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Concert promoter Jam sues Ticketmaster over contract

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According to a lawsuit filed Monday in Cook County Circuit Court, Chicago concert promoter Jam Productions is seeking to settle a dispute with Ticketmaster, based on an argument that arose once Live Nation merged with the event ticketing giant. At issue is who has rights to sell tickets at three of Jam's venues: the Park West, Riviera Theatre and Vic Theatre.

Cheap concert tickets in June? Well, sorta ...

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Live Nation/Ticketmaster, your new concert overlords, have announced a special deal on concert tickets this month. "No Service Fee June" means the live music behemoth will nix its always inconvenient "convenience fees," which often jack up the price of a simple concert ticket by a third or more.

When the two entertainment giants merged this year, with the surprise and seemingly easy approval of the Obama justice department, music fans quaked in their Chuck Taylors, fearing the sky wouldn't even be the limit to the fees they'd charge. This move follows last summer's similar round of price cuts (remember "No Service Fee Wednesdays"?) and is no doubt a grab to lure fans into a summer concert market that still has a lot of empty seats.

For the second time since news of the merger of giant national concert promoters Live Nation and monopolistic ticket brokers Ticketmaster was first announced 14 months ago, the heads of those two companies, Michael Rapino and Irving Azoff, declined to speak to the assembled music industry at South by Southwest about the alleged benefits to the consumer and the music world.

However, Assistant Attorney General Christine Varney, the Obama administration Justice Department official who approved the settlement paving the way for the merger in late January, did travel from Washington, D.C., to take part in a panel discussion Thursday afternoon entitled "Creative Capitol: Music, Culture and Policy under Obama."

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Christine Varney

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The following is a transcript of an interview conducted Thursday afternoon with representatives of the Department of Justice in response to a request for answers to numerous questions regarding its approval on Monday of the merger of Ticketmaster and Live Nation. This interview was conducted under the agreement that the responses would be attributed to the Justice Department, rather than naming the participants in the interview.

Q. I'd like to start by asking about the exclusivity agreements that Ticketmaster signs with almost every venue in America. The Department of Justice first investigated Ticketmaster during the Clinton administration, after which the government took no action. Pearl Jam famously was credited as spearheading that fight, though the Department of Justice actually went to the band instead of the band going to the Department of Justice. Because the band chose not to work with Ticketmaster, it couldn't play anywhere in the U.S. for almost two years, and it was one of the biggest bands in the world at the time. More than one independent promoter has said to me over the last few days--and throughout the yearlong consideration of this merger--that while those exclusivity agreements are still in place, there really can be no competition. During the press conference announcing this settlement, Assistant Attorney General Christine Varney noted that 20 percent of those exclusivity agreements will expire this year. But that means that 80 percent of them will stay in place.

A. The point is that 20 percent of them come up every year, so that while a lot of venues have these exclusive provisions with Ticketmaster--or with other ticketing companies, for that matter--that they typically don't run longer than five to seven years on average. Roughly 20 percent of them are coming up every year for renewal, so that provides an opportunity for the venues when their contracts come up to actually go out and renew them.

I also think it's important to recognize that the exclusive agreements are not just for the benefit of Ticketmaster, or insisted upon by Ticketmaster--that actually, in the course of our investigation in talking to a lot of venues, venues don't want to have more than one ticketing company, either. For some of them, a contract of a reasonable length in term of five years or something like that is actually a benefit to the venue itself in order to be able to have predictability in terms of those costs and expenses and know that, "O.K., we've settled now who are ticketer is and we [won't have to deal with that again until] our contract expires. So I wouldn't consider them to be just unilaterally imposed by Ticketmaster; that certainly wasn't what we found in the course of our investigation.

Q. I know that venues prefer these deals. But in Chicago, every major concert venue in the area has a deal with Ticketmaster, and if a band or a promoter or the combination of the two wants to play in this market to 2,000 or 20,000 people, and they chose for whatever reasons not to work with Ticketmaster, they just can't do it. It just seems like there can't be competition if these contracts remain in place.

A. I definitely understand that point, but I don't think it's something related to the merger itself, which is what we were investigating. Those agreements, to the extent they exist in your market, all predate Live Nation and are unrelated to the merger with Live Nation and I don't think are directly affected by that.

Q. It seems to me that it is part of the merger, in terms of the vertical integration. Live Nation, now that it is Ticketmaster and vice versa, is not going to not renew with Ticketmaster when the ticketing contracts on the 140 venues that it owns expire. You can say, "Well, that's not every venue in America." But in fact, Live Nation owns the vast majority of the outdoor amphitheatres in America, so that entire tier of the business is going to be locked into Live Nation and Ticketmaster.

A. Well, they would have been locked into Live Nation before, right? Irrespective of the merger, those Live Nation venues were going to be controlled by Live Nation.

Q. Sure. But let's say the Department of Justice had said, "One thing we think has to be done for this merger to take place is for Live Nation to divest of its venues. It's promoting bands, it's managing bands, it's selling tickets--competition can't exist if it also own the venues." If Live Nation had to divest all the amphitheatres, the new owners of the amphitheaters would have been free to choose between these three ticketing companies that are being created: Live Nation, AEG or Comcast-Spectacor.

A. The problem is that there isn't a good basis in antitrust laws for challenging vertical integration just sort of for the sake of challenging vertical integration. It's one thing where you have the ticketing company that dominates--Ticketmaster, which has a level of dominance over the ticketing business--but if you start looking at promotion and venue ownership and concerts, and those are things that are not directly affected by horizontal competition as a result of the merger, when you start talking about those vertical theories, aligning the different chains, you get torn between whether that can provide some real benefits to consumers versus whatever less competitive outcomes might happen.

Q. Let me cite the example of an antitrust ruling against vertical integration that is being quoted by a lot of consumer advocates and independent promoters: the Supreme Court ruling in 1948 in "United States vs. Paramount Pictures, et al." At that point, the Supreme Court said, "Hey, Hollywood movie studios, you make the movies; you distribute the movies; you cannot also own the theaters that show the movies." With Live Nation now, we'll have them creating or at least managing the content, distributing or promoting the content across the country, selling the tickets--not to mention the T-shirts and concessions and the rest--and owning the venues.

A. It's definitely true that that's the result of the merger. Paramount is a bit of a different era in antitrust law, I think you'd have to say. I don't think it would be as simple a case to bring in 2010.

Q. The Department of Justice does not think there would be the basis of a Supreme Court challenge here?

A. I don't know. Obviously, what we thought was the case that we saw competitive harm in was the case that involved the ticketing industry. In other areas, we certainly heard from many people presenting complaints along the lines that you are setting forth, and we felt that we didn't have the evidence to challenge on those fronts.

Q. I'm curious about the firewall provision in section nine of the settlement ruling: It's one paragraph. Let's say Jam Productions in Chicago wants to bring a fantastic band to town; it's competing with Live Nation and AEG to host that concert, and miraculously, it wins. It has to use Ticketmaster to sell the tickets, because as I said, Ticketmaster is locked into every major venue in Chicago until those exclusivity agreements expire. Jam's biggest competitor, Live Nation--a company that, court testimony shows, once expressed its desire to "crush, kill and destroy" Jam--is now going to know how Jam put that deal together and how it does business, and it's going to make money off of Jam's work via those egregious service fees that it tacks on to every ticket. How does the firewall actually help Jam?

A. The firewall is designed to protect the confidential information that sort of arises out of the ticketing. If Jam goes and promotes a concert at a venue that is ticketed by Ticketmaster, it stops that confidential information from being shared with the rest of the combined merged company. So they can't take the data that comes out of the ticketing relationship with Jam or the ticketing event that's being promoted by Jam and take that information and use it in their promotion business or use it in their artist management business to compete against Jam, or for any other reason, for that matter. That's the purpose and the intent of the firewall, to protect the people who need to go in and have a show put on at a venue that is ticketed by Ticketmaster, but who are competing with the Live Nation promotion business, or whose artists are competing with the [Live Nation-owned] Front Line Management side of the company.

Q. There are no specific provisions in the government ruling about how the firewall will be enforced, though it does say that people won't be able to have access to information from a competing promoter unless they need it as part of their job.

A. Right. The people in the ticketing business of course need access to the ticketing information, because their job is related to ticketing. It just prohibits those people from taking that information and moving it over into the other side of the business, into the concert promotion or artist management business.

Q. But who will enforce that?

A. Obviously, the Justice Department, the antitrust division which is headed by Christine Varney, will enforce it. There are substantial provisions in the final judgment that give us the right to go in and request information and documents, to request regular reports, to conduct investigations if we find that there is any evidence of a violation or if we want to assure ourselves that there is no evidence of any violation. We have those rights to affectively and aggressively enforce the decree and we will certainly take advantage of those provisions.

Q. But it's not as if there is going to be a Department of Justice hall monitor sitting on a stool in between the door from the ticketing office at Live Nation and the door to the promotion office at Live Nation.

A. Of course there's not going to be someone in their actual building, but there will be someone with the right to look at their emails and interview them and investigate any possible wrongdoing that they might commit.

That's an important point, and don't take that lightly. We do actively monitor consent decrees. We really do have a staff that does this, and will really monitor what's going on in the industry. We have a long history and experience in dealing with these kinds of things. It is an important point and I wouldn't take it lightly.

Q. My experience as a reporter covering these two companies for the last 15 or 20 years has been that transparency is not their strong suit. They don't answer questions, they don't respond to the press, it is very difficult for a consumer to find a complaint number to express dissatisfaction with Ticketmaster or Live Nation...

A. But there's a difference between reporters and the Department of Justice, who can use law enforcement, the courts, they can be held in civil contempt, they can be fined, so it's a little different.

We put a lot of time and effort into enforcing decrees, and it's very possible to get to the bottom of these things when you're trying to find out the facts regarding a particular incident. It might be that there's no public number for the public to call up, but there's definitely a number that we can call if we need information, and we can get documents, information, take depositions, and conduct any kind of investigation we might need to in order to enforce the decree, and we will.

Q. Let me ask more generally: There is a well-documented history than many congressmen and senators and consumer advocates referenced during the congressional hearings on the merger last year of neither of these companies being particularly consumer-friendly. Yet Ms. Varney several times during the press conference said this merger settlement will be good for consumers, there will be competition and prices will come down. I am having a hard time squaring the history with those statements.

A. What we saw when we looked at the merger was an opportunity to really protect competition by the divestitures that we ordered and by the conduct provisions that we have, and obviously when you do that kind of protection of competition, that is going to force the companies to engage in more pro-consumer behavior and behave more responsibly. That's what we were focused on enabling and that's what we think the decree successfully does.

Q. AEG and Comcast-Spectacor obviously have said they support this merger, since the settlement gives each of them a piece of Ticketmaster's business. But what about the fact that every other remaining independent promoter of size in the United States opposes this? There seems to have been no consideration given to the independent promoters.

A. I wouldn't say that there was no consideration. We talked to a lot of different people, and obviously, we don't disclose exactly who we talked to, but I can certainly assure you that we talked to a lot of these companies and tried to take into consideration the best we could the facts as they appeared to us and as we learned them in our investigation. That's why we put together a decree that has three prongs to it, that sets up AEG in the ticketing business, which is someone smaller promoters can use if they want to; and Comcast-Spectacor, which gets all the assets from the Paciolan business, and when you put those together with the behavioral provisions, you put all those things together, they don't just protect AEG and Comcast. They protect all the promoters and all the venue owners, from the largest ones down to the smallest ones.

Q. But you guys must be reading the press: From coast to coast, every single independent promoter that I've seen quoted in any publication, or the many that I've interviewed myself, all are against this settlement and really hate it. I have not seen a single quote from a smaller promoter saying, "I'll be really happy now to have three choices for ticketing, and I guess this merger isn't going to be as bad as I initially feared." Not a single one!

A. I'm not sure how to answer, or if that's really a question. All I can tell you is what we found in our investigation.

Q. I'm asking that if every independent promoter in America seems to disagree with the ruling, is that cause for concern for the Department of Justice to consider if maybe it missed something?

A. All I would say is that we've heard all of the concerns expressed all the way throughout our investigation. I don't think we're learning new things by the things that are coming out and people are saying in public. We took it all into account in the decision that ultimately we made.

Q. O.K. Now, I'm in Chicago, and you can't be a reporter in Chicago and not always have one eye on politics. Ticketmaster's board of directors included President Obama's longtime friend Julius Genachowski, until he resigned to accept the appointment to chair the FCC. Live Nation's board of directors includes Hollywood superagent Ari Emanuel, the brother of the President's chief of staff, Rahm Emanuel. Did either of them file letters in support of the merger?

A. There was no... We don't make our decisions that way. We make our decisions based on the facts and the law and the facts that are before us.

Q. I understand that. I'm just wondering if either of them, as part of the mountains of information on the merger that was considered pro and con, if either of these members of the companies' boards weighed in?

A. Again, I think if you want to ask questions of who might have weighed in, we don't talk about who. We get comments from the outside from people as we look at transactions. We don't talk about that. But obviously, anybody who's weighed in, whether it's you or your neighbor, if they want to talk about it, it's up to them. But this decision was made at the Department of Justice by the career staff and the folks in the antitrust decision, and it was based on the facts. There was no influence from anyone--no influence at all, it was all based on the facts.

Q. On the micro-level, Ticketmaster owns TicketWeb, which does ticketing on the level of clubs down to 100 or 150 people. TicketWeb does its best to mask its connection to Ticketmaster, and in fact its Web design goes out of its way to look as if it's done by a punk rocker in his basement. I've talked to several small club owners since the decision on the merger who've said that they don't want to do business with TicketWeb anymore, now that it's part of Live Nation, and they want to get out of their contracts. This goes back to the issue of, "I thought I was doing business with one company, and now I'm in bed with another."

A. That can happen in any merger. It's not an antitrust issue in the sense of competition being lost in the merger as a result of a change in the ownership. In any merger, a company may get bought by someone that somebody else doesn't like and doesn't want to do business with anymore. What we're trying to do is preserve when those people's contracts are up that they have good choices to go to and good opportunities to take advantage of. I know we've seen at the club level that there are tons and tons and tons of competitors out there that provide ticketing services for those types of venues. Obviously, we have no real basis to go in and break all the Ticketmaster contracts that they have with venues.

Q. You could have asked them to divest.

A. I don't think that that was really an area where we saw a level of concentration or competitive concern that you see at the bigger venues. If people are telling you they'd like to leave for someone else, we never heard from people at that level who felt that they didn't have anyone else to go to.

Q. What about the management component? That wasn't ever a consideration for divesting?

A. You can look at market shares and things like that in management, but the area where we found the competitive concern was in ticketing, and that's what we focused on in our remedy and that's where we required the divestitures and other behavioral provisions. Obviously, we looked at the management in the context of the effect it might have in the ticketing market, and along with the promotional it's the reason you have those firewall and data portability and behavioral restrictions, but in and of itself, it's a market that... well, there are a lot of managers out there. Even thought Front Line is large, and it may be even larger than all of its competitors, it doesn't actually have a very large share of the overall market when you look at it.

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UPDATED 4:45 P.M. TUESDAY WITH JUSTICE DEPARTMENT COMMENTS


UPDATED 7:45 A.M. WEDNESDAY WITH COMMENTS FROM INDIE PROMOTER SETH HURWITZ

After a year of quiet deliberations behind closed doors while everyone from angry congressmen to consumer advocates to Bruce Springsteen shouted in opposition outside, the U.S. Department of Justice on Monday gave its blessing to the merger of two of the most controversial companies in the music industry: giant national concert promoters Live Nation and monopolistic ticket brokers Ticketmaster.

The ruling--which can be read here--cleared the way for the creation of a new company called Live Nation Entertainment that will own more than 140 concert venues worldwide and sell 140 million tickets to 22,000 concerts annually. It will dominate every aspect of the live music industry, setting prices while promoting shows from small clubs to giant arenas, selling the tickets, concessions and merchandise for those gigs and managing the performers who play them.

The Justice Department did impose several conditions on the deal: Ticketmaster must sell one small subsidiary, Paciolan, to sports promoters Comcast-Spectacor, and it must share its ticketing software with the second largest national concert promoter, AEG Live. In theory, Ticketmaster, Comcast and AEG will now compete, offering venues three choices for ticketing, and possibly resulting in lower service fees.

"This settlement will preserve competition in primary ticketing and maintain incentives to innovate and discount, thereby benefiting consumers," Assistant Attorney General Christine Varney said when announcing the ruling. "This is the right result."

But many artists, consumer groups, industry analysts and music fans strongly disagree. "I don't know that is going to create the kind of even competitive field that was intended," Standard & Poor's equity analyst Tuna Amobi told the Reuters news service. Added Sally Greenberg, executive director of the National Consumers League: "We remain concerned that these two companies, with a history of anti-consumer behavior, will abide only by the letter, and not the spirit of the settlement agreement."

The major stumbling block to the scenario of three competing ticket brokers is that Ticketmaster has locked almost all of the major concert venues in America into exclusivity agreements of five to ten years, and venues will not be able to entertain competing offers until those expire. These agreements were at the heart of the Justice Department investigation of Ticketmaster in the mid-'90s, famously championed by Pearl Jam, though the federal government ultimately took no action at that time.

In Chicago, every major concert venue has an exclusive deal with Ticketmaster, from the United Center to the Allstate Arena to the Chicago Theatre. And many smaller clubs do as well, via Ticketmaster subsidiary TicketWeb, including hot spots such as the Empty Bottle, Martyr's and Reggie's.

The exclusivity agreements are not addressed in the new Justice Department ruling. Nor does it address other hot-button consumer issues, such as the fact that Ticketmaster service fees can add as much as 50 percent to the face price of a ticket, or charges that the company increasingly is holding back a percentage of seats for some shows to sell to the highest bidders in the secondary or scalpers' market.

Questioned about the exclusivity agreements at a press conference, Varney admitted the government is not making Ticketmaster abandon them. "What we're trying to do, as the ticketing contracts expires, which is coming up [for] 20 percent... this year, we are trying to make sure that there are competitive alternatives [and assure that Ticketmaster] cannot behave in an anticompetitive manner." As for after-market sales, she said, "Ticket resale was not part of this investigation."

The government also gave short shrift to the biggest concern of the few remaining independent concert promoters: that Live Nation will now have an unfair advantage when competing to promote the same artist, because the giant company will have intimate knowledge of the inner workings of its smaller competitors via its ticketing arm. The Justice Department expects Live Nation Entertainment to erect a "firewall" between its concert promotion business and its ticketing business, but no specific requirements for this are laid out in the federal ruling.

No specific requirements for this are laid out in the federal ruling, but a Justice Department spokesperson maintained that, "We will be vigilant in enforcing the firewall."

Widely considered to be the first major test of the Obama administration's stance on antitrust issues, the Justice Department's ruling is similar to many issued during the Clinton and Bush years, including the settlement of the Microsoft case. The government is trusting an ever-expanding big business to police itself and act in consumers' interests.

For followers of politics as practiced in Chicago, it is hard not to suspect some successful influence peddling. In addition to employing the most high-powered Democratic lobbyists in Washington, Live Nation's board members include Hollywood super agent Ari Emanuel, brother of President Obama's chief of staff and former North Side congressman Rahm Emanuel, while Ticketmaster's board of directors included the President's Harvard classmate and transition team leader Julius Genachowski, until he resigned to become chairman of the FCC.

What does the merger mean for the local music scene?

Chicago is unique among most major music markets in the U.S. as the home of one of the few remaining regional promoters, Jam Productions, which has been locked in a cutthroat competition with Live Nation for the last 15 years.

Live Nation promotes many of the biggest arena and stadium concerts here. It owns the First Midwest Bank Amphitheatre in Tinley Park and the Alpine Valley Music Theatre in East Troy, Wisc., and it controlled the Charter One Pavilion on Northerly Island until its contract there expired at the end of last summer's concert season. It also owns the House of Blues, though it has been frustrated in its attempts to purchase another large club or mid-sized theater.

Jam owns the Vic and Riviera theaters and the Park West, and it promotes the majority of shows at other mid-size venues such as the Aragon Ballroom and the U.I.C. Pavilion. It increasingly is losing out on larger arena shows to Live Nation as that company controls major artists' tours from coast to coast.

"I'm not sure how this ruling benefits the consumer, nor any of the competitors," Jam co-founder Jerry Mickelson said on Tuesday. "The Justice Department focused on one aspect of the vertical integration: ticketing. They didn't focus on venues, on promoters, on merchandise companies, on artists' managers or on any other aspect.

"We showed the Department of Justice how ticket prices increased from an average of $25 in 1996 to well over $60 last year, which in my view is a direct cause of the consolidation under Live Nation. We showed how we at Jam used to produce over 160 arena concerts and we're down to 30 or 40 a year. We showed, through Live Nation's own documents, how their food and beverage prices are higher than Major League Baseball, the NHL or the NFL. And we showed how when Live Nation entered the ticketing market in 2009, their convenience charges were higher than Ticketmaster's. So tell me how these increased prices have benefited the consumer?"

Mickelson is skeptical that AEG or Comcast will be able to compete with Ticketmaster, since Live Nation's brief and unsuccessful attempt to do the same last year was a major factor that ultimately led the two companies to merge.

"The merger is going to make it tough for any independent promoter to compete," Mickelson added. But he and the handful of other regional promoters making the effort--including John Scher in New York, Don Fox in New Orleans and Seth Hurwitz in Washington, D.C.--are unlikely to mount further legal challenges because of the staggering costs.

One thing Jam is considering is bringing its ticketing in house when contracts with Ticketmaster at the Vic, the Riv and the Park West expire at the end of 2011. The challenge will be competing with Live Nation without losing more business between now and then.

"I'd like to believe there still is a place for the independent entrepreneur--that's what we all believe in over here at Jam," Mickelson said. "But we'll see. It's tough to be competitive when both our hands are tied behind our back and we're facing a two-ton gorilla."

UPDATED WITH COMMENTS FROM SETH HURWITZ AFTER THE JUMP

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In a move that gives an unprecedented amount of power in the concert industry to one mega-corporation, the U.S. Department of Justice has approved the merger of giant national concert promoters Live Nation and monopolistic ticket brokers Ticketmaster.

After nearly a year of review, the Justice Department held a briefing in Washington, D.C. on Monday to announce its endorsement of the new merged company, to be called Live Nation Entertainment, providing it meets several conditions, including licensing its ticketing software to competitors, selling off one small part of its ticketing business and agreeing not to penalize any venues that chose to do business with competing ticketing companies for the next 10 years.

The merger is expected to remake the concert industry in the U.S., further shifting the business from small regional promoters--the new company will own more than 140 concert venues around the world, selling 140 million tickets to some 22,000 concerts a year--and its approval was seen as the first major test of the Obama administration's position on anti-trust issues.

Ignoring the many complaints from consumer groups, artists and independent promoters--starting with those voiced at a contentious Senate hearing last winter and continuing in recent months via anti-merger Web sites such as TicketDisaster.org--the Justice Department contends that the merger will not hurt competition in the live music industry.

"I was prepared to litigate at any and all points, until a settlement was achieved that efficiently dealt with all our anti-competitive concerns," Christine Varney, head of the Justice Department's Antitrust Division, said at the briefing.

Commenting on the conditions being imposed on the deal, Varney added, "It's going to benefit competition and benefit consumers. Generally when you see robust competition, you would expect to see prices coming down."

The conditions require that Ticketmaster sell one of its small subsidiary ticketing companies, Paciolan Inc., to the sports and entertainment company Comcast-Spectacor, and that it license its ticketing software to AEG Live, the second largest national concert promoter. In theory, Ticketmaster, Comcast and AEG will then be able to fairly compete in the ticketing business, offering venues three choices to sell their tickets.

However, the Justice Department does not seem to have addressed the fact that Ticketmaster has signed most major venues in the U.S. to long-term exclusivity agreements that prohibit them for using any other ticket broker. These exclusivity agreements were at the heart of the Justice Department investigation of the company in the mid-'90s, and though they were widely criticized by many artists, including Pearl Jam, no action ever was taken against Ticketmaster.

In the Chicago area, every major concert venue above the level of 1,500 seats--from theaters such as the Chicago, Auditorium, and Rosemont theaters to arenas including the United Center, the Allstate Arena, and the U.I.C. Pavilion--have exclusive deals with Ticketmaster.

"The conditions seem to be relatively benign," Tuna Amobi, an equity analyst at Standard & Poor's, told the Reuters news service. "There are no major divestitures required. I don't know that is going to create the kind of even competitive field that was intended."

"The DOJ has asked consumers, independent promoters, ticket brokers, artists and venue owners to take a very large leap of faith that the conditions imposed on the merger will improve competition and ultimately lead to greater choice and lower prices," Sally Greenberg, executive director of the National Consumers League, said in a statement released by TicketDisaster.org. "While we appreciate the efforts of the DOJ to extract meaningful concessions from the parties, we remain concerned that these two companies, with a history of anti-consumer behavior, will abide only by the letter, and not the spirit of the settlement agreement."

Chicago is one of the few major cities in the U.S. where an independent local promoter remains in vibrant competition with Live Nation for theater and arena shows. Jam Productions sells almost all of its tickets through Ticketmaster. Company officials have contended that Live Nation will now have an unfair advantage when competing to promote an artist's local appearance since it will now be one and the same company with Ticketmaster, and it will be privvy to information that will give it a competitive edge.

Jam executive Jerry Mickelson, who testified against the merger during last year's Senate hearings, did not respond to a request for comment, said he had not read the Department of Justice statement, so he could not comment yet.

More comments on the merger follow the jump.

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UPDATED THURSDAY A.M.; SEE BELOW

The controversial merger of two of the least-consumer-friendly entertainment companies in America -- the giant national concert promoter Live Nation and the monopolistic ticket broker Ticketmaster -- was first announced last February, but it could not move forward until approved by the U.S. Justice Department.

As the months dragged on and Justice maintained a stony silence on its approval process, one could be lulled into thinking that the whole thing might just go away -- one possible good outcome from a very, very bad economy.

But no such luck.The merger was approved late last year in the U.K. And today comes rumblings from Wall Street that it may soon get the O.K. on these shores as well.

The Wall Street Journal and Dow Jones news wires are reporting that shares of both corporate giants "rose Wednesday on speculation that the companies' merger will be approved by the U.S. Justice Department as early as the end of the month."

The sourcing for this "speculation" seems very sketchy, however, and one activist group adamantly opposed to the merger came out railing in a press release and blaming Ticketmaster/Live Nation for spreading its own good rumors.

"This is just the latest attempt by Ticketmaster and Live Nation to convince the public and the Department of Justice to 'just trust us.' Anyone who has been ripped off by their outrageous fees and inferior service knows that Ticketmaster does not have consumers' best interests in mind," said Sally Greenberg, Executive Director of the National Consumers League, a founding member of the TicketDisaster.org coalition.

"Thousands of consumers, fifty Members of Congress, and a broad and growing coalition of public interest groups and live event industry representatives oppose this merger as an attempt by one behemoth to snap up its only significant rival in the ticketing market and extend its market power into every level of the live event industry. DOJ should block this merger outright, and we have every hope that they will do so."

One can question ticketdisaster.org's motives -- one of its spokespeople is a representative of the National Association of Ticket Brokers, a lobbying group for all the businesses in competition with Ticketmaster (including scalpers) -- but as a veteran reporter who's covered both of these companies since their origins, I find it hard to disagree with many of the criticisms ticketdisaster.org makes of Live Nation and Ticketmaster on its Web site, which is well worth a visit.

Ticketdisaster.org's full statement follows the jump. Meanwhile, no comment from Ticketmaster or Live Nation.

Oh, and for the latest evidence of how consumers are consistently mistreated by both of these companies, check out my colleague Mark Guarino's account of the unbelievable ticket snafu for the upcoming local Lady Gaga shows.

UPDATE, THURSDAY A.M.:

Business Week is citing four unnamed sources and reporting that the Justice Department is seeking concessions from Live Nation and Ticketmaster before approving the merger. According to the magazine, these include "licensing ticketing software to concert promoters that compete with Live Nation... Proposals that have been explored include licensing ticketing technology to Anschutz Entertainment Group's AEG Live, the second-largest concert promoter after Live Nation... The sale of ticketing contracts and licensing software to a company controlled by Philadelphia-based Comcast Corp., the largest cable operator, also has been under consideration."

This fix still is oriented toward mega-corporations rather than providing any protections for the handful of smaller regional concert promoters still remaining in the U.S. and locked in a life-or-death struggle with Live Nation and Ticketmaster -- including Chicago--based Jam Productions, whose Jerry Mickelson testified against the merger last winter on Capitol Hill.

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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.

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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.

Schumer takes on the ticket scalpers

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Scalping engraving

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.)

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