropriately sized 
venues other than those controlled by Live Nation.
---------------------------------------------------------------------------

    \7\ This analysis is based upon current information and 
represents Live Nation's minimum share of this market.
    \8\ A designated market area, or DMA, as designated by Nielsen 
Media Research, Inc.
---------------------------------------------------------------------------

    As the Government recognizes, in approximately 2007, Live Nation 
licensed technology to enable it to conduct the remote sale of concert 
and other event tickets. This action threatened Ticketmaster's existing 
dominance in the market for the remote sale of event tickets because, 
as the Government also recognizes, Live Nation had a captive market for 
its remote ticketing services (the venues it controlled) and was better 
positioned to overcome the significant existing barriers to entry into 
this market. Realizing that Live Nation would compete against it in the 
remote sale of event tickets, Ticketmaster laid the foundation to 
compete against Live Nation in the market for the promotion of 
concerts. The obvious plan was to put Ticketmaster in position to 
protect its remote ticketing business by offering integrated services 
(at least artists, historical concert information and ticketing 
services) to artists and venues.
    A significant step in developing this capability was Ticketmaster's 
acquisition of majority control of Front Line Management (``Front 
Line''), one of the largest artist management companies in the country, 
which boasts a staple of marquee artists, ranging in age from Miley 
Cyrus to Willie Nelson. Front Line managed artists also include Van 
Halen, Neil Diamond, Christina Aguilera, Kid Rock, Maroon 5, the Kings 
of Leon, Jimmy Buffett, Aerosmith and Guns-n-Roses. (David Siegel, 
Calling Almost Everyone's Tune, N.Y. Times Reprints, April 23, 2010.) 
Front Line's Chief Executive Officer is Irving Azoff, who is recognized 
as one of the most influential recording artist managers in the world. 
(Id.) Ticketmaster's control of Front Line's artists threatened Live 
Nation because it could deny Live Nation access to a substantial number 
of the less than a hundred artists who could command an audience large 
enough to sell out or fill its amphitheatres and other larger capacity 
venues.
    Within just a few months of this acquisition, Live Nation and 
Ticketmaster agreed to merge. While the Government characterizes this 
merger as a move by Ticketmaster ``to eliminate Live Nation entirely as 
a competitor''

[[Page 37665]]

(Competitive Impact Statement, p. 11), Live Nation, in fact, was the 
dominant party in the merger and it acted to eliminate Ticketmaster (as 
it has eliminated so many previous competitors) as a threat to its 
control of the interface between popular music artists and their fans. 
At the very least, while the merger eliminated a competitor in the 
market for remote ticketing services, it also eliminated a competitor 
in the market for promoting popular music concerts and a potential 
competitor in the market for providing venue services.

Proposed Final Judgment

    On January 25, 2010, the Government filed a civil antitrust 
Complaint seeking to enjoin the proposed merger between Live Nation and 
Ticketmaster because its primary effect would be to ``lessen 
competition substantially for primary ticketing services to major 
concert venues located in the United States.'' (Competitive Impact 
Statement, pp. 1-2.) In support of this claim for relief, the 
Government alleged that Ticketmaster ``dominated primary ticketing, 
including primary ticketing for major concert venues, for over two 
decades.'' (Amended Complaint, ] 21.) The Government contended that, as 
a result of this dominance, Ticketmaster was able to charge consumers 
supra competitive ticketing fees which did not decrease even though 
Ticketmaster's costs were declining as a result of the introduction of 
selling tickets over the Internet. (Id., ] 22.)
    The Government defined the market as the ``provision of primary 
ticketing services to major concert venues'' even though Ticketmaster 
provided remote ticketing services to events other than music concerts 
because the ``set of customers most likely to be affected by the merger 
of Ticketmaster and Live Nation are major concert venues.'' (Amended 
Complaint, ] 37.) It noted that the ``merged firm's promotion and 
artist management businesses provide an additional challenge that small 
ticketing companies will now have to overcome. The ability to use its 
content as an inducement was the point that Live Nation touted as the 
basis on which Live Nation could challenge Ticketmaster in ticketing.'' 
(Id., ] 43.)
    The Government simultaneously filed the Consent Judgment which 
would preclude Live Nation and Ticketmaster from completing their 
merger until they complied with the remedial action specified therein. 
As a general matter, Ticketmaster was required to license the 
Ticketmaster operational software to Anschutz Entertainment Group, Inc. 
(``AEG'') (or another acceptable licensee) and divest Ticketmaster's 
entire Paciolan business to Comcast Spectacor, LP (or another 
acceptable acquirer). The stated purpose of this remedial action is to 
create viable competitors to LNE in the market for providing primary 
remote ticketing services, particularly in providing these services to 
major music venues. The Proposed Consent Judgment also imposes remedial 
measures intended to assist these entities in competing against the 
merged entity. These measures include prohibiting the merged entity 
from retaliating against any venue, such as by refusing to host 
concerts at any venue, that selects another primary remote ticketing 
service.
    However, the Consent Judgment does not address Live Nation's 
ability, as recognized in the Amended Complaint, to drive the use of 
its primary, remote ticketing business through the control of other 
markets. The prohibition of LNE retaliating against concert venues 
utilizing other ticketing services provides no meaningful protection 
because, with the exception of stadiums and arenas that are not 
primarily used as concert venues, Live Nation already directs the 
artists it promotes, and now manages, to the music venues it owns, 
leases, manages or exclusively books. LNE does not have to retaliate 
against anyone to induce those venues to utilize its (Ticketmaster's) 
primary, remote ticketing service. It either controls or already has 
substantial influence over this decision. As Live Nation dominated, and 
LNE has even greater control over, the promotion of popular music 
concerts and venues used for popular music concerts by major artists, 
LNE will dominate the primary remote ticketing services market as well. 
LNE will have no reason to reduce the excessive service fees 
Ticketmaster charged. Indeed, it would appear that LNE will use supra 
competitive ticketing service fees as another source to off-set the 
supra competitive payments it makes to artists.
    The Proposed Consent Judgment does nothing to prohibit this 
conduct. To the contrary, it facilitates this action by expressly 
permitting LNE to bundle its services. For this reason, the remedial 
action the Government has negotiated will not prevent the competitive 
harm it sought to address. In fact, the merged entity has continued to 
direct artists to the venues it controls for the upcoming 2010 season. 
For these reasons, if the Live Nation/Ticketmaster merger is to be 
permitted, additional remedial action must be required.

Argument

A. A Consent Order That Provides for Ineffective Remedial Action Should 
Not Be Approved

    The determination of whether the Consent Judgment should be 
approved will be based on whether it is in the ``public interest.'' 15 
U.S.C. 16(e)(1). In making this assessment, a court may not substitute 
its judgment for the Government's as to the nature or scope of the 
claims brought in the first instance. United States v. Microsoft Corp., 
56 F.3d 1448 (DC Cir. 1995). For this reason, while the Objectors 
believe that the Live Nation and Ticketmaster merger will substantially 
reduce competition in the market for providing promotional and venue 
services to popular music artists, and contend that Live Nation's 
conduct is independently actionable,\9\ they have not addressed these 
issues.
---------------------------------------------------------------------------

    \9\ I.M.P. and I.M.A. have filed a Complaint against Live Nation 
asserting antitrust and State law unfair competition claims. It's My 
Party, Inc. v. Live Nation, Inc., United States District Court for 
the District of Maryland, Northern Division, Civil Action No. 1:09 
Civ. 00547 JFM.
---------------------------------------------------------------------------

    Conversely, the court is not merely a ``judicial rubber stamp[ ]''; 
it is required to make ``an independent determination as to whether or 
not entry of a proposed consent decree is in the public interest.'' 
Id., at 1458 (quoting H.R.REP. NO. 1463, 93d Cong., 2d Sess. 8 (1974), 
and S.REP. NO. 298, 93d Cong. 1st Sess. 5 (1974), reprinted in 1974 
U.S.C.C.A.N. 6535, 6538, 6539.) The independent nature of judicial 
review of a consent judgment is further evidenced in the Senate debate 
of the Tunney Act: ``[The Act] will make our courts an independent 
force rather than a rubber stamp in reviewing consent decrees, and it 
will assure that the courtroom rather than the backroom becomes the 
final arbiter in antitrust enforcement.'' (The Antitrust Procedures and 
Penalties Act of 1974: Hearings on S. 782 and S. 1088 Before the 
Subcomm. on Antitrust and Monopoly of the Senate Comm. on the 
Judiciary, 93d Cong. 1 (1973) (opening remarks of Senator Tunney).) See 
also, United States v. GTE, 603 F. Supp. 730, 740 n.42 (D. D.C. 1984) 
(``([I]n light of the history and purpose of the Tunney Act, it is 
abundantly clear that the courts were not to be mere rubber stamps, 
accepting whatever the parties might present'').
    In making this determination, the Tunney Act provides that the 
Court ``may consider,'' inter alia:

    ``(1) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration

[[Page 37666]]

or relief sought, anticipated effects of alternative remedies actually 
considered, and any other considerations bearing upon the adequacy of 
such judgment * * * ''
15 U.S.C. 16(e). A court should ``hesitate'' in the face of specific 
objections from directly affected third parties before concluding that 
a proposed final judgment is in the public interest. United States v. 
Microsoft Corp., supra, 56 F.3d at 1462. Additionally,

    ``The court should pay ``special attention'' to the clarity of the 
proposed consent decree and to the adequacy of its compliance 
mechanisms in order to assure that the decree is sufficiently precise 
and the compliance mechanisms sufficiently effective to enable the 
court to manage the implementation of the consent decree and resolve 
any subsequent disputes.''

United States v. Thompson Corp., 949 F.Supp. 907, 914 (D. D.C. 1996).
    In Thompson, in response to objections by competitors, the Court 
refused to approve a consent judgment permitting the merger of Thompson 
Corporation and West Publishing unless additional remedial action was 
implemented with respect to West's claim of copyright protection for 
its star pagination system. In so ruling, the Court held the remedial 
actions specified in the proposed consent judgment did not adequately 
address the anticompetitive concerns the government raised in its 
complaint with West's assertion of copyright protection for the star 
pagination system.
    The Court should give serious consideration to the position of the 
Objectors--competitors of Live Nation in both concert promotion and 
venue operation--that the government plaintiffs' proposed remedial 
relief will not address the substantial reduction in competition in the 
market for providing primary ticketing services they have concluded 
will result from the merger of Live Nation and Ticketmaster. Indeed, as 
the Government is still permitted to demand additional remedial action, 
it should give serious consideration to Objections filed by entities 
with substantial knowledge of the relevant markets and in unique 
positions to assess whether anyone will be able to compete effectively 
against Live Nation in the primary remote ticketing market before 
finalizing the Proposed Consent Judgment. A consent judgment that is 
ineffective in remediating the competitive harm the Government sought 
to address is not in the public interest.

B. LNE's Dominance over the Market for Concert Promotion and Venue 
Services Will Strangle Competition in the Market for Primary Remote 
Ticket Sales at Major Music Venues

    Even though it affirmatively alleges that the customers most 
directly affected by the merger are major concert venues, and that 
LNE's promotion and artist management business poses an additional 
challenge that rival ticketing companies will have to overcome, the 
Government provides an, at best, perfunctory analysis of Live Nation's 
pre-merger share of the market for concert promotion and venue 
services. It claims that Live Nation owns or operates 70 major concert 
facilities throughout the United States (Competitive Impact Statement, 
p. 5) and does not examine the extent to which Live Nation's controls 
the available venues in the geographic markets in which it competes. It 
further claims that Live Nation promoted shows represent 33% of the 
concert revenues at major concert venues in 2008.
    However, Live Nation's public disclosures establish that it owns, 
leases, manages or exclusively books at least \10\ 111 music concert 
venues. As is set forth previously, prior to the merger, Live Nation 
had monopoly control of amphitheatres with a more than 15,000 seating 
capacity in the United States and controls the only venue or a monopoly 
of the music venues in 18 of the largest 25 designated market areas. 
Given this dominance of the market, as is recognized by Trent Reznor, 
the lead singer for Nine Inch Nails, artists must deal with Live Nation 
on concert tours:

    \10\ It is unknown whether Live Nation's public disclosures 
identify all venues it exclusively books.
---------------------------------------------------------------------------

    ``NIN [Nine Inch Nails] decides to tour this summer. We arrive 
at the conclusion outdoor amphitheaters are the right venue for this 
outing, for a variety of reasons we've throughly [sic] considered. 
In the past, NIN would sell the shows in each market to local 
promoters, who then `buy' the show from us to sell to you. Live 
Nation happens to own all the amphitheaters and bought most of the 
local promoters--so if you want to play those venues, you're being 
promoted by Live Nation.''

    The footnote provides:

    ``I fully realize by playing those venues we are getting into 
bed with all these guys. I've learned to choose my fights and at 
this point in time it would be logistically too difficult to attempt 
to circumvent the venues/promoter/ticketing infrastructure already 
in place for this type of tour.''

    Moreover, measuring Live Nation's market power in concert promotion 
based on revenue generated from ticket sales from what the Government 
terms major concert venues is inherently flawed as market power should 
be measured in the number of tickets sold. Promoters are typically 
ranked in the industry, as is reflected in Pollstar's rankings, based 
on the number of tickets sold for concerts they promote. Furthermore, 
as with many service providers in this industry, ticketing companies 
are not paid by the entity that engages them (in this case, venues 
owners or operators), but rather they charge concert goers service fees 
per ticket. It accordingly was the consumer that bore the burden of 
Ticketmaster's dominance of the primary remote sale of concert tickets 
through the payment of supra competitive service fees per ticket. As 
the competitive harm is reflected in service fees per ticket, the 
measure of Live Nation's market power should be the percentage of the 
total number of tickets sold.
    Even if the calculation of market power were based on revenues, the 
Government's analysis substantially minimizes Live Nation's pre-merger 
share of the market. Live Nation is in the business of promoting music 
concerts and, once again, the Government recognized that the merger 
will most acutely affect major concert venues. Nevertheless, the 
Government appears to have calculated Live Nation's share of the 
promotional market by comparing the revenues it earned promoting 
concerts to the total revenues of the top 500 highest grossing venues. 
(Competitive Impact Statement, p. 4, n.2.) While the Government does 
not list what it considered to be the top 500 grossing venues, Pollstar 
data establishes that facilities clearly within the top 500 grossing 
venues have reported significant revenue for events that were not music 
concerts. Those events include circuses (both traditional [Ringling 
Brothers and Barnum & Bailey] and Cirque de Soleil style performances), 
plays, ice shows, ballet, opera and performances by comedians, 
magicians, symphony orchestras and the Blue Man Group. (A list of some 
of the events reported in Pollstar is attached hereto and marked Ex. 
``F''.) These events are plainly not music concerts and are not 
substitutes for fans of major popular music artists.
    The events included within the Pollstar data also include 
performances by gospel, jazz, blues and other musicians, which are not 
fairly characterized as popular music and are also not adequate 
substitutes for fans of major popular music artists. The vast majority 
of fans only enjoy specific genres of music as is evidenced, for 
instance, by the segregation of radio stations among music genres. 
Further,

[[Page 37667]]

Billboard magazine ranks songs according to their genre. (See, Ex. 
``G'' hereto.) Fans will generally not attend a concert featuring a 
genre they do not enjoy. For this reason, in Nobody in Particular 
Presents, supra, the court held that the plaintiffs had established a 
triable issue of fact as to whether there was a distinct market for 
rock music and concerts. 311 F.Supp.2d at 1082-83. There is not a 
cross-elasticity of demand between popular music and jazz, blues and 
particularly gospel (that are usually attended only by fans with strong 
religious beliefs), and the option of attending these types of concerts 
will not impede LNE's ability to maintain supra competitive ticketing 
service fees in popular music concerts.
    Moreover, as the Government recognizes (Competitive Impact 
Statement, p. 4 n.2), the top 500 grossing venues include clubs and 
music theatres. These facilities have limited seating capacities. In 
its Annual Report on Form 10K for the year ending December 31, 2008, 
Live Nation recognizes that music theatres typically have a seating 
capacity of between 1,000 and 6,500 and clubs have a seating capacity 
of less than 1,000 fans. With rare exceptions, artists appear at these 
kinds of venues because they do not have sufficient popularity, due 
either to their being a developing act or the genre of music they 
perform, to draw an audience for a larger amphitheatre, arena or 
stadium. Fans not only focus on the style or genre of music, but they 
also have favorite artists within a genre, and will generally not 
attend a concert by an artist they do not enjoy. By definition, artists 
appearing at music theatres and clubs do not have sufficient popularity 
to compete effectively against the substantially more popular artists 
appearing at amphitheatres, arenas and stadiums.
    On the other end of the spectrum, owners of modern arenas and 
stadiums prefer artists whose fan base is sufficiently affluent to pay 
for the expensive tickets to luxury suites. There are only a few select 
performers with sufficient popularity among affluent fans to draw an 
audience large enough for a 25,000 seating capacity arena, let alone a 
60,000 seating capacity stadium, and most well recognized popular music 
artists appear at amphitheatres and other venues specifically designed 
for music concerts with seating capacities of between 8,000 and 30,000 
fans. Based on Pollstar data, there were only five artists that 
appeared in an amphitheatre or other venue used primarily for music 
concerts who also appeared at a typical sports arena during the same 
tour (other than in a festival or multi-artist concert) in 2008.
    Based on this analysis, the proper measure of Live Nation's market 
power in the promotion of music concerts is determined by calculating 
its percentage share of the tickets sold for promoting popular music 
concerts by major artists (with an average attendance of between 8,000 
to 30,000 fans). Based upon Pollstar data, Live Nation was the promoter 
for 70% of the tickets sold within this market in 2008:
[GRAPHIC] [TIFF OMITTED] TN29JN10.019

    Additionally, Live Nation dwarfs other promoters. Its most 
significant competitor is AEG Live, which promoted only 43% of the 
total amount of tickets to the events tracked by Pollstar worldwide 
that Live Nation promoted in 2008 and focuses primarily on arena shows. 
Live Nation's next largest competitor is MSG Entertainment which 
promoted just 7% of the tickets for events tracked by Pollstar 
worldwide that Live Nation promoted in 2008 and is believed to promote 
only at New York's Madison Square Gardens. Simply stated, Live Nation 
dominates the promotion of popular music concerts by major acts, 
particularly those appearing in amphitheatres.
    The evidence is overwhelming that Live Nation funnels the acts it 
promotes to the venues it controls. As set forth previously, Live 
Nation's business model is to control the entire interface between the 
artist and their fans. Live Nation pays artists more than the entire 
amount of the ticket sales, loses money on concert promotion and 
profits only on concession, parking and merchandise sales and, 
therefore, requires artists it promotes to appear at its venues. Once 
again based upon Pollstar data and Live Nation's publicly disclosed 
information, 92% of the concerts it promoted at amphitheatres were held 
at venues owned, leased or managed by Live Nation or at which it has 
exclusive booking arrangements:

[[Page 37668]]

[GRAPHIC] [TIFF OMITTED] TN29JN10.020

    In defending Live Nation's then exclusive booking arrangement with 
the New York State Fair, James Koplik, Chairman of Live Nation's 
Northeast Region, stated that artists on Live Nation promoted national 
tours, who appeared at the New York State Fair, would not have done so 
if Live Nation did not have exclusive booking rights there. (See Jim 
Koplik, Live Nation is Committed to Successful State Fair, available at 
http://blog.syracuse.com (posted August 26, 2008).)
    There are numerous examples of this conduct. In discussing whether 
No Doubt would play Merriweather Post Pavillion during its 2009 Summer 
tour, the act's agent, Mitch Okmin, of M.O.B. Agency, stated that No 
Doubt could not play Merriweather because ``if [it is a] L[ive] 
N[ation] deal, it will be at the bad traffic place.'' (later identified 
as Nissan Pavilion, a Live Nation venue). (Ex. ``H''.) He similarly 
said in discussing the 2010 summer tour that No Doubt cannot play any 
other venue where there is a Live Nation amphitheatre, stating ``if 
[there is a] LN shed we play it.'' (Ex. ``I''.) Marty Diamond of 
Paradigm, expressed similar sentiment, responding that to the extent 
Coldplay enters into a Live Nation tour for the summer of 2009, there 
was no chance ``whatsoever'' that they would be able to play 
Merriweather. (Ex. ``J''.) Rob Beckham, from the William Morris Agency, 
represents Rascal Flatts and Brad Paisley, and similarly advised that 
with respect to ``any hard ticket date, [Live Nation] has the right of 
first refusal. They have never not taken a date.'' As to whether he was 
permitted to book in non-Live Nation venues, Mr. Beckham stated that 
the Live Nation contract is ``exclusive'' and he is only permitted to 
book non-Live Nation venues in ``non competitive markets.'' (Ex. 
``K''.) Mitch Okmin echoed this response, stating that, as a result of 
Live Nation tours, his ``involvement now is markets where there are no 
Live nation sheds.'' (Ex. ``L''.) Even though artists would often 
prefer to appear at independent venues, Live Nation makes it next to 
impossible for them to do so. Indeed, Steve Kaul, of the Agency Group, 
who promotes Nickelback, stated that, although he wanted to book the 
band at Merriweather, he was precluded from doing so by the terms of 
Nickelback's 360 deal with Live Nation. (Ex. ``M''.) Mr. Kaul went on 
to acknowledge that Live Nation behaves like this in order to ``cross 
[collateralize] the dates and protect their profits against some weak 
markets.'' (Ex. ``N''.)
    Live Nation also utilizes its control of the market for venue 
services in one geographic region to compel artists to appear at a Live 
Nation controlled venue in an area where it faces competition. For 
instance, in response to solicitations for 311 to appear at 
Merriweather Post Pavilion during the 2008 concert season, the band's 
booking agent advised that refusing to play Nissan would put the band's 
Virginia Beach appearance at a Live Nation venue at risk. (Ex. ``O''.)
    In those few instances in which an artist nevertheless insists upon 
playing a competing venue, Live Nation requires the competing promoter 
and/or venue operator to pay a tribute in terms of sharing a percentage 
of the profits from this concert with Live Nation. I.M.P. was required 
to pay Live Nation 25% of the entire concert gross in order to promote 
the Warped Tour from 2006 through 2009, Iron Maiden in 2008 and John 
Mayer in 2008. (Exs. ``P'' and ``Q''.) In order for The Fray to play 
Merriweather in 2009, I.M.P. was required to pay Live Nation $3 per 
ticket, because 25% of the concert proceeds were no longer deemed 
sufficient. (Ex. ``R''.) Live Nation also imposes a penalty upon 
artists for playing another venue.
    It cannot reasonably be contended that Live Nation will utilize any 
ticketing service other than its own at the 111 music concert venues it 
controls. This does not violate the Consent Judgment as drafted because 
Live Nation is controlling or has influence over this decision at the 
venues it controls. It does not have to retaliate in order to implement 
its ticketing services for the venues it controls.
    Without access to Live Nation controlled venues, rival ticketing 
companies will not be able to penetrate the market for remote, primary 
ticket sales to music concert venues. As LNE controls the only or a 
monopoly of the venues in numerous markets, including 18 of the 25 
largest designated marketing areas in the country, rival ticketing 
companies will not have access to venues in those markets. Whatever 
minimal market penetration rival ticketing companies achieve will not 
inhibit Live Nation's ability to charge supra competitive ticketing 
service fees. Even where there is a comparable music venue in a 
geographic region in which Live Nation controls a venue, LNE's control 
of the artists will deny a competing facility access to artists of 
sufficient popularity

[[Page 37669]]

to provide a meaningful alternative to artists appearing at the Live 
Nation venue. Fans have a limited amount to spend on concerts, 
generally wish to purchase tickets only to concerts featuring their 
favorite artists and will not usually purchase tickets for concerts by 
artists whose music they do not enjoy. Unless a rival venue can offer a 
slate of concerts by artists of sufficient popularity that fans wish to 
attend as much as the artists appearing at a Live Nation venue, the 
rival cannot provide meaningful competition.
    The impact of Live Nation's market dominance on rival venues' 
ability to attract artists is illustrated by comparing the difference 
in the nature of artists appearing at the Mann Music Center (``Mann'') 
in Philadelphia before and after Live Nation obtained exclusive booking 
rights at the Susquehanna Bank Center, a competing venue located in 
Camden, New Jersey. As illustrated by the attached concert schedule 
(Ex. ``S''), the Mann went from booking highly popular artists, such as 
James Taylor, who generally sold out the facility, to booking acts of 
limited or niche popularity. Further, Metropolitan Talent abandoned its 
booking arrangement at the Marvin Sands-Constellation Brands Performing 
Arts Center (``CMAC'') in upstate New York because it could not attract 
artists in competition with the Darien Lake Performing Arts Center that 
is booked exclusively by Live Nation.
    LNE will be even more dominant than Live Nation. Control of Front 
Line's stable of artists gives LNE the ability to feed those artists to 
its promotional business. As LNE will continue to insist that the 
artists it promotes appear at the venues it controls, uniting Live 
Nation's promotional and Front Line's artist management businesses will 
deny rival venues a meaningful opportunity to compete for an even 
greater percentage of popular artists, and consequently further limit 
rival ticketing services' ability to inhibit the merged entity's 
ability to charge supra competitive service fees. Additionally, 
Ticketmaster has long maintained an extensive customer database that is 
effectively utilized to solicit fans for concerts at venues to which it 
provides ticketing services. As no other ticketing service has such an 
extensive database, the promise of access to it will be a powerful 
inducement for rival venues to utilize the merged entity's ticketing 
services.
    As soon as the Proposed Consent Judgment was filed, LNE flexed its 
muscle. It bid on virtually every artist touring in 2010 and the 
booking agents for popular artists, such as Rascal Flatts, Brad 
Paisley, Iron Maiden, 311 and Jimmy Buffett, did not even solicit 
competitive offers for the upcoming 2010 summer concert season. This 
conduct has already impacted ticket prices and ticket servicing fees. 
For instance, the top ticket price for the Lady Gaga tour has increased 
by approximately 133% in the last three months.

C. The Consent Judgment Should Not Be Adopted without Further Remedial 
Relief

    Competition in the market for the primary remote ticketing of music 
concerts will not be restored to levels where LNE will be unable to 
charge supra competitive service fees unless Live Nation's ability to 
funnel the concerts it promotes to the venues it controls is curtailed. 
While the Objectors believe that Live Nation's tying promotional 
services to artists appearing at Live Nation's venues constitute 
independent violations of the antitrust laws, it is well-established 
that antitrust remedies may prohibit conduct beyond what would 
necessarily violate the antitrust law. United States v. Loew's, 371 
U.S. 38, 53 (1962); X Areeda, Elhauge & Hovenkamp, Antitrust Law 1758, 
at 349 (1996). All that is necessary is that the relief ordered be 
reasonably necessary ``to cure the ill effects of the illegal conduct, 
and assure the public freedom from its continuance, and it necessarily 
must fit the exigencies of the particular case.'' Ford Motor Co. v. 
United States, 405 U.S. 562, 575 (1972).
    The DOJ's Policy Guide to Merger Remedies provides that conduct 
remedies are appropriate where the merged firm must modify its behavior 
for any structural relief that has been ordered to be effective. 
(Antitrust Division Policy Guide to Merger Remedies, p. 18, U.S. 
Department of Justice, Antitrust Division, October 2004.) To render the 
divestiture remedies required by the Consent Order effective, LNE 
should be enjoined from in any manner requiring or inducing artists it 
manages or promotes to appear at venues it controls, insisting (other 
than in circumstances where the merged entity has entered into a 
legitimate co-promotional arrangement) that rival promoters or venue 
owners share any part of the revenue or profits they earn on concerts 
with LNE and/or from in any manner penalizing an artist for using a 
rival promoter or appearing at a competing venue. This remedy will 
assist those remaining venues still competing with LNE to obtain 
artists of the same level of popularity as the artists appearing at 
Live Nation venues, giving consumers in those areas a meaningful choice 
between concert venues--a choice that will limit LNE's ability to 
charge supra competitive service charges because fans will have the 
ability to attend equally desirable concerts in competing venues with 
lower service charges.
    The additional remedial measure of prohibiting the merged entity 
from promoting or hosting more than seventy-five percent of an artist's 
tour should be adopted. This additional remedy is necessary because of 
the subtle, often undetectable, efforts LNE may utilize to persuade or 
pressure Front Line's artists and other artists it promotes to appear 
at the venues it controls. This is a particular concern given Irving 
Azoff's power in the concert industry. Conversely, an objective 
standard is easily policed.
    LNE should also be required to return at the request of any 
promoter or venue owner all data relating to concerts for which 
Ticketmaster provided the ticketing and to delete any such information 
from its electronically stored data and files. This remedy will reduce 
the competitive advantage LNE would otherwise enjoy over rival 
ticketing service companies as a result of its possession of an 
extensive customer database. It will also deny LNE access to 
information provided in confidence to Ticketmaster and with the 
reasonable expectation that a direct competitor would not be given 
access to this information.

Conclusion

    In sum, establishing additional ticketing services capabilities is 
meaningless unless there is someone to whom these services can be 
provided. This will not occur unless LNE's control over the management 
and promotion of major popular music artists, and where they appear, is 
addressed. Otherwise, the vast majority of major popular music artists 
will be promoted by LNE and appear at LNE controlled venues and rival 
remote ticketing providers, much less, rival promoters and venue owners 
or operators, will not be able to compete. Fans will have to pay supra 
competitive ticket prices, service fees, concessions prices, parking 
charges and merchandising fees to attend concerts by their favorite 
artists at LNE venues. A wholly ineffective consent judgment is simply 
not in the public interest. To that end, we suggest the aforementioned 
remedies in order to render the consent judgment effective in the 
manner in which it was intended.
    Dated: May 3, 2010.

Cozen O'Connor,
Robert W. Hayes,
Rachel H. Robbins,

[[Page 37670]]

Abby L. Sacunas,
Attorneys for It's My Amphitheatre, Inc., d/b/a Merriweather Post 
Pavilion and on behalf of Frank Productions, Inc., Sue McLean and 
Associates, Metropolitan Talent, Inc. and the National Consumers 
League.

    Note: The attachments to this comment are available on the 
Antitrust Division's Web site at http://www.justice.gov/atr/cases/ticket.htm.

BILLING CODE C
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BILLING CODE C

[[Page 37694]]

In the United States District Court for the District of Columbia

United States of America et al, Plaintiff v. Ticketmaster 
Entertainment, Inc. 8800 West Sunset Boulevard, West Hollywood, CA 
90069 and Live Nation, Inc., 9348 Civic Center Drive, Beverly Hills, CA 
90210, Defendants.
Case: 1:10-cv-00139.
Assigned to: Collyer, Rosemary M.
Assign. Date: 1/25/2010.
Description: Antitrust.
Date filed: 1/28/2010.

Tunney Act Comments of Jack Orbin, President, Stone City Attractions, 
Inc. on the Proposed Final Judgment in the Ticketmaster/Live Nation 
Merger Matter

    On January 24, 2010 the Antitrust Division of the Department of 
Justice (``DOJ'') filed a complaint and proposed final judgment 
(``PFJ'') with the United States District Court for the District of 
Columbia regarding the merger of Ticketmaster Entertainment, Inc. 
(``Ticketmaster'') and Live Nation, Inc. (``Live Nation''), to create 
the merged company Live Nation Entertainment, Inc. (``LNE''). Without a 
reasonable doubt, the merger of Ticketmaster, the nation's largest 
ticketing company, and Live Nation, by far the nation's largest concert 
promoter, will further damage an already fragile live concert industry 
and should be disallowed. We are submitting these comments on behalf of 
Jack Orbin, founder and president of Stone City Attractions, one of the 
largest and innovative independent concert promoters in the country, to 
document how the PFJ fails to adequately protect competition in the 
live entertainment industry, specifically in the primary ticketing 
market for major concert venues, and to suggest more significant 
remedies that can be used to strengthen the PFJ.\11\
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    \11\ Jack Orbin is the founder and President of Stone City 
Attractions, Inc., a well-respected, family-owned independent 
regional concert promoter. Jack Orbin has promoted and produced 
events in the Southwest for the past 38 years. Over the past 38 
years, Stone City Attractions has promoted nearly every major 
concert act, from pop and rock-n-roll to country and jazz in venues 
of all sizes.
    Jack prides himself in the extent of his community involvement. 
Jack was named one of San Antonio's ``Most Influential Top 100 
Leaders'' in Arts & Entertainment. Additionally, Jack is an active 
member of the San Antonio Alamodome Advisory Sub-Committee, and has 
been awarded their prestigious Humanitarian Award multiple times.
---------------------------------------------------------------------------

    Any assessment of whether the PFJ adequately restores competition 
must begin with these simple facts:
     This proposed merger faced unprecedented opposition from 
consumer groups, Members of the United States Congress, ticket sellers, 
artists, managers, independent concert promoters, and actual consumers 
of live entertainment. The DOJ received over 25,000 direct consumer 
complaints urging the DOJ to block the merger.\12\
---------------------------------------------------------------------------

    \12\ Jason Schreurs, 25,000 Concertgoers Urge U.S. Justice 
Department to Block Ticketmaster/Live Nation Merger, Exclaim News 
(January 20, 2010), available at  http://www.exclaim.ca/articles/generalarticlesynopsfullart.aspx?csid2=844&fid1=43772.
---------------------------------------------------------------------------

     Attached to these comments is a letter from 50 members of 
Congress to AAG Varney opposing the merger. The letter expresses 
concerns that the merger will eliminate the minimal competition in the 
ticketing market, leading to higher prices and less service. 
``Permitting Ticketmaster to merge with its most significant competitor 
effectively abandons any hope for the development of competition in the 
foreseeable future, and it would subject consumers to any exploitation, 
including higher ticket prices and fees, that the newly merged firm 
might wish to make of its monopoly power.'' \13\
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    \13\ Letter to Assistant Attorney General Christine Varney from 
50 members of the U.S. House of Representatives (July 27, 2009). 
Attached hereto as ``Attachment A.''
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     Congressman Bill Pascrell framed concerns of the merger in 
a December 16, 2009 press conference launching the merger opposition 
Web site, Ticketdisaster.org, that featured four members of Congress 
and a coalition of consumer groups, ticket sellers and concert 
promoters: ``This merger represents the greatest and most urgent threat 
to music fans across the country, and if approved will have far-
reaching, long-lasting negative consequences for concert goers and 
nearly everyone involved in the live music business.'' \14\
---------------------------------------------------------------------------

    \14\ Remarks of Congressman Bill Pascrell, Press Conference on 
Ticketmaster and Live Nation merger (December 16, 2009).
---------------------------------------------------------------------------

     The Justice Department decision to accept the PFJ was 
roundly criticized by the leading newspapers. The editorial board of 
the New York Times declared that ``this kind of consolidation embodied 
by Live Nation Entertainment is tremendously worrisome.'' The Times 
raised significant concerns over the vertical aspects of the merger 
noting this merger has created ``Live Nation Entertainment, a 
juggernaut that has it all. It will be tough for a band to tour without 
doing business with the new firm.'' \15\
---------------------------------------------------------------------------

    \15\ Editorial, Music Gets Bigger, N.Y. Times (February 9, 
2010). Attached hereto as ``Attachment B.''
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     The Washington Post called the PFJ ``a terrible 
precedent'' observing that ``the gradual retreat from antitrust 
enforcement over the past 30 years has led corporate executives and 
their lawyers to believe that there is no merger that cannot win 
approval if you're willing to make some relatively minor fixes.'' 
Permitting the vertical integration of the two dominant live 
entertainment companies leaves no doubt that ``a ticket monopolist 
seeking to buy the dominant concert promoter and venue operator * * * 
[will certainly] bundle its services and force more focused competitors 
out of the market.\16\
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    \16\ Steven Pearlstein, Ticketmaster and Live Nation Merger is a 
Raw Deal, The Washington Post (January 29, 2010), available at  
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/28/AR2010012803710.html.
---------------------------------------------------------------------------

     Further, the DOJ's own Competitive Impact Statement 
(``CIS'') provides that ``[t]he proposed transaction would extinguish 
competition between Ticketmaster and Live Nation and thereby eliminate 
the financial benefits* * *enjoyed during the brief period when Live 
Nation was poised to challenge Ticketmaster's dominance;'' diminish 
innovation in primary ticketing services; and ``result in even higher 
barriers to entry and expansion in the market for primary ticketing 
services.'' \17\
---------------------------------------------------------------------------

    \17\ CIS at 11.
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    The theory that the PFJ here, by allowing the largest concert 
promoter (who operates at a major financial loss, to the tune of $800 
million at the announcement of this merger) to combine with what is 
commonly known as the most despised of corporations by the ticket 
buying public, will restore competition in the primary ticket sales and 
concert promotion markets is nonsensical. The reality is that this 
merger further enforces the monopolistic hold of Ticketmaster on the 
live entertainment industry; and this merger will continue to increase 
ticket prices to consumers and continue to drive independent concert 
promoters out of business. AAG Varney stated, after the filing of the 
Complaint, that ``we were prepared to litigate the case, and I told the 
parties that.'' \18\ Yet, the DOJ did not litigate, and instead chose 
to identify a very limited set of competitive concerns in ticketing and 
proposed a limited set of remedies. The prohibitions proposed by the 
DOJ ``will prove difficult to enforce. And there is nothing to stop 
anticompetitive bundling of tour management, concert promotions and 
venues.'' \19\
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    \18\ Aruna Viswanatha, Justice OKs Ticketmaster Live Nation--
With Conditions, Main Justice (January 25, 2010).
    \19\ Editorial, Music Gets Bigger, N.Y. Times (February 9, 
2010).
---------------------------------------------------------------------------

    This merger results in LNE dominating the live entertainment

[[Page 37695]]

industry with over an 80% market share for primary ticketing among 
major concert venues, and controlling 127 major concert venues in the 
United States, including amphitheaters and clubs. In spite of the 
substantial level of concentration resulting from this merger, the DOJ 
chose not to challenge the merger to remedy the impact on the 
independent concert promoters whose businesses will undoubtedly suffer 
as a result, nor to consider the impact to skyrocketing costs to 
consumers. The DOJ's enforcement action is inadequate in several 
respects:
     It fails to secure relief for the consumer by eliminating 
competition of independent concert promoters;
     The relief fails to ensure adequate competition for 
primary ticket sales and for concert promotion, and is insufficient to 
allow entry into these markets;
     It fails to adequately prevent LNE from acquiring customer 
data from independent concert promoters.
    As described herein, the DOJ enforcement action is insufficient to 
address the competitive concerns of the live entertainment industry 
highlighted by the widespread opposition. Because of the enormous 
effects on consumers and competitors that this merger will have, 
combined with the inadequate relief proposed in the PFJ, the DOJ should 
reconsider their position, amend the PFJ as suggested below, reopen the 
matter to fully address the competitive concerns raised by this merger, 
and ultimately block the merger.

No Relief in for Consumers due to the Elimination of Independent 
Concert Promoters

    The fact here is simple: ticket prices have skyrocketed since the 
roll up of concert promoters into Live Nation's predecessors and 
ultimately Live Nation, and the ticketing monopoly created currently by 
Ticketmaster. The consumer has been taken advantage of by these two 
conglomerates. To believe for a moment that the combination of the two 
huge corporations will benefit consumers in better services or lower 
prices is fantasy, at best. Both Ticketmaster and Live Nation are 
beholden to their stockholders and those stockholders demand profits. 
It is safe to assume any savings from the actual integration will be 
swiftly swallowed by the drive for profit by these mega-conglomerates, 
leaving the consumer helpless. The PFJ provides no form of relief in 
terms of lower costs to consumers. In fact, AAG, Christine Varney, has 
said that the hope of the DOJ here is to provide competitive choice for 
venues, but ``whether that'll mean lower prices for fans, we'll see.'' 
\20\
---------------------------------------------------------------------------

    \20\ David Segal, Calling Almost Everyone's Tune, N.Y. Times 
(April 23, 2010).
---------------------------------------------------------------------------

    The promoter principally sets ticket prices and costs have not 
increased relative to the ticket price increases.\21\ This is 
substantially a result of Live Nation overpaying for Artists to ensure 
that other promoters do not have a chance to compete with those 
Artists. Live Nation has ``reinvented'' itself numerous times to try to 
compensate for their disastrous financials. None of these 
reincarnations have been profitable, leading to this desperate act. 
Live Nation is currently being sued in various courtrooms, most of 
which allege anti-competitive practices and/or the inflation of ticket 
prices. Concerts have been used as loss leaders, not only to keep other 
promoters from competing, but requiring Live Nation then to try to make 
up some of those losses through other ancillary revenue streams, 
resulting in falsely inflating prices of merchandise, concessions, and 
parking. This merger then becomes simply Ticketmaster and Live Nation 
trying to complete their respective monopolies, vertically as well as 
horizontally. The rollup of Artist management, ticketing, venues, and 
concert promotion into a powerful monopoly precludes the consumer 
choices, as well as terminating permanently the potential of any 
significant entries, desperately needed, into the live concert 
industry.
---------------------------------------------------------------------------

    \21\ The average price of a ticket to one of the top 100 tours 
jumped to $62.57 in 2009 from $25.81 in 1996, far outpacing 
inflation. Id.
---------------------------------------------------------------------------

    As has been commonplace for decades, the strongest protection the 
consumer has had has been the power to say ``no'' to a ticket purchase. 
The only other protective force has been the fact that a handful of 
independent promoters could provide an alternative--ensuring ticket 
prices and service charges be competitive and reasonable. However, this 
merger, by combining the vertical powers of the industry predominantly 
into the hands of this combined mega-conglomerate, destroys any sense 
of competitive balance provided by the existence of independent 
promoters. The majority of independent promoters will be squeezed from 
being able to compete with the already predatory practices commonplace 
by these two dominant corporations, who post-merger will have even 
greater powers--anticompetitive bundling of Artists, fan clubs, venues, 
ticketing, etc.--incumbent in this merger. Thus, relatively soon after 
the completion of this merger, if permitted, the protection of the 
consumer by the independent promoters will disappear. It is small 
businesses that create the real alternative to the consumer through 
diversity and innovation and this merger dooms that option. 
Unfortunately, the PFJ does little here to protect the important role 
of the independent promoters. The DOJ must consider additional remedies 
to the PFJ to ensure competitive, non predatory pricing, designed to 
protect the consumer.

The PFJ Fails To Ensure Adequate Competition and Actually Enhances 
Barriers to Entry

    The PFJ provides for extremely limited relief that supposedly will 
provide competition to the primary ticket sale and concert promotion 
markets. The limited relief here is insufficient to overcome the 
significant barriers to entry into both primary ticketing sales and 
concert promotion markets. LNE will control over 80% of the primary 
ticketing sales in the United States, yet the PFJ provides only for the 
divestment of Paciolan, a small ticketing platform that has been 
sublicensed to other primary ticket sellers barely representing 4% of 
the market; and for a 5-year ticket technology license to Anchutz 
Entertainment Group, Inc. (``AEG''), who represents about 8% of the 
capacity of U.S. concert venues. As the Washington Post observed 
troublesome here is that ``in order to provide sufficient competition 
to a bigger and more vertically integrated Ticketmaster, the government 
has put itself in the position of playing midwife to two other vertical 
mergers--one involving Anschutz, the other Comcast--making it even more 
difficult for small venues and independent promoters to survive.'' \22\ 
While Comcast may theoretically provide for broader competition and the 
DOJ believes that AEG may be the ``company best positioned'' to compete 
for the sale of primary ticketing,\23\ these remedies are wholly 
inadequate.
---------------------------------------------------------------------------

    \22\ Steven Pearlstein, Ticketmaster and Live Nation Merger is a 
Raw Deal, The Washington Post (January 29, 2010), available at 
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/28/AR2010012803710.html.
    \23\ CIS at 13.
---------------------------------------------------------------------------

    First, the divestment of Paciolan to Comcast fails to secure any 
relief in the primary ticket sales market. Paciolan now is only sub-
licensed by Ticketmaster to roughly 4% of the market for primary 
ticketing. Assuming that the 4% benchmark is maintained under Comcast 
ownership, Paciolan will only be used in another 2% of concert

[[Page 37696]]

venues which Comcast provides ticketing to.
    Second, the merger and the PFJ transform the structure of the 
ticketing and promotion marketplace to effectively require vertical 
integration in order for any firm to effectively participate in the 
market in the future. The merger combines the largest ticketing firm 
with the largest concert promoter. Although the parties may assert that 
vertical integration is efficient, the DOJ appropriately rejected those 
claims.\24\ Yet the DOJ then relied on AEG to attempt to restore 
competition, significantly increasing the level of vertical integration 
in the market. Post-merger if any firm would seek to enter the 
ticketing market in the future, it now will effectively be forced to 
simultaneously enter into concert promotion. Typically the antitrust 
enforcement agencies challenge vertical mergers because they may 
require two-level entry for future entrants; \25\ in this case the PFJ 
causes the anticompetitive effect the DOJ is supposed to try to 
prevent. In this case the PFJ enhances barriers to entry rather than 
reducing them.
---------------------------------------------------------------------------

    \24\ In the Competitive Impact Statement the DOJ noted that a 
``vertically integrated monopoly is less likely to spur innovation 
and efficiency than competition between vertically integrated firms, 
and a vertically integrated monopoly is unlikely to pass the 
benefits of innovation and efficiency onto consumers.'' CIS at 12. 
We respectfully suggest that a vertically integrated duopoly is far 
less likely to spur innovation than several nonintegrated firms.
    \25\ Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ] 
1011, at 196 (rev. ed. 1998) (citing the 1984 Merger Guidelines, 
Sec.  4.211).
---------------------------------------------------------------------------

    Third, we are very skeptical that AEG can fully restore competition 
through the complex limited licensing arrangement with Ticketmaster. 
AEG will be fully beholden and dependent on Ticketmaster. Licensing of 
Ticketmaster's ticketing platform to AEG would be insufficient to 
prevent the destruction of any remaining consumer protections, and any 
competitors, in its wake as well. AEG with 30 concert venues, trails 
far behind with the control of LNE's 127 venues. Moreover, the 
licensing of the ticketing platform still provides LNE with royalties 
based on each ticket sold by AEG, meaning Ticketmaster will have its 
hand in AEG's pot.
    Fourth, even with the relief offered by the PFJ, LNE will still 
control over 80% of the primary ticketing and control most of the major 
concert venues in the United States, resulting in significant barriers 
to entry into these markets. Independent promoters will have to compete 
to book shows in LNE owned venues. And Independent promoters will most 
likely be forced to continue to utilize Ticketmaster for the majority 
of their shows (allowing Ticketmaster to keep its hands inside the 
promoters' pockets.) Moreover, with LNE possessing majority control of 
venues, coupled with Ticketmaster's ownership of Front Line Management, 
the barriers to entry are significant, and will become more significant 
post-merger. Moreover, the fact that the next largest competitors to 
Ticketmaster and Live Nation only represent roughly 4% of primary 
ticket sales and 8% of major concert venues is telling of the dominance 
LNE will have, and of the considerable barriers that will exist post-
merger.
    This merger dooms any real diversity in the live concert industry. 
As the Editorial Board of the New York Times warned: ``Live Nation 
could easily shut out independent promoters--who don't have their own 
venues and ticket services. This could reduce diversity in the music 
market. The cost savings that are supposed to flow from these mergers 
never seem to accrue to consumers because the mergers leave so little 
competition.'' \26\ That is why the PFJ should be rejected.
---------------------------------------------------------------------------

    \26\ Editorial, Music Gets Bigger, N.Y. Times (February 9, 
2010).
---------------------------------------------------------------------------

D. The PFJ Fails To Provide an Adequate Firewall

    The PFJ attempts to limit the anticompetitive effects of the merger 
by imposing certain behavioral restrictions on LNE. Even though both 
Ticketmaster and LiveNation have been the subject of several antitrust 
and consumer protection lawsuits, the PFJ imposes extremely modest 
restrictions at best. Ticketmaster, after all, is no model corporate 
citizen--during the pendency of this merger it settled Federal Trade 
Commission charges that it engaged in fraud and deception in the sales 
of tickets for Bruce Springsteen concerts.\27\ If Ticketmaster would 
engage in such brazen law violations during the pendency of a 
government merger investigation, certainly the most significant and 
iron-clad behavioral restrictions must be imposed to prevent any 
violations of the PFJ.
---------------------------------------------------------------------------

    \27\ See Stipulated Final Judgment and Order for Permanent 
Injunction and Other Equitable Relief, Federal Trade Comm'n v. 
Ticketmaster et al, Case No. 1:10-cv-01093 (N.D. Ill. February 18, 
2010).
---------------------------------------------------------------------------

    Yet the PFJ does not do that. It recognizes the importance of the 
confidential information of independent concert promoters, but imposes 
an extremely limited two-paragraph firewall--one far less significant 
than that used by the other federal antitrust enforcer--the Federal 
Trade Commission.
    Customer data is the lifeblood of the concert promotion business. 
Concert promoters attract customers by producing more innovative and 
creative shows, promoting new artists, offering reasonable ticket 
prices, and knowing the tastes and interests of their community. Each 
independent concert promoter's list of customers is one of its most 
crucial assets. When an independent concert promoter puts on a show, he 
is able to collect customer information, including e-mail addresses, 
through ticket sales. This information is important for the purposes of 
advertising and gaining repeat customers.
    By permitting this merger, the independent promoters are forced to 
contract for primary ticketing services via its largest concert 
promotion rival, LNE. LNE will have the incentive and ability to 
quickly exploit the information to dampen competition in both promotion 
and ticketing. LiveNation has used information in this fashion in the 
past. Vertical mergers of this sort often raise the concerns that by 
the merging parties having access to competitors' data, there is the 
potential for discrimination against competitors, or worse, exclusion 
of competitors from the market.
    The PFJ attempts to create a firewall provision to prevent LNE from 
obtaining the ticketing data of its competitors and using this data in 
its non-ticketing businesses (concert promotion and ancillary 
services). As the Competitive Impact Statement notes, the PFJ seeks to 
protect competition among promoters and artist managers ``by requiring 
that Defendants either refrain from using certain ticketing data in 
their non-ticketing businesses or provide that data to other promoters 
and artist managers.'' \28\ Yet, the PFJ seeks to limit misuse through 
a bare bones, two-paragraph firewall provision. To the detriment of 
independent concert promoters, this PFJ provision still permits a broad 
sharing of information among higher-level employees, including ``any 
senior corporate officer, director or manager.'' \29\ Additionally, the 
provision seems to lack any mechanism of policing this firewall. 
Moreover, the firewall does not adequately protect the independent 
concert promoters. These firewall provisions will not work as planned, 
especially for a firm like Ticketmaster that has such overwhelming 
vertical control and such a poor record of corporate compliance.
---------------------------------------------------------------------------

    \28\ CIS at 17.
    \29\ Proposed Final Judgment at 4, 20.

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[[Page 37697]]

    The inadequacy of the PFJ is clear when it is compared to the 
approach of the Federal Trade Commission (``FTC'') in implementing a 
much stronger firewall in a vertical merger (see In the Matter of 
PepsiCo, Inc. (FTC File No. 091 0133, February 26, 2010)).\30\ Pepsi 
acquired its two largest bottlers Pepsi Bottling Group and Pepsi 
Americas. Pepsi bottlers also distribute for PepsiCo's competitor, Dr. 
Pepper and Snapple Group (DPSG). This is a merger with similar vertical 
concerns to the Ticketmaster/Live Nation merger, in which the sharing 
of competitive information could be detrimental to competition. In a 
14-page Consent Order the FTC lays out specific firewall provisions 
designed to prevent acquisition and misuse of confidential information 
and monitor, when necessary, the use of competitive information by the 
merged firm.
---------------------------------------------------------------------------

    \30\ FTC Consent Order attached hereto as ``Attachment C.''
---------------------------------------------------------------------------

     The FTC Order imposes a Monitor Trustee to monitor 
compliance with the order and the order is explicit that the Trustee is 
a fiduciary of the Commission.
     Additionally, The Monitor has full audit rights and is 
paid for by Pepsi. The Monitor is effectively an employee of the FTC.
     The Order designates a very limited set of Pepsi employees 
(the parent company) who can have access to the bottling information.
     The Order narrowly defines the type of information that 
Pepsi (the parent company) can have access to and narrowly defines the 
permissible use of the information it is allowed access to.
     The Order requires reorganization of personnel in both 
Pepsi and the bottling companies to comply with the Order.
     The Order requires Pepsi, within a certain time frame, to 
develop internal procedures to comply with the Order.
    Of course, anyone can recognize that Dr. Pepper and Snapple Group 
has far more power and resources to protect itself from anticompetitive 
conduct than the small independent concert promoters or venue owners 
the PFJ seeks to protect.
    The DOJ should reconsider the PFJ, and short of blocking the 
merger, should adopt additional mechanisms to strengthen the firewall 
provisions, similar to the FTC. For example, a Monitor Trustee, being a 
neutral third-party or a fiduciary of the Division, should be required 
to monitor compliance with the order; and to ensure compliance, provide 
the Monitor Trustee with full audit rights. Additionally, the DOJ 
should narrowly define the type of information that the non-ticketing 
businesses of LNE can have access to, and narrowly define the 
permissible use of the information. Finally, the DOJ should require LNE 
to develop internal procedures to comply with the order. The addition 
of such enforcement mechanisms will help strengthen what is an 
otherwise inadequate PFJ.
1. Conclusion
    After an 11-month investigation of a merger which creates a 
dominant firm in the broken ticketing market, posing an unprecedented 
level of concern by consumers and competitors, the DOJ chose 
insufficient remedies to protect consumers and independent concert 
promoters. The remedies are inadequate to resolve the competitive 
concerns and the PFJ actually enhances barriers to entry. Moreover, the 
PFJ fails to adequately provide an effective firewall provision, which 
is the only provision to protect independent concert promoters and 
their customer base from the predatory practices of Ticketmaster and 
Live Nation.
    It is a favorite phrasing of Live Nation and Ticketmaster 
executives to say the music industry is ``broke.'' There is no doubt 
about that; however, it is these companies that have broken it. To 
solidify their market power makes no sense. As Congressman Pascrell 
declared ``[t]here is little doubt that the result of this merger will 
be higher ticket prices, higher fees and chilling effects on consumers, 
business managers, artists, music fans, promoters in every state around 
the country.'' \31\
---------------------------------------------------------------------------

    \31\ Remarks of Congressman Bill Pascrell, Press Conference on 
Ticketmaster and Live Nation merger (December 16, 2009).
---------------------------------------------------------------------------

    The PFJ should be rejected and the merger blocked. In the 
alternative, we strongly urge the DOJ to amend the PFJ with additional 
remedies to address these competitive concerns.

Date: May 3, 2010.

Respectfully submitted.

David A. Balto, Law Offices of David A. Balto, 1350 I Street, NW., 
Suite 850, Washington, DC 20005. Tel: 202-789-5424. Fax: 202-589-1819.
BILLING CODE P

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BILLING CODE C
From: Gary T.

To: ATR-Antitrust--Internet

Cc:

Subject: For Ms. Christine Varney

Sent: Tue 4/13/2010 12:52 PM

Ms. Varney:

    As you are quoted in the below article--``Generally when you see 
robust competition, you see prices coming down,'' Varney told 
reporters. ``This is the right result.'', I am writing you.
    On April 1st, 2010 I drive 40 miles to downtown Houston, TX where 
the box office of Houston's House of Blues is located in order to 
purchase tickets for a concert. While I had business in downtown 
Houston, I specifically drove to the aforementioned House of Blues to 
purchase the tickets so that I would NOT have to pay all the surcharges 
that Ticketmaster/Live Nation charge.
    Since the Justice Department allowed the Ticketmaster and Live 
Nation merger to occur, as it pertains to House of Blues venues (and 
about another 120 venues): they own the venue, produce the concert and 
ARE THE ONLY WAY to purchase tickets directly (I.E. Not having to go 
through a ticket reseller [which is just another name for legalized 
scalping]).
    What occurred:
    The tickets were purchased at the box office. To my surprise, and 
AFTER my credit card was charged, I saw that I was charged a $3 
``convenience charge'' for EACH $18 ticket (and NOT told there was such 
a charge until AFTER the tickets were purchased). The $3 per

[[Page 37704]]

ticket convenience charge was approximately an additional 17% charge to 
the cost of the ticket. I was then advised that since the tickets had 
already been charged to my credit card and printed, there was nothing 
that the sales person could do at the box office and that I was stuck 
with the tickets. Had I known in ADVANCE OF MY CREDIT CARD BEING 
CHARGED that I was going to get charged a convenience charge for each 
ticket, I never would have made the purchase.
    I contacted Ticketmaster about the charges and their response was--
(and the entire email is at the bottom of this email)

From: Ticketmaster Customer Support <[email protected]>

Reply-To: Ticketmaster Customer Support 
<[email protected]>

Date: Sat, 10 Apr 2010 08:31:32-0400 (EDT)

To: ``Gary T.

    * * * ``There is typically no convenience charge when you drive to 
a box office to purchase tickets.''
    Yet, did Ticketmaster credit my credit card for the convenience 
charges since I purchased the tickets at the box office? No.
    To sum the situation up:
    1. Prior to the Ticketmaster and Live Nation merger--there were no 
convenience charges for purchasing the tickets at the box office where 
the event was occurring.
    2. Post-merger: Customers are charged convenience charges on 
tickets purchased at the box office where the event is occurring.
    I see the aforementioned charges as a blatant abuse of monopolistic 
power.

Gary T. Johnson

Houston, TX

Ticketmaster, Live Nation Merger Approved: Will It Lead To Lower Ticket 
Prices?

RYAN NAKASHIMA [bond] 01/25/10 08:03 PM [bond] AP
    LOS ANGELES --Concert promoter Live Nation and ticket-seller 
Ticketmaster consummated their merger on Monday after the U.S. Justice 
Department approved it with conditions meant to lower ticket prices for 
consumers.
    Shares in both companies rallied by about 15 percent in trading 
Monday, showing that investors approved of how the Obama administration 
handled its first big merger with its appointee Christine Varney as 
assistant attorney general.
    Regulators required Ticketmaster to license its ticketing software 
to a competitor and sell a subsidiary that handles tens of millions of 
tickets a year.
    That is meant to strengthen the companies that will compete for 
ticketing contracts and concert promotion work with Live Nation 
Entertainment Inc., the new company formed by the merger of Live Nation 
Inc. and Ticketmaster Entertainment Inc.
    ``Generally when you see robust competition, you see prices coming 
down,'' Varney told reporters. ``This is the right result.''
    Consumer groups, ticket resellers and some politicians had 
expressed concerns that the combined company would control too much of 
the concert experience. Varney said the original proposal for the 
merger would have been ``anticompetitive.''
    Both companies agreed to the conditions, but a federal court in 
Washington still has to approve it. Canadian regulators and 17 state 
attorneys general also signed on to the deal.
    The combined company will handle all aspects of the concert 
business, including promoting them, selling tickets, beer and parking, 
putting out albums and managing an artist roster that includes U2, 
Madonna, Jay-Z and the Eagles. Its operations span more than 30 
countries. The companies said music fans will benefit through lower 
ticket prices because the merged company can earn money in ways that 
separate companies could not.
    Michael Rapino, CEO of Live Nation and the merged company, said the 
merger creates ``a more diversified company with a great selling 
platform for artists and a stronger financial profile that will drive 
improved shareholder value over the long term.'' Story continues below
    Under the Justice Department rules, Ticketmaster must license its 
software for five years to Anschutz Entertainment Group Inc., which 
owns the Staples Center and other venues. It was also directed to sell 
subsidiary Paciolan to Comcast-Spectator, a subsidiary of Comcast Corp.
    But consumers might not notice the difference right away, partly 
because the merger agreement preserves long-term exclusive ticketing 
contracts with venues.
    AEG and Comcast-Spectacor could take years to effectively take 
ticketing deals away from Ticketmaster, Gabelli & Co. analyst Brett 
Harriss said. Only then would ticket fees start to come down, Harriss 
said.
    Varney said about 20 percent of Ticketmaster's deals with venues 
will expire in 2010. Previously the vast majority of Ticketmaster 
clients renewed their deals upon expiration.
    Some vocal opponents continued their attack. Rep. Bill Pascrell 
Jr., D-N.J., said the ruling did not address the resale market that led 
to consumers paying inflated prices for a Bruce Springsteen concert 
last February.
    It also did not affect the vertical integration the companies 
proposed--although Varney said her department would monitor the 
companies for 10 years to prevent anticompetitive bundling of services.
    Don Vaccaro, chief executive of ticket resale site TicketNetwork, 
said having three strong players was better than just one, but it still 
left small ticket retailers at a disadvantage, especially for VIP 
seating packages that artists sometimes release through their concert 
promoters.
    ``They created a lot of little monopolies on tickets at venues,'' 
Vaccaro said. ``It could have gone further.''
    Under the deal, the merged entity will be under a 10-year court 
order prohibiting it from retaliating against venues that choose to 
sign ticket-selling contracts with competitors. It also must allow 
venues that sign deals elsewhere to take consumer ticketing data with 
them.
    Live Nation, which is based in Los Angeles, and Ticketmaster, which 
has headquarters nearby in West Hollywood, have said the merger will 
streamline their operations, allowing them to save $40 million a year. 
It reversed a schism that happened in 2009, when Live Nation let its 
ticketing deal with Ticketmaster expire and instead sold tickets to its 
own venues with the help of German company CTS Eventim AG.
    The merger closed on Monday, with Ticketmaster stockholders 
receiving about 1.474 Live Nation shares for every Ticketmaster share 
they own. Ticketmaster shares stopped trading at the end of the day.
    Ticketmaster shares rose $2.10, or 15.8 percent, to close at $15.40 
while Live Nation shares closed up $1.35, or 14.7 percent, at $10.51. 
The merged company now has a market capitalization of about $889 
million.
    Both Comcast-Spectacor and AEG hailed the ruling as an opportunity 
to expand their businesses.
    Comcast-Spectacor, which owns the Philadelphia Flyers, Philadelphia 
76ers and two arenas, said it would add Paciolan's 200 ticketing 
accounts and complement its capabilities as a venue manager, food and 
beverage seller and seller of venue-naming rights.
    AEG Chief Executive Timothy Leiweke said his company has a

[[Page 37705]]

commitment from Ticketmaster to run ticket-selling operations under the 
brands of AEG and its clients starting immediately if AEG wants, and 
running for five years. He said AEG will ``aggressively explore'' 
alternative ticketing platforms in the coming years. AEG can choose to 
keep Ticketmaster's technology or develop a separate system by itself 
or with partners.

From: Ticketmaster Customer Support <[email protected]>

Reply-To: Ticketmaster Customer Support 
<[email protected]>

Date: Sat, 10 Apr 2010 08:31:32-0400 (EDT)

To: ``Gary T.

Subject: To Irving Azoff and the Ticketmaster/Live Nation management: I 
purchased tick * * *

[Incident: 100410-000351]

Thank you for allowing us to be of service to you.

Subject

    To Irving Azoff and the Ticketmaster/Live Nation management: I 
purchased tick* * *

Discussion Thread

(Somer--ZYS774)04/10/2010 08:31 AM EDT
Dear Gary,

    Thank you for your e-mail. The convenience charge covers costs that 
allow Ticketmaster to provide the widest range of available tickets 
while giving you multiple ways to purchase. Tickets are available in 
many neighborhoods via local ticket outlet locations, our local charge-
by-phone network and online at Ticketmaster.com. Tickets can be 
purchased through at least one distribution channel virtually 24 hours 
a day. The convenience charge varies by event and is determined by 
negotiations with arena operators, promoters and others based on costs 
for each event.
    Also, the convenience charge will vary depending upon where you 
purchase the tickets. There is typically no convenience charge when you 
drive to a box office to purchase tickets. A convenience charge is 
applied when you purchase from the Internet, phone or ticket outlet 
(e.g., at your local department store) and this charge may vary 
depending upon Ticketmaster's local agreements with the venues, 
promoters and outlet partners.
    Thank you for using Ticketmaster, where we continually strive to 
provide World Class Service to every customer, every day! We really 
appreciate your business, and hope we were able to resolve any problems 
or answer any questions you had. Please reply to this email if we may 
be of further assistance.
Sincerely,

Somer--ZYS774

From: Tom Kuhr

To: ATR-Antitrust--Internet; Varney, Christine

Cc:

Subject: Ticketmaster

Sent: Tue 1/26/2010 3:31 PM

Dear Ms. Varney,

    It's absolutely unconscionable of you to let an already 
monopolistic Ticketmaster acquire even more power to shut out 
competition. I don't know what kind of nonsense they told you about how 
they play or will play nice with others during your investigation, but 
it's clear that they dominate their market by a huge margin and will 
continue to shut out any competition with lockups on more venues.
    This is the worst decision for consumers in years. The ticket fees 
that are already too high will continue to rise, and the new combined 
monster of an organization with a stranglehold on both artists and 
venues will make cable companies look like charities in comparison.
    You made a bad decision this week in the name of corporate growth.
--Tom

Tom Kuhr

Hermosa Beach, California

From: Don Crepeau

To: ATR-Antitrust--Internet

Cc:

Subject: Ticketmaster Live Nation decision.

Sent: Tue 1/26/2010 3:07 PM

    I want to thank you for making it near imposable for me to be able 
to afford tickets to the concerts of my favorite musicians.
    Now that you have insured that the ticket prices will be too high 
for me to afford I can concentrate on other things important to me. 
Like helping the Republican Party remove the Democrats from office and 
maybe causing you to loose your jobs.

Don Crepeau

From: Jason Keenan

To: ATR-OPS Citizen Complaint Center

Cc:

Subject: ticketmaster/live nation merger

Sent: Tue 2/9/2010 8:30 AM

    Please reconsider your decision, as a professional musician and 
lifelong fan of live music, I urge you to reverse this decision. As an 
American, and a believer in the Constitution and Equality of 
Opportunity, I simply cannot fathom how you could allow this to happen. 
Thank you, Jason Keenan

From: Chris Cantz

To: ATR-ISSG--Web Master

Cc:

Subject: Ticketmaster/Live Nation Merger

Sent: Tue 1/26/2010 12:47 AM

    Attention Mr. Webmaster. Could you please ask Ms. Varney what she 
was smoking when she said that this merger would be beneficial and 
innovative to the public as I would like to order some of it. I'm not 
sure how someone in her position isn't aware of the definition of a 
monopoly and it's damage to the people our government is meant to 
represent. Does she really believe the already exorbitant service 
charges will go down now that there is no competition? Once again we 
the people get the shaft from the government and the rich corporations 
with deep pockets will continue to get richer. Thanks for nothing Ms. 
Varney (Other than increased service charges)

From: joseph carlson

To: Hoag, Aaron

Cc:

Subject: TUNNEY ACT COMMENTS RE: case 1:10-cv-00139 usa vs Tmaster

Sent: Tue 1/26/2010 11:47 AM

Mr. Hoag,

    I believe the Justice Department made a huge mistake by allowing 
the LN TM merger as indicated by the seats made available for their 
first big onsale since the merger was approved. This week James Taylor 
went onsale for many US cities and Livenation-Ticketmaster OFFERED NO 
SEATS ON THE FLOOR FOR ANY OF THE SHOWS!!!!! Furthermore the entire 
lower bowl for each venue had less then 40 seats available for the 
public onsale. This means they kept well over 4 thousand of the best 
seats to scalp for themselves for all of the shows. By allowing this 
merger you have made it impossible for the average fan to get good 
seats for most concerts that go onsale in America. As government 
officials I believe that it is important for you to look out for the 
average American not BIG CORPORATIONS!!! You should have never allowed 
this merger without mandating TM-LV to offer at least 5% of the seats 
for ALL sections of a given venue at the time of an onsale.
    The conditions set forth by the merger offered NOTHING to protect 
the consumers! Please call me at ***-***-**** for suggestions on 
conditions that the DOJ should've made when approving this merger.


[[Page 37706]]


Sincerely,

Joe Carlson

From: Kenneth de Anda

To: ATR-OPS Citizen Complaint Center

Cc:

Subject: YOU have FAILED to protect us yet again

Sent: Mon 1/25/2010 5:23 PM

To Whom It May Concern:

By allowing the Live Nation/Ticketmater merger to go ahead, you have 
failed to protect the American consumer. The very people with whom you 
are in charge of the task of protecting from large corporations. It is 
a very sad day for concert goers and consumers. Once again corporations 
have succeeded in blinding politicians with money and false hope for 
consumers. I am very saddened that this merger has occurred and hope 
for the day when the American consumer will once again be protected by 
the very government.agencies that were set up to protect them.

Sincerely,

Kenneth de Anda
[FR Doc. 2010-15686 Filed 6-28-10; 8:45 am]
BILLING CODE P