Ticketmaster/Live Nation Merger Still in Limbo

Ticketmaster and Live Nation were already corporate bogeymen to concert goers before they proposed a merger back in February. But since then, anxieties have ratcheted up another notch.

You've got a company with a stranglehold on concert ticket distribution in one corner, and the world's largest concert promoter in the other. What happens when they mate? Even the most charitable prognosticators have had difficulty imagining how these merged behemoths wouldn't pose a potential threat to consumers and free-market competition alike.

So while we've gone through a few news cycles since the prospect of a merger first arose, it's good to check in on the latest nuggets of info as the Justice Department continues to scrutinize the $400 million transaction.

That brings us to the sterling work of the Chicago Sun-Times' mighty muckraker, Jim DeRogatis. The man's been keeping a watchful eye on the merger proceedings, and provides some valuable updates in his latest dispatch (via The Daily Swarm).

For starters: Live Nation is hurting. Stocks and attendance are down, and the company is jacking up prices on merchandise and concessions to compensate. And yet the company's head honcho Michael Rapino managed to pull in a $550,000 raise this year. Makes those folks at AIG look fairly prudent, huh?

Likewise, Ticketmaster is taking a hit as it waits for the Justice Department's seal of approval. The Wall Street Journal reports that Ticketmaster's first-quarter earnings dropped 78 percent from last year, due to "higher interest expenses and costs related to the pending Live Nation Inc. merger." Not to mention the still-festering black eye Ticketmaster earned for crossing the Boss with its TicketsNow "official scalping" service.

So both companies need this deal to go through. But can it pass the smell test?

That'll be no easy task if the Justice Deparment practices what it's been preaching lately. The head of the department's antitrust division, Christine Varney, made a rather public declaration Monday that the Obama administration would practice "vigorous antitrust enforcement" to ensure the market stays competitive. Varney mentioned neither Live Nation nor Ticketmaster by name in her speech, but that rhetoric can't be what either company wants to hear at this point.

Meanwhile, the merger gears keep turning: Ticketmaster's lenders have rubber stamped the deal, and Reuters reports the companies "expect the merger to close this fall." But the road leading to this corporate marriage still appears rocky.

Related links:
News: Ticketmaster, Live Nation merger in the works
LiveNation.com
The Motley Fool: Ticketmaster: Pass Go, Collect $200

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