Chicago Sun-Times
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Washington considers the Live Nation/Ticketmaster merger--with input from Chicago

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The antitrust division of the U.S. Department of Justice The Senate Judiciary Committee will hold its first hearing on the proposed merger of the controversial ticket broker Ticketmaster with the giant national concert promoter Live Nation tomorrow, and the scheduled witnesses include Jerry Mickelson, co-founder of Chicago-based Jam Productions, one of the largest of America's few remaining indie promoters.

Though it is now in the minority among major U.S. cities, Chicago remains a deeply competitive market for live music, with Jam and Live Nation often vying for major arena shows, and Jam maintaining a firm grip here on smaller theater gigs. In 2005, Jam won a $90 million verdict against Live Nation in a highly publicized anti-trust suit after testimony that included executives at the larger company boasting that they'd love to "crush, kill and destroy" the regional promoter.

Also scheduled to testify in Washington, D.C. are Irving Azoff and Michael Rapino, the Ticketmaster and Live Nation executives set to become the reigning braintrust at the new Live Nation Entertainment, and David A. Balto, senior fellow at the Center for American Progress, a self-described "think tank dedicated to improving the lives of Americans through ideas and action, combining bold policy ideas to help shape the national debate to expose the hollowness of conservative governing philosophies."

Presumably, the Center for American Progress group stands in solidarity with Jam in opposing the merger, though Mickelson has so far declined to comment on the issue.

The subcommittee on antitrust, competition policy and consumer rights is chaired by Herb Kohl, D-Wis., and its members include Sen. Chuck Schumer, D-N.Y., who has called for an investigation into Ticketmaster's handling of ticket sales for the upcoming Bruce Springsteen tour, and Sen. Orrin Hatch, R-UT, an outspoken critic of music piracy who also dabbles in music-making himself as a singer.

Entitled "The Ticketmaster/Live Nation Merger: What Does it Mean for Consumers and the Future of the Concert Business?," the session begins at 2:30 p.m. Eastern and will be Webcast on the committee's site at http://judiciary.senate.gov/hearings/hearing.cfm?id=3674.

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11 Comments

Your tenacity on this issue is to be commended, Jim.

Now, I am deathly curious regarding the situation with Jam Productions. When you say that Jam maintains "a firm grip here on smaller theater gigs," doesn't that imply the same kind of monopoly that Live Nation seeks to impose? I mean, I certainly like Jam better than Live Nation (Jam is, for example, responsible in part for the well-organized Summer Camp Festival, which, in recent years, has evolved beyond its hippie jam band roots to include fabulous headliners and mid-carders like Glenn Kotche, the Flaming Lips, the New Pornographers, and Les Claypool), it's still a big entity.

I guess my question is, why are these corporate brokers necessary at all? I'm certain there's a reason promoters find it necessary, else they wouldn't use them. But what is that reason?

I mean, whenever I see a show on Metro's website, it's always "Radio Station X" or "Record Label Y presents..." And Metro gets some pretty amazing bands. But if you go right up the street to, say, Park West, well, that's dealt exclusively through Jam (in fact, Park West's website is a delineation of Jam's). Why is that? Does it have to do with capacity, or is there something more insidious at work?

Your tenacity on this issue is to be commended, Jim.

Now, I am deathly curious regarding the situation with Jam Productions. When you say that Jam maintains "a firm grip here on smaller theater gigs," doesn't that imply the same kind of monopoly that Live Nation seeks to impose? I mean, I certainly like Jam better than Live Nation (Jam is, for example, responsible in part for the well-organized Summer Camp Festival, which, in recent years, has evolved beyond its hippie jam band roots to include fabulous headliners and mid-carders like Glenn Kotche, the Flaming Lips, the New Pornographers, and Les Claypool), it's still a big entity.

I guess my question is, why are these corporate brokers necessary at all? I'm certain there's a reason promoters find it necessary, else they wouldn't use them. But what is that reason?

I mean, whenever I see a show on Metro's website, it's always "Radio Station X" or "Record Label Y presents..." And Metro gets some pretty amazing bands. But if you go right up the street to, say, Park West, well, that's dealt exclusively through Jam (in fact, Park West's website is a delineation of Jam's). Why is that? Does it have to do with capacity, or is there something more insidious at work?

Brendan: There's a high bar set for a monopoly. Microsoft is the bar. Jam is not Microsoft. They engaged in fair competition with Live Nation (nasty competition, but fair on its face) for theatres and acts. Also, unlike Microsoft AND what Ticketmaster/Live Nation wants to accomplish, it is not running multiple integral elements of the business. It is not involved in signing artists and artist development with the 360 deals, etc. that both companies have now. The only thing that Live Nation/Ticketmaster doesn’t control is distribution of discs. But on the touring end they control everything. Control of venues in a particular market is not tantamount to a monopoly. I’m sure that Live nation/Ticketmaster will argue that the different divisions of the company (which Microsoft has now between because per the settlement with the DOJ , they had to mine out to some third party companies to keep things kosher ) will qualify that this is not a monopoly…let’s see how creative their lawyers are.

I guess my question is, why are these corporate brokers necessary at all? I'm certain there's a reason promoters find it necessary, else they wouldn't use them. But what is that reason?

Brendan - reagarding your comment that I've copied: Jam and Live Nation ARE the "promoters". Live Nation could be considered a corporate broker but in this context Live Nation is the promoter along wih Jam Productions. The radio stations you see listed on tickets are the sponsors not the promoters. The sponsors have very little to do with putting on a live event besides getting people to attend the show.

The promoter either Jam Productions or Live Nation is in charge of EVERYTHING (usually just locally but with Live Nation aka Clear Channel nationally too as they do promote entire tours) having to do with putting on a concert.

If you have any other questions please ask.

This is all very interesting as Clear Channel has bought out all large local promoters in all cities in the USA besides Chicago/Jam and Utah/United Concerts.

I appreciate the comments on this; it's nice to learn a bit more about the intricacies of this issue.

JG: I understand there's a high bar set for a monopoly. I was just a little confused as to what we were qualifying as too much power. Obviously, Live Nation would prefer to own all the outlets; but I'm pretty certain Jam and/or C3 would, too.

Jim: I totally get why bands would prefer, on the whole, to work with Jam or even C3 as opposed to Live Nation; but I still don't understand why theaters need them at all. I'm too young to have any idea what it was like in, say, the '60s or '70s, but I have to wonder what it was like back then. Did individual club/hall/theater owners book the shows, or was it always done by promoters like Jam? I ask because I think back to that scene in Almost Famous when the record company sent in that guy to help the band book more shows. Did this practice just evolve out of what the record companies used to do, or did the record companies used to subcontract to these promoters?

Thanks again for clarifying this for me. I'm incredibly interested in this issue and appreciate learning more about it.

Jim,

I did not have a question. The question in my comment was copied from Brendan's comment which I was answering.

Thanks again to all the commenters; you've answered a lot of the questions I've had for some time.

Dana,

There are still local promoters in other cities besides the ones you mentioned, namely C3 Presents in Austin and I.M.P. Productions in DC, among others. The impending merger, however, will make it much harder for these companies to do business as they have been doing successfully. If these companies decide to use the Ticketmaster system, which they do in some cases for certain larger-scale events, then the new LiveNation + Ticketmaster entity will be inherently gaining access into these local markets that they have thus far been unable to tap. This poses a huge threat, and is the first step in a series of others in conquering this last handful of potent independent promoters. This is not to mention the smaller guys, who at this point are forced to compete on an almost guerilla level.

Also, when you see a radio station on a ticket, they are generally co-promoting the show, which is a more literal way of saying "getting people to attend the show". The promoter's job in the most basic sense is to find the right band for the right venue at the right ticket price, which radio stations do often. When you leave this to a national, cookie-cutter operation like LiveNation, they often fail to understand the individual characteristics of a local venue and exactly the type audience each venue will attract. So what happens? The seats don't get filled, the band doesn't reach as large of an audience as they should, and paying customers don't receive as good of a concert experience. But LiveNation doesn't care, because they can make up the losses on these small shows with the margins they see on the big ones, since they control so many venues. If they start reaching into these smaller, independent, competitive markets, it will make for worse concert-going experiences, where right now there are robust music scenes.

Jim and readers,

We now know what the merger means. Ticket pricing fees are now between 80% to 100% of face value. Went to buy tix this weekend to see Iron Maiden in Denver. Lawn seats were listed a $18 face value, but cost $36 each after fees. The second to last section (so, not far from the lawn) had seats available for $36 each. However, after fees they cost $65 each.

I went down to the venue on Saturday to buy tickets directly from their box office. Historically, box offices sold face value. Nope. It was MORE expensive to buy them in person.

As consumers, we are totally f'd. I am not going to concerts anymore. I mean, Eagles tickets here are $175 each before fees. I am terrified to see what they are after.

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