As the music world continues to await the Justice Department's yea or nay on the merger of Ticketmaster and Live Nation, Billboard reports another interesting development out of the nation's capital: Seth Hurwitz and his Maryland-based company It's My Party have filed an 11-count lawsuit seeking to block the merger and charging that Live Nation "deliberately" and "unlawfully" acquired monopolistic power over the national concert scene.
The lawsuit also alleges that Live Nation has used its influence to "coerce" artists from only appearing at amphitheaters and other venues that the mega-company controls.
I.M.P. ranks beside Chicago's Jam Productions as one of the few remaining vital and vibrant indie promoters in the U.S.-- it books D.C.'s vaunted 9:30 Club as well as the area amphitheatre, the Merriweather Post Pavilion--and Hurwitz testified along with Jam's Jerry Mickelson at the Senate hearing on the merger earlier this year.
In other news, Ticketmaster chief Irving Azoff, who would play a major role in the merged corporation, has refused to speak to the Chicago Sun-Times, but he has talked to Kara Swisher of All Things Digital--not that he's said a heck of a lot. Hitsville critiques the interview and notes some of the questions left unanswered here.
Continuing to ride the wave of popular support that greeted his outrage at Ticketmaster over sales of tickets for the upcoming Bruce Springsteen tour, Sen. Charles Schumer (D-N.Y.) is proposing legislation to crack down on the secondary ticket market/insidious scalping machine and improve fans' chances of buying a list-price seat to major shows.
Billboard magazine reports that the law would impose a two-day waiting period after ticket on-sales before resellers can list those seats at exorbitantly jacked-up prices on the Web. The scalpers... er, resellers... also would have to secure a registration number from the Federal Trade Commission and post it on brokerage Web sites along with seats they're trying to sell.
According to Billboard, Schumer¹s legislation will be introduced when the Senate reconvenes later this month. Yet while the law would seem to be a step in the right direction, something must be wrong with it, since Ticketmaster is supporting it.
"I am very happy to support Sen. Schumer's thoughtful proposal and leadership on this issue," Ticketmaster CEO Irving Azoff told Billboard. "Ticketmaster recognizes that the ticket resale industry needs far-reaching changes to better protect consumers and ensure fair access to tickets. Staggering the resale process to commence 48 hours after a (sale) is a very important step in reforming the process and bringing transparency to the (sale) process."
Ticketmaster no doubt would love to see secondary market sites such as StubHub and Craig's List out of the game... but only so it could corner the resale market with its own secondary site, TicketsNow.
(P.S. -- A few words about the word "scalping": No offense intended to Native American readers; as a student of history, I am well aware that the nasty act actually began in Europe and that the original residents of this fine land learned it from immigrant settlers, explorers and soldiers. In fact, some historians say the practice can be dated back to that bastion of higher civilization, ancient Greece. But alas, there are no images of Greek scalping anywhere on the Web.)
Though SXSW organizers are well aware that the proposed Ticketmaster/Live Nation merger is the biggest music story of the year--if not the biggest to break during the history of the conference--there is nothing on the four-day schedule of panels and seminars at the Austin Convention Center addressing its implications. But that's not for lack of trying.
Panel organizers worked hard to arrange a public interview with Ticketmaster chief Irving Azoff, but Azoff declined. The company also passed on sending any other representatives to speak publicly at SXSW, as did Live Nation.
In their arguments on Capitol Hill, Azoff and Live Nation boss Michael Rapino both repeated that the merger would help up-and-coming artists--indeed, that it was essential for securing their future in these turbulent economic times. SXSW is the largest annual gathering of developing artists in America.
The mega-corporations' lack of a public presence speaks volumes.
During a brief audience with Bono following U2's radio promo event at Metro Tuesday night, I had the opportunity to ask the singer one question about the single most important story in music today: the proposed merger between the controversial ticket broker Ticketmaster and the huge national concert promoter Live Nation.
Last year, U2 hopped into bed with Live Nation in a big way, signing a 12-year global contract allowing the American promoter to handle all merchandising, digital and branding rights as well as touring for the Irish band. And on its last tour, U2 faced significant criticism from fans--including one who questioned the band during the promo event--who were angry about Ticketmaster's handling of the specially-priced fan club tickets, an inordinate number of which seemed to wind up in the hands of scalpers.
Surprisingly, given the facts that the band is gearing up to work with these two companies for what is expected to be one of the top-grossing tours of 2009; that U2 made $25 million from selling its stock in Live Nation in December, and that the merger was the subject of two recent hearings on Capitol Hill as well as an ongoing investigation by the Justice Department, Bono said he had no opinion on the mega-merger.
Billy Corgan declined to give the letter to the Sun-Times, and a spokesman for Sen. Herb Kohl, chairman of the Committee on Antitrust, Competition Policy and Consumer Rights, said that as of Monday evening, his office has yet to receive the elusive missive.
Thankfully, Ticketmaster has finally provided a copy of Corgan's letter endorsing its merger with giant concert promoter Live Nation. The full text follows.
Dear Chairmen Kohl & Leahy and Ranking Members Hatch & Specter:
The merger as proposed before you on the surface may seem to be too much power in the hands of the few, and I can understand the need for Congress to review this matter. Here I would hope that my 20 years in the recording and touring business will allow me some candid authority on these issues, and would help shed some light for you on some of the nuances that perhaps could easily get missed.
The 'system' that was once the modern record business, essentially ushered in with the meteoric rise of the Beatles, is now helplessly broken. And by almost every account available cannot be repaired. Personally I would add to that a healthy 'good riddance,' as the old system far too often took advantage of the artists as pawns while the power brokers colluded behind the scenes to control the existing markets. This control often saw the sacrificing of great careers to maintain that control. Look no further than the major record labels' intense fight to slow down the progress of Internet technologies that more readily brought music and video to the consumer because they couldn't completely control it. This disastrous decision on their part has destroyed the economic base of the recording industry. It is now a shadow of its former self.
Artists now find a heavy shift of emphasis to the live performance side, and this is where this merger finds its merit. The combination of these companies creates powerful tools for an independent artist to reach their fans in new and unprecedented ways, all the while restoring the power where it belongs. In today's ever changing world, the ability for artists to connect to their fans and stay connected is critical for the health of our industry. Without sustainable, consistent economic models upon which to make key decisions, it is both the music and the fans that suffer.
In short, we have a broken system. This is a new model that puts power into the hands of the artist, creating a dynamic synergy that will inspire great works and attract healthy competition. The proposed merger you have before you helps create those opportunities by boldly addressing the complexity of the existing musical and economic landscapes.
Why, here's a helpful illustration, from Live Nation's own literature!
What it means: At the time this chart was done, approximately 2007, Live Nation merely controlled the three black arrows in the middle. If the merger with Ticketmaster goes through, it will control every aspect of the business between the artist and the fan, except for the booking agent.
However, given that Ticktemaster/Live Nation also would manage artists -- like Madonna, depicted here long before she signed her 360 deal with Live Nation -- the booking agent would become extinct soon enough. Why would the company, in its role as manager, want to hire an agent to negotiate with the company, in its role as promoter and ticket-seller?
Artist Nation. Live Nation. Fan Nation... Abomination?
For all of the bluster about the Ticketmaster/Live Nation merger from congressmen and senators this week, it's worth noting that neither the House nor the Senate can actually do anything to stop the corporations from combining.
The most significant roadblock in their path: the U.S. Department of Justice Antitrust Division.
"All I can say is that the DOJ's antitrust division is investigating the proposed transaction, and that we're going to vigorously enforce the merger antitrust laws and conduct a thorough investigation," says Gina Talamona, Deputy Director of Public Affairs.
Talamona has limited her comments to the Sun-Times and every other news organization to the statement above. But sources familiar with antitrust investigations say she couldn't answer the key question--how long will this take?--even if she wanted to.
Of the mergers that are investigated, each is evaluated on a case-by-case basis with one eye toward how it will affect competition in the given industry and the other on how consumers will be affected by it.
In its MediaFile blog, Reuters drops the names, including Seal (said to be a close personal friend of Ticketmaster chief Irving Azoff), Shakira, Journey, Van Halen and... Billy Corgan of the Smashing Pumpkins, a group that has long worked exclusively in Chicago with independent promoters (and Live Nation's archrivals) Jam Productions.
Together, Corgan and Jam have worked hard to explore alternative means of ticketing, thwarting Ticketmaster and that mysterious problem of how tickets wind up in the hands of scalpers instead of fans. But Corgan also is managed by Azoff. So it appears he's chosen sides.
Corgan's letter has not yet been published as part of the Congressional record of the subcommittee hearings, and he declined to share it with the Sun-Times or to talk about the issue. "I am loathe from here and ever on to talk about the music business. So
honestly I'd rather not comment," he wrote in an email.
According to the Reuters blog, Eddie Van Halen wrote a letter to the Congressional subcommittees that met earlier this week, supporting the merger. It reads in part:
There are so many problems facing the music industry today. Van Halen suceedeed based on our record sales and the many tours that we did to increase our record sales. But that business model just doesn't work anymore. Today, the majority of artists earn their living from playing live. What my son -- and any future band he plays in -- needs are new and innovative approaches to the problems facing the live entertainment industry. And I believe that the merger of Ticketmaster/Live Nation is one of those solutions.
Has-been rockers Journey also waxed rhapsodic about the merger:
The music industry has changed dramatically in the last several years. As technology changes the way people get access to their music, one thing stands true -- the live show. And the live show has become an even more important jumping off point to maintain the relationship between artists and our fans. The proposed merger of Live Nation and Ticketmaster Entertainment will provide artists at all levels of their careers with the opportunity to leverage a broader universe of venues and to expand their ability to reach current as well as new fans.
As did Seal, one of the few stars supporting the merger who is not managed by either Live Nation or Ticketmaster. He wrote:
The record business is not what it used to be. That is why I support the Live Nation/Ticketmaster merger -- because not only would it benefit established acts like myself, but the up-and-coming acts who are trying to build a following, as well.
On the other side, of course, is... the Boss. And, um... er... uh, there have to be more, no? Or, as yesterday's House subcommittee asserted, are they all really too intimidated to speak out? (Is it really better to play on Ticketmaster/Live Nation's farm than to not play at all?)
E.V. phone home! The time is now. Mr. Vedder, to finally even Pearl Jam's score with Ticketmaster.
According to the respected concert industry trade magazine Pollstar and the Congressional newspaper Roll Call, the reviled ticket broker Ticketmaster and the giant national concert promoter Live Nation have recruited a lot of top-dollar lobbying muscle to help them sell the proposed mega-merger on Capitol Hill, in addition to a list of impressive and well-connected names on the companies' boards of directors.
"As previously reported by Pollstar, the boards include some powerful FOBs - Friends of Barack," the magazine notes. Live Nation's board members include director Ari Emanuel, brother of President Obama's chief of staff, Rahm Emanuel, and Ticketmaster's board boasts director Julius Genachowski, a Harvard classmate of the President and a co-leader of the transition team's policy work group on technology, innovation and government.
Ticketmaster has retained former Rep. Mel Levine (D-Calif.)'s lobbying firm, Gibson, Dunn & Crutcher, and Live Nation has hired lobbyists Public Opinion Strategies. Lee Godown, longtime chief of staff to California Democratic Rep. Loretta Sanchez, and Daniel Kohns - Rep. Mike Honda's (D-Calif.) former communications director - both registered on behalf of the lobbyist firm and Live Nation.
CORRECTION/UPDATE: Glen Bolger, a partner in Public Opinion Strategies, has written to say that his firm "has NOT been retained for this project. We are not lobbyists. Odds are high that Roll Call meant to say Public Strategies, which is a lobbying firm." Indeed, Kohns is listed as working for Public Strategies on that company's Web site, though Sanchez is not.
Roll Call also reports that Live Nation is turning to powerhouse Democratic lobbyist Joel Jankowsky, former aide to House Speaker Carl Albert, in addition to Brunswick Group lobbyist and former Recording Industry Association of America CEO Hillary Rosen, as noted earlier on this blog
Writes Pollstar reporter Deborah Speer:
Odd how these circles go 'round - as head of the RIAA [Rosen] was on the opposite side of a controversy with one of Azoff's most noted management clients, Don Henley, when he was combating the Works for Hire recording practice.
Though the majority of Senators and Congressmen expressed degrees of skepticism about the merger, ranging from cautious wariness to outright disdain, during the two subcommittee hearings earlier this week, Ticketmaster/Live Nation obviously is not without friends in the Democratic party, and considerable pressure will be brought to bear on the Justice Department as it renders a decision (a process that, to date, remains a mystery to many reporters).
Then too there's the fact that, as one Washington, D.C. industry watchdog told this columnist, "For a precedent for the Obama administration vetoing this merger, you'd really have to go back to the Roosevelt years--and I'm talking Teddy, not F.D.R. Sad to say, the era of federal trust-busting is now ancient history."
A key aspect of Live Nation CEO Michael Rapino's testimony on its proposed merger with Ticketmaster has been that the giant national concert promoter is severely hurting in these tough economic times. Statements along these lines were made again and again before a Senate subcommittee on Tuesday and a House subcommittee today.
But in transcripts of the company's last three earnings calls statements to shareholders, Rapino paints a very different picture.
For the first quarter of 2008, his statement reads, in part:
Our competitive advantage lies in our global concert platform that spans multiple cities throughout 19 countries, staffed by the most experienced promoters and marketing personnel in the business, selling directly to over 40 million fans, servicing 1,000 artists annually through our 16,000 concerts. ...
We continue to refine our North American platform by exiting low-growth markets and expanding in the top 20 markets. The agreement to acquire the majority of the live music assets of Fantasma Production, a leading Florida-based promotion company, is part of this growth. The acquisition includes Fantasma's calendar events, two important outdoor midsize music venues, and two outdoor music festivals, significantly strengthening our position in the Florida market, where we historically have been underdeveloped.
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