Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 1 of 24
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.
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Case: 1-10-cv-00139
Date Filed: January 25, 2010
OPPOSITION TO THE [PROPOSED] FINAL JUDGMENT
Jam Productions, Ltd., a rival independent concert promoter based in Chicago,
opposes this Proposed Final Judgment on the basis that it does not remedy the loss
of competition in the live entertainment industry but rather sustains and strengthens
the injury and harm to the consumer and competition. The merger of these two
companies is vertical integration on steroids. There is no other company in any
industry (other than public utilities and professional sports) in the United States who
will have the dominance and power of this new merged entity of Live Nation and
Ticketmaster.
This merger creates an incredibly powerful company by combining the leading global
concert ticket selling company with the leading global live artist management
company with the leading global concert promoter with the owner of most of the
contemporary outdoor amphitheatres in the US. If this merger is allowed to proceed
the combined entity will have the ability to 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.
Live Nation Entertainment is the largest live entertainment company in the world,
consisting of five businesses: concert promotion and venue operations, artist
management, sponsorship, ticketing solution and e-commerce that includes Live
Nation, Ticketmaster and Frontline Management Group. Live Nation is the largest
producer of live concerts in the world, annually producing more than 22,000 concerts
on behalf of 1,500 artists in 57 countries. In 2009 Live Nation sold 140 million
tickets, promoted 21,000 concerts, partnered with 850 sponsors and averaged 25
million unique monthly users of its e-commerce sites. Ticketmaster serves more
than 10,000 clients worldwide in multiple event categories and sold more than 141
million tickets valued at over $8.8 billion on behalf of its clients in 2008. Frontline
Management is the world’s largest artist management firm representing 200+ of the
most popular performers in the music industry.
1
I. NATURE AND PURPOSE OF THE PROCEEDING
Defendant Ticketmaster Entertainment, Inc. ("Ticketmaster") and Defendant Live
Nation, Inc. ("Live Nation") entered into an agreement, dated February 10, 2009,
pursuant to which they would merge into a new entity to be known as Live Nation
Entertainment. 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 filed a civil antitrust Complaint on January 25, 2010, seeking to enjoin
the proposed transaction because its likely effect would be to lessen competition
substantially for primary ticketing services to major concert venues located in the
United States in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. This loss of
competition likely would result in higher prices for and less innovation in primary
ticketing services.
At the same time the Complaint was filed, the United States also filed a Hold
Separate Stipulation and Order ("Hold Separate") and proposed Final Judgment,
which are designed to eliminate the anticompetitive effects of the acquisition. Under
the proposed Final Judgment, which is explained more fully below, Defendants are
required to grant a perpetual license to their Host platform and to divest their entire
Paciolan business in order to establish two independent ticketing companies capable
of competing effectively with the merged entity. The Final Judgment also prohibits
Defendants from engaging in certain conduct that would prevent equally efficient
firms from competing effectively. Under the terms of the Hold Separate,
Ticketmaster will take certain steps to ensure that the Paciolan business is operated
as a competitively independent, economically viable and ongoing business concern
that will remain independent and uninfluenced by the consummation of the
transaction and to ensure that competition is maintained during the pendency of the
ordered divestiture.
The United States and Defendants have stipulated that the proposed Final Judgment
may be entered after compliance with the APPA. Entry of the proposed Final
Judgment would terminate this action, except that the Court would retain jurisdiction
to construe, modify, or enforce the provisions of the proposed Final Judgment and to
punish and remedy violations thereof.
II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED
VIOLATION
A. THE CONCERT INDUSTRY
Staging concerts traditionally has required the participation of several parties.
Artists, who provide the entertainment that makes the concert possible hire
Managers to represent them in negotiating the commercial terms of their recording
contracts, publishing royalties, live concert tours, merchandise and sponsorship
arrangements. Agents are hired by the Managers to represent artists in negotiations
to establish the commercial terms on which artists will perform. Promoters contract
with artists to perform at particular concerts, assume the financial risk of staging the
concerts, make the arrangements for the concerts to occur at certain times and
places, and market the concerts. Venues are the physical locations where concerts
occur, and venues' owners, operators, or managers usually arrange for the sale of
tickets to concerts at their venues. Primary ticketing companies provide services
2
Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 2 of 24
such as websites, call centers, and retail networks from which tickets may be
purchased.
B. THE DEFENDANTS AND THE PROPOSED TRANSACTION
Ticketmaster is the largest primary ticketing company in the United States. In 2008,
Ticketmaster earned gross revenues of about $800 million from its U.S. primary
ticketing business. Ticketmaster offers two principal primary ticketing products to
venues: (1) Host, a Ticketmaster-managed platform for selling tickets through
Ticketmaster's website and other sales channels; and (2) Paciolan, a venue-managed
platform for selling tickets through the venue's own website and other sales
channels. In 2008, Ticketmaster provided primary ticketing services to venues
representing more than 80% of major concert venues.
In addition to its primary ticketing operations, Ticketmaster expanded into the artist
management business in 2008 by acquiring a controlling interest in Front Line
Management Group Inc. ("Front Line"), an important artist management firm with
clients such as the Eagles, Neil Diamond, Jimmy Buffett, Aerosmith, Van Halen,
Christina Aguilera, John Mayer plus hundreds of others.
Live Nation is comprised of the following 24 promoters from across the country
whose businesses were purchased beginning in 1996; Contemporary Productions,
Sunshine Promotions, Cellar Door, Pace, Nederlander, Delsener/Slater, the Don Law
Company, Oakdale Concerts, A. H. Enterprises, Bill Graham Presents, Avalon,
DiCesare-Engler, Evening Star, Universal Concerts/House of Blues, Belkin
Productions, Electric Factory Concerts, Magicworks, Fantasma, Concert Productions
International, Concerts/Southern Promotions, the Entertainment Group, New Era
Promotions, Feyline Concerts and Cardenas Fernandez Associates.
Through their acquisitions of the above mentioned companies, Live Nation controls
the best and most of the contemporary outdoor amphitheatres (47) across the
country where performances by the top artists in the world are staged. Live Nation
currently owns 46 clubs and theatres and 11 House of Blues and continues obtain
more.
Live Nation is the largest concert promoter in the United States, earning more than
$1.3 billion in revenue from its U.S. promotions business in 2008 and promoting
shows representing 46% of the concert tickets sold at major concert venues in 2009.
Live Nation has entered long-term partnerships with several popular artists including
but not limited to Madonna, U2, Rolling Stones, Nickelback and Jay-Z to exclusively
promote their concerts, sell recordings of their music, and market artist-branded
merchandise such as T-shirts. Live Nation also owns or operates about 70 major
concert venues throughout the United States. Live Nation entered the market for
primary ticketing services in late December 2008.
As per Pollstar, the publication that tracks concert ticket sales, in 2009 Live Nation
sold 25,007,416 tickets (46.06% of the total tickets sold) in the United States while
their second largest competitor sold 10,742,104 tickets (19.78% of the total tickets
sold). The third largest concert promoter was C3 Presents with 1,386,106 tickets,
MSG Entertainment was fourth with 1,332,266 tickets and Jam was fifth with
1,291,556 tickets. Excluding Live Nation and AEG, the other 48 of the top 50 concert
promoters produced the remaining 34.16% of the US concerts.
3
Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 3 of 24
Case
1:10-cv-00139-RMC
Document
13-2
Filed
06/21/10
Page
4 of 24
2009
Top 50 U.S.
Concert
Promoters
1
25,007,416
Live Nation
2
10,742,104
AEG
Live **
3
1,386,106 C3 Presents
4
1,332,266
MSG
Entertainment
5
1,291,556
Jam
Productions
6
1,078,703
Palace Sports & Entertainment
7
863.854
Outback Concerts
8
819,007
The Bowery Presents
9
817,659
Magic Arts & Ent'ment / NewSpace Ent'ment
10
739.451
Nederlander Concerts
11
691,388
I.M.P./
Seth
Hurwitz
12
616,874
Premier Productions
13
571,962
Another Planet Entertainment
14
539,706
Tate
Entertainment
15
510,353
Knitting Factory Entertainment
16
504,962
Frank Productions
17
487,566
Icon
Entertainment Group
18
401,082
Rush
Concerts
19
395,661
Red Mountain Entertainment
20
297,004
A.C.
Entertainment
21
293,370
Beaver Productions
22
273,843
Metropolitan Talent Presents
23
270,229
Blue Deuce Entertainment
24
252,300
The Andrew
Hewitt
Company
25
246,619
Harrah's
Entertainment
26
214,208
Lucky
Man Concerts
27
211,813
Bill
5ilva Presents
28
208.979
True West /
Mark
Adler
29
201,309
Mike Thrasher Presents
30
181,090
Jade
Presents
31
178,247
PromoWest Productions
32
176,838
Mammoth Live
33
174,374
Seattle
Theatre Group
34
164,150
Rams Head Promotions
35
156,614
Fox
Associates
36
154,553
Olympia Entertainment
37
153,477
Monqui Presents
38
148,573
Stan Levinstone Presents
39
146.983
First Avenue Productions
40
144,879
Atlanta Symphony Orchestra
41
137,898
Higher Ground Productions
42
131,681
Bill
Blumenreich Presents
43
130,819
Hennepin Theatre Trust
44
130,603 PFM
45
126,296
Cardenas Marketing
Network
46
125,860
NAC
Entertainment
47
123,565 DCF
Concerts
48
120,846
Stone City Attractions
49
111,726
Hauser Entertainment
50
110,572
Vincent Longo
*
represents
the
combined
totals
of
Live
Nation,
House
of
Blues,
and
Live
Nation
Global
Touring
** represents the combined totals of AEG Live, Concert West, TMG, Goldenvoice and Moore Entertainment.
All
figures
are for
tickets
sold in the U.S. as
reported
to
POLLSTAR
for
shows
played
in
2009.
4
5
Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 5 of 24
2009
US Top
Promoters
COMPANY
TI
C
KET
S
SO
LD
% AGE OF
TI
C
KET
S SOLD
Live
Na
tion ,.
25,007,416
4
6.06%
AEG Live
**
10,7
4
2,104
19.78%
C3
Presen
ts 1
,386,
1
06
2.
55%
MSG
Ent
ertainment
1
,332,266
2.45%
J
am
Product
ions
1
,291,556
2.
38%
Pala
ce
Spo
rt
s & E
ntertainment
1
,078,703
1.99%
Outbac
k Conce
rt
s
863,854
1.59%
The Bowery Pre
sents
819,007
1.51%
Magic A
rt
s & E
nt'ment
/
NewSpace
E
nt'ment
817,659
1.51%
Nederlander
Concerts
739,451
1.36%
I.M.P. /
Se
th Hurwitz
69
1
,388
1.27%
Premier
Productions
616,87
4 1.
14
%
Another
Planet E
ntertainmen
t
57
1
,962
1.05%
Tate
E
ntertainmen
t
539,706
0.
99%
Knitting F
actory
Ent
ertainment
510,353
0.
94%
Frank Productions
504,962
0.
93%
Icon E
nte
rt
ainment
Group
487,566
0.
90%
Rush
Concerts
40
1
,082
0.74%
Red Mountain E
ntertainmen
t
395,661
0.
73%
A.C. E
nte
rt
ainment
297,004
0.
55%
Beaver
Productions
293,370
0.
54%
Metropolit
an
Talent
Presents
273,843
0.
50%
Blue Deuce E
ntertainment
270,229
0.
50%
The Andrew Hewitt
Company
252,300
0.46%
Harrah's
E
nterta
i
nment
24
6,6
19
0.45%
Lucky
Man
Concerts
214,208
0.
39%
Bill
Silva
Presents
211
,813
0.
39%
True
West / Mark Adler
208,979
0.38%
Mi
ke
Thrasher
Presents
201,309
0.37%
J
ade
Presents
18
1
,090
0.33%
PromoWes
t Product
ions
178,247
0.
33%
Mammoth
Live
176,838
0.33%
Seat
tle
Thea
tre Group
174,37
4 0.
32%
Rams
Head
Promo
t
ions
164,150
0.
30%
Fox
Associates
156,6
14
0.
29%
Olympia Ent
ertainment
154,553
0.
28%
Monqui
Presents
153,477
0.
28%
Stan
Levinstone
Presen
ts 14
8,573
0.27%
First
Avenue
Productions 14
6,983
0.
27%
Atlanta
Symphony
Orchestra
14
4,879
0.
27%
Higher
Ground
Productions
137,898
0.
25%
Bill
Blumenr
eich
Presents
13
1
,681
0.24%
Hennepin
Theatre
Trus
t
130,8
19 0.24%
PF"
130,603
0.24%
Cardenas
Marketing Network
126,296
0.
23%
NAC
E
nterta
i
nment
125,860
0.
23%
OC
F
Concerts
123,565
0.
23%
Stone
City Attract
ions
120,846
0.
22%
Hauser
E
nte
rt
ainment
11 1
,726
0.
21%
Vincent Longo
110,572
0.
20%
TOTAL
TI
CKETS SO
LD
54
,
296
,9 94
,.
represen
ts
the
combined
totals
of Live
Na
tion, House
of
Blues
and
Live Nation Global Touring
**
represents
the
combined
t
otals
of
AEG Live,
Conce
rt
s West,
TMG,
Goldenvoice
and
Moore E
ntertainment
All
figures
are
for t
ickets
sold in
the
U.S.
as
reported
to
POLLSTAR
f
or
shows
played
in
2009.
On February 10, 2009, less than two months after its entry into primary ticketing,
Live Nation agreed to merge with Ticketmaster. That proposed transaction would
substantially lessen competition and is the subject of the Complaint and proposed
Final Judgment filed by the United States in this matter.
III. STATEMENT OF OPPOSITION
With no disrespect to the Department of Justice, the Proposed Final Judgment only
concerns itself with the least important aspect of this merger, namely ticketing, while
completely avoiding and ignoring the unreasonable restraint of trade and commerce
violations in the presentation of live concerts and the attempt to monopolize such
trade and commerce. It should be noted that the topics I raise in this opposition
statement are not new to the DOJ since they have been raised from the very
beginning of their investigation. This merger if allowed to happen will affect the
entire live music entertainment industry.
Live Nation and Ticketmaster are both Goliaths, so their unification will
create a business with extraordinary market power, leverage and clout.
With the merger of Live Nation and Ticketmaster you have a company that: (1) sells
most of the concert tickets in this county through its contracts with venues (11,000
venue clients across 20 countries); (2) manages or controls the tours of the largest,
most popular top performers in the world (Madonna, U2, Rolling Stones, Jay-Z,
Shakira, Nickelback, Eagles, Christina Aguilera, Aerosmth, Jimmy Buffett, Guns ‘n
Roses, Alan Jackson, Steely Dan, Stevie Nicks, Chicago, Journey and 200 + others ;
(3) owns most of the amphitheatres in the US and also owns more club venues (11
HOBs) as well as controlling, thru owning/leasing a large amount of other clubs and
theatres; (4) purchases tours for its own amphitheatres and venues as well as other
buildings they don’t own or control; (5) owns touring, recording, merchandise, fan
clubs, etc. rights to many relevant performers; (6) owns a merchandise company
that sells the performers’ shirts, hats, etc.; (7) owns a company that provides ‘fan
club’ services to performers; (8) owns all the data to track ticket sales to provides a
huge competitive advantage; (9) owns the data to all competing promoters fan
bases; (10) and owns all data through the sale of tickets to provide their company
the best and largest Internet ability to offer their fan base more services and
products beyond live performances such as the bundling performers’ products for
sale on-line as well as sponsorship opportunities.
6
Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 6 of 24
IV. HARM TO THE CONSUMER
This merger will affect first and foremost the fan. The business model of Live
Nation has not been beneficial to the consumer but rather harmed them by
increasing the cost of attending a concert.
A. INCREASE IN TICKET PRICES
As history shows, this new company was the beginning of an unprecedented increase
in concert ticket prices. Their new business model entailed buying entire tours across
the country rather than individual shows on a market by market basis. This meant
that in order to promote every concert for a particular artist SFX/Clear Channel/Live
Nation had to substantially escalate the typical guaranteed payment to that artist so
they could obtain control of the tour. And as you will see below, this increase was
passed along to the public.
Between 1996, the year SFX began, and 2000, the year SFX was sold to Clear
Channel, the average ticket price for the country’s top 100 musical tours went
from $25.81 to $40.74, a 58% increase over those five years.
Between 2000 and 2005, the year Clear Channel spun off Live Nation into its
own publicly traded company, the average ticket price for the country’s top
100 musical tours went from $40.74 to $56.88, a 39% increase.
In 2008 the average ticket price for the top 100 tours jumped to $67.35.
Since the consolidation of the concert industry began some 12 years ago the
average ticket price has increased 160%.
Due to the recession the average ticket price for the top 100 tours dropped to
$62.57 in 2009 which still represents a 142% increase since 1996.
The increase in ticket prices can be attributed to the block booking of an
entire national tour of a performer where it is in Live Nation’s best interest to
keep the ticket prices high.
7
Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 7 of 24
LADY GAGA
Below is a list of Lady GaGa performances produced by various promoters with ticket
prices before the tour was sold to Live Nation:
DATE VENUE CITY ST TICKET PRICES
03/12/09 House of Blues San Diego CA $18.5/20
03/13/09 The Wiltern Los Angeles CA $23
03/14/09 Mezzanine San Franciso CA $21
03/16/09 Showbox at The Market Seattle WA $22/24
03/17/09 Wonder Ballroom Portland OR $18/20
03/21/09 Gothic Theatre Englewood CA $20
03/24/09 House of Blues Chicago IL $24/26
03/28/09 Royal Oak Music Theatre Royal Oak MI $20
04/06/09 House of Blues Lake Buena Vista FL $20/23
04/07/09 The Ritz Tampa FL $20.99/25
04/08/09 Revolution Fort Launderdale FL $19/21
04/09/09 Center Stage Atlanta GA $20
05/01/09 Electric Factory Philadelphia PA $15/20
05/02/09 Terminal 5 New York NY $20/25
12/01/09 Wang Theatre Boston MA $43/63
12/01/09 DAR Constitution Hall Washington DC $23.5/43.5
12/02/09 Wang Theatre Boston MA $43/63
12/03/09 Susquehanna Bank Center Camden NJ $35/45
12/13/09 Bill Graham Civic Auditorium San Franciso CA $48/50
12/14/09 Bill Graham Civic Auditorium San Franciso CA $48/50
12/19/09 Sports Arena San Diego CA $45
12/21/09 Nokia Theatre Los Angeles CA $59.75/79.75
12/22/09 Nokia Theatre Los Angeles CA $59.75/79.75
12/23/09 Nokia Theatre Los Angeles CA $59.75/79.75
12/27/09 Lakefront Arena New Orleans LA $35/45
12/28/09 Fox Theatre Atlanta GA $36.5/75
12/29/09 Fox Theatre Atlanta GA $36.5/75
12/31/09 James L Knight Center Miami FL $23/63
01/02/10 James L Knight Center Miami FL $23/63
01/03/10 UCF Arena Orlando FL $43
01/08/10 Rosemont Theatre Rosemont IL $35.5/73
01/09/10 Rosemont Theatre Rosemont IL $35.5/73
01/10/10 Rosemont Theatre Rosemont IL $35.5/73
01/12/10 Joe Louis Arena Detroit MI $35/45
01/13/10 Joe Louis Arena Detroit MI $35/45
01/20/10 Radio City Music Hall New York NY $45/65
01/21/10 Radio City Music Hall New York NY $45/65
01/22/10 Radio City Music Hall New York NY $45/65
01/24/10 Radio City Music Hall New York NY $45/65
01/26/10 Elliott Hall of Music W. Lafayette, IN IN $34.5
8
Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 8 of 24
The chart below is a list of Lady GaGa performances for her upcoming summer tour
in 2010 that indicates a substantial increase in ticket prices when Live Nation
purchased the tour. The top ticket price of $75 from just three months ago
has increased to $175, a jump of 133%.
07/01/10 TD Garden Boston MA
$175/85/49.5
07/02/10 TD Garden B
oston MA $175/85/49.5
07/04/10 Boardwalk Hall Atlantic City NJ $192.5/93.5/54.5
07/06/10 Madison Square Garden Arena New York NY $179.5/89.5/79.5/54
07/07/10 Madison Square Garden Arena New York NY $179.5/89.5/79.5/54
07/09/10 Madison Square Garden Arena New York NY $179.5/89.5/79.5/54
07/14/10 Quicken Loans Arena Cleveland OH $175/85/49.5
07/15/10 Conseco Fieldhouse Indianapolis IN $175/85/49.5
07/17/10 Scottrade Center St. Louis MO $175/49.5
07/20/10 Ford Center Oklahoma City OK $175/85/49.5
07/22/10 American Airlines Center Dallas TX $175/49.5
07/23/10 American Airlines Center Dallas TX $175/49.5
07/25/10 Toyota Center Houston TX $175/85/49.5
07/26/10 Toyota Center Houston TX $175/85/49.5
07/28/10 Pepsi Center Denver CA $175/85/49.5
07/31/10 US Airways Center Phoenix AZ $175/85/49.5
08/03/10 Sprint Center St. Louis MO $175/85/49.5
08/11/10 Staples Center Los Angeles CA $181.5/88.25/51.25
08/12/10 Staples Center Los Angeles CA $181.5/88.25/51.25
08/13/10 MGM Grand Hotel Las Vegas NV $183.75/89.25/52
08/16/10 HP Pavilion San Jose CA $175/85/49.5
08/17/10 HP Pavilion San Jose CA $175/85/49.5
08/19/10 Rose Quarter Portland OR $175/85/49.5
08/21/10 Tacoma Dome Tacoma WA $175-49.50
08/30/10 Xcel Energy Center St. Paul MN
$175/85/49.5
08/31/10 Xcel Energy Center St. Paul MN $175/85/49.5
09/02/10 Bradley Center Milwaukee WI 190.35/61.95
09/04/10 The Palace of Auburn Halls Auburn Hills MI $191.6/99.55/63.2
09/05/10 Consol Energy center Pittsburgh PA $175/85/49.5
09/07/10 Verizon Center Washington DC $178/88/52.5
09/08/10 John Paul Jones Arena Charlottesville VA' $175/85/49.5
09/14/10 Wachovia Center Philadelphia PA $175/85/49.5
09/15/10 Wachovia Center Philadelphia PA $175/85/49.5
09/16/10 XL Center Hartford CT $175/85/49.5
09/18/10 Time Warner Cable Arena Charlotte NC $177/87/51.5
09/19/10 RBC Center Raleigh VA $175/85/49.5
9
Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 9 of 24
B. HIGHEST FOOD & BEVERAGE PRICES
At Live Nation amphitheatres in 2007 the food & beverage per cap was $12.47,
higher than the National Football League ($11.42), Major League Baseball ($10.76)
and the National Hockey League (9.35). See the chart below from a Live Nation
presentation dated 11/15/07.
10
Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 10 of 24
C. HIGH FEES CHARGED TO THE CONSUMER
SFX/Clear Channel/Live Nation created new fees and increased old ones to raise the
price of box office service charges, facility fees, convenience charges, etc. which has
made it even more expensive for concert fans across our nation. Some examples
include the following:
The Lilith tour is stopping in the Chicagoland area on July 17
th
at the First
Midwest Bank Amphitheatre. Please note the following highlighted fees:
1. The ticket price of $258 per ticket with a $26 Convenience Charge.
2. The VIP Upgrade charge of $50 per ticket.
3. The VIP Fast Lane to gain access to the venue for $10 in addition to
the ticket price.
4. VIP Parking fee of $30 per car.
5. VIP Plus Parking fee of $40 per car.
6. Oversized vehicles & RVs fee of $75 per vehicle.
7. Limousine parking charge of $50 per limo.
11
Case 1:10-cv-00139-RMC Document 13-2 Filed 06/21/10 Page 11 of 24
Rush is performing in Chicago on July 5
th
at the Charter One Pavilion. Please
note:
1. The $9.50 per ticket Facility Fee
2. The $18.50 Convenience Charge.
3. VIP Parking of $30 per car.
4. VIP Fast Lane to gain access to the venue for $10 in addition to the
ticket price.
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Live Nation Concert Club
Not only does the consumer have to pay for their tickets, convenience
charges, facility fees, access fees and so on and so forth, Live Nation charges
the consumer an additional fee to “move to the front of the line for tickets” to
“avoid the hassles of the public on-sale frenzy.”
As per the Live Nation website:
You’ll be first to know – and first in line – for the tickets you want to
the concerts you most want to see. Starting at $295, Concert Club
membership allows you to move to the front of the line for tickets to
events in your city before they go on sale to the public. Live Nation’s
Concert Club is like having a friend in the business. Us.
Concert Club Benefits:
1. You’ll get the tickets you want – first
2. You’ll avoid the hassles of the public on-sale frenzy
3. You’ll be among the first to know about upcoming shows
Jam, along with other independent promoters, do not charge the
consumer to be “among the first to know about upcoming shows.”
Our information is provided for free.
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V. HARM TO COMPETITORS
This merger will negatively affect every facet of the live music industry and harm
competition from rival promoters, venues, managers, merchandise companies,
ticketing companies, secondary ticketing companies, fan club companies, record
companies and even companies that provide sponsorship opportunities. Live
Nation/Ticketmaster will have a competitive advantage that already yields monopoly
power over major portions of the live music entertainment industry.
In a Live Nation presentation dated September 26, 2006 they set out the
plan to transform their business model to vertically integrate the entire live
music industry from the artists to the fans. In just a few short years Live
Nation has succeeded in their efforts.
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A. HARM TO COMPETING PROMOTERS
Live Nation engages in block booking, in other words buying an entire
tour, a system which prevents competitors from bidding for single performers
on their individual merits by entering into an exclusive master agreement
with one promoter for all the performances across the country or around the
world.
Master agreements with performers allows Live Nation to allocate the
guarantee payment to the performers as it sees fit which
unreasonably restrains trade.
Live Nation uses the monopoly power gained from owning 47 outdoor
of the most important outdoor amphitheatres to purchase summer
tours of artists performing outdoors and leverages these ‘sheds’ into
purchasing the entire indoor tour of many of those same performers.
Some of the performers include Aerosmith, Tim McGraw, Fleetwood Mac,
Nickelback, Maroon Five and many others. Two examples this year include the
following:
In the upcoming summer of 2010 Tom Petty and the Heartbreakers are
performing exclusively for Live Nation in most of their outdoor
amphitheatres except in Chicago the band is playing indoors at the United
Center. Tom Petty’s manager intended for Jam Productions to be the
promoter for the indoor show in Chicago and he also attempted to include
other non Live Nation promoters in a couple of other cities. Jam, along
with the other promoters, were excluded from promoting Tom Petty’s
indoor shows because Live Nation used their monopoly and market power
by threatening to lower their monetary offer to Tom Petty if he did not
perform all his concerts exclusively for Live Nation.
Jam was excluded from producing John Mayer’s indoor concert this past
April at the United Center in Chicago even though the manager wanted to
have Jam co-promote this concert due to the leverage Live Nation used
with their amphitheatres. John Mayer is coming back to the Chicagoland
area for another Live Nation concert in August.
Live Nation’s artist agreements at times contain various provisions by which
contract discriminations against small independent promoters and in favor of
Live Nation were accomplished. The competitive advantages of these
provisions are so great that their inclusion in contracts with Live Nation
constitutes unreasonable discrimination against small independent
competitors. Some of these advantages include:
Large upfront ‘loan’ for the tour.
Stock options in the company.
If Live Nation does not produce all the performers’ concerts the payment
to the performer decreases.
Artist VIP packages included in the gross ticket sales.
Live Nations pays certain performers such as Jimmy Buffett more
than 100 percent of the gross ticket sales.
Live Nation submits offers to artists where Live Nation loses money
even when selling every ticket to that venue in order to prevent
various pe
rformers from contracting
with competing promoters and
venues.
See Live Nation offer with certain redacted information on the next page
where at sell out Live Nation loses $2,387.48.
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Live Nation annually purchases many indoor arena tours which has
substantially eroded what used to be a core part of independent
promoters income.
For example, in 1996 Jam produced 130 arena concerts but in
2009 we only produced 33. The single most profitable part of our
business has been dramatically impacted and continues to
decrease each year.
Live Nation produces most of today’s stadium tours that has
eliminated another important segment of independent promoters
income.
From 1990 to 2003 Jam produced 25 stadium concerts (in excess
of 35,000 capacity) but has not produced one since 2003.
Jam’s contract with Ticketmaster expires on December 11, 2011 but
contains language with the intent to terminate the agreement in the
event Ticketmaster becomes a company that is engaged in the day-
to-day business of promoting live entertainment events or engaged in
the day-to-day business of artist management.
The financial terms contained in this agreement puts Jam at a
competitive disadvantage to Live Nation.
Jam recently informally requested to terminate their Ticketmaster
agreement but was denied by Michael Rapino and Irving Azoff,
Jam’s rival competitor.
If the downward trend of diminishing returns continues as it has there might
not be enough competing promoters able to remain in business.
Our major competitor will have access to our ticket sales information,
customer data bases and the financial terms of our ticketing agreements.
Live Nation/Ticketmaster might decrease the financial terms of our
ticketing agreement when they come up for renewal and/or increase their
overall share.
Live Nation/Ticketmaster will be receiving income from every ticket sold to
our concerts which could be used to compete against us.
Live Nation/Ticketmaster will have additional revenue streams we do not
currently share in, such as revenues from the sale of tickets at every
venue or on Ticketsnow, which means they will be able to pay an artist
more money to perform.
Fans who want to see Jam shows will have to go to our main competitor’s
website to purchase tickets.
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B. HARM TO RIVAL MANAGERS, MERCHANDISE COMPANIES, TICKETING
COMPANIES, SECONDARY TICKETING COMPANIES, RECORD COMPANIES,
FAN CLUBS AND SPONSORSHIP COMPANIES.
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. Live Nation serves more than 1,000 artists through its
array of services including; global touring (Madonna, U2, Jay-Z, Lady GaGa, etc.);
merchandise and licensing (Signatures Network, Anthill, TRUNK Ltd.); sponsorship
and strategic alliances; recorded music; studios; media rights; digital rights; fan
club/websites (UltraStar, Music Today); marketing and creative services (Tour
Design).
All of these services combined together in one company could unreasonably restrain
trade and commerce across the entire spectrum of the music industry.
An excerpt from the 1992 U.S. Supreme Court decision in the Eastman Kodak case
states The Court has held many times that power gained through some
natural and legal advantage such as a patent, copyright, or business
acumen can give rise to liability if "a seller exploits his dominant position in
one market to expand his empire into the next." Times-Picayune Publishing Co.
v. United States,
345 U.S. 594, 611
(1953), see, e.g., Northern Pacific R. Co. v.
United States, 356 U.S. 1
(1958); United States v. Paramount Pictures, Inc.,
334 U.S. 131
(1948); Leitch Mfg. Co. v. Barber Co., 302 U.S. 458, 463 (1938).
One example of the power this new merged entity wields is in the fan club business
where Live Nation and Ticketmaster are exploiting their dominant position to expand
their empire. There are bands who are not managed by Front Line, who do not work
with a Ticketmaster owned fan club company and do not sell their fan club tickets
through Ticketmaster. If that band wants to do a presale for their fan club at a
Ticketmaster controlled venue then the band is allowed to put as many tickets
towards that presale as the band wants only if those fan club tickets are sold through
Ticketmaster. However if the band wants to sell their fan club tickets through a
different or competing ticketing company outside of the venue’s primary ticketing
agreement with Ticketmaster then Ticketmaster will limit the amount of tickets to
8% of the sellable capacity. But if the band uses Ticketmaster then they have the
ability to sell more tickets directly to their fans through their fan club.
VI. RAISING THE BARRIERS TO ENTRY
Today, before the merger of Live Nation and Ticketmaster is approved, a start up
concert promoter still has a chance to succeed. But this new merged company will
raise the barrier to entry to an almost unobtainable height for all the reasons cited
above.
Prior to the merger all of the following components of the live music industry have a
chance to succeed; artists’ managers, venue owners and operators, merchandising
and licensing, recorded music, fan clubs/websites, fan clubs, marketing and creative
services, sponsorship and creative alliances. But if this merger is allowed all of these
businesses will face enormously high barriers to entry making it exceedingly difficult
to compete.
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VII. ANTI-RETALIATION PROVISION AND OTHER PROVISIONS DESIGNED
TO PROMOTE COMPETITION MIGHT NOT WORK
A. PROPOSED FINAL JUDGMENT
The Proposed Final Judgment contains an anti-retaliation provision and other
provisions designed to promote competition but they will be extremely difficult and
virtually impossible to enforce in order to maintain compliance. In addition, these
provisions might not produce the intended results of promoting competition.
The Proposed Final Judgment states Ticketmaster and Live Nation shall not:
retaliate against a venue owner because that venue is contemplating
contracting with another ticketing company
condition or threaten to condition the provision of live entertainment events
to a venue owner if that venue owner signs a contract with Ticketmaster
condition or threaten to condition the provision of ticketing services to a
venue owner based on that venue owner refraining from contracting with
another ticketing company for the provision of live entertainment events
disclose to any employee any ticketing data from any competing promoters,
venues or artist managers except to an exempted employee who requires the
information as part of their job function.
Every venue owner or manager knows the leverage that Live Nation and
Ticketmaster has in regards to providing content/talent to their buildings. None of
them can afford to miss their budgets so there will be very few that sign with
another ticketing company. The implied threat of leaving Ticketmaster is clear
to every person who owns or operates a venue since they all know the
possible consequences with the reality that any violations of these
provisions will be extremely difficult to prove and enforce.
B. CAN THE AEG LICENSE WITH TICKETMASTER AND DIVESTITURE OF
PACIOLAN TO COMCAST-SPECTACOR SUCCEED?
AEG
The Proposed Final Judgment assumes that it will enable Anschutz Entertainment
Group, Inc. ("AEG") to become a new, independent, economically viable, and
vertically integrated competitor in the market for primary ticketing services to major
concert venues. AEG is the second largest promoter in the United States (behind Live
Nation), promoting shows representing about 20% of all the concert tickets sold at
major concert venues in 2009. No company other than AEG or Live Nation promotes
concerts representing more than 3% of the concert tickets of major concert
performers. AEG also owns, operates, or manages more than 30 major concert
venues, representing about 8% of the capacity at major U.S. concert venues, and it
can select (or influence the selection of) the primary ticketing company for those
venues. In addition, AEG owns one-half of an important artist management firm with
several popular clients, including Justin Timberlake and the Jonas Brothers. The
Department of Justice believes that due to its significant presence in promotions,
venues, and artist management, AEG is the company best positioned to achieve the
necessary scale, overcome the other entry barriers discussed above, and compete
successfully with the merged firm in the market for primary ticketing services to
major concert venues.
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COMCAST-SPECTACOR
The Proposed Final Judgment requires that Defendants divest Ticketmaster's entire
Paciolan business that will establish another independent and economically viable
competitor in the market for primary ticketing services to major concert venues.
Ticketmaster currently licenses its Paciolan platform both directly to venues
representing 3% of major U.S. concert venue capacity and to other primary ticketing
companies that sublicense the Paciolan platform to venues representing an additional
4% of the relevant market. Before consummating the proposed transaction,
Defendants must enter a letter of intent to divest to Comcast-Spectacor, L.P.
("Comcast-Spectacor") the entire Paciolan business, including all intellectual property
in the Paciolan platform and all contracts with venue and primary ticketing company
licensees of that platform. Through its New Era Tickets ("New Era") subsidiary, which
currently licenses the Paciolan platform from Ticketmaster, Comcast-Spectacor
already provides primary ticketing services to venues representing 2% of major
concert venue capacity. In addition to its interest in New Era, Comcast-Spectacor
owns 2 major U.S. concert venues and manages 15 others. When combined with
New Era's ticketing business and Comcast-Spectacor's venue presence, the
Department of Justice believes the Paciolan business that the Final Judgment
requires Defendants to divest would provide Comcast-Spectacor sufficient scale to
compete effectively and independently with the merged firm in the market for
primary ticketing services to major concert venues. Comcast-Spectacor and others
have contended that the movement in primary ticketing services will be towards
"self-enablement" models, such as Paciolan, which allow a venue to manage its own
ticketing platform.
It should be noted that the Paciolan system has been inferior to the Ticketmaster
system that has, in the past, had problems which might not have been eliminated.
C. WHAT IF AEG AND COMCAST-SPECTACOR DO NOT SUCCEED?
Nothing in this Proposed Final Judgment prevents Live Nation and Ticketmaster from
bundling their services and products in any combination or from exercising their own
business judgment in whether and how to pursue, develop, expand, or compete for
any ticketing, venue, promotions, artist management, or any other business, so long
as they do so in a manner that is not inconsistent with the provisions of the
Judgment.
The bottom line is that Ticketmaster’s ticketing system is vastly superior to
any system on the market. Their superior technology along with their
software and hardware is going to make it exceedingly difficult for any
other company to increase their market share. Combine that with the
merged company’s ability to provide content from Live Nation’s concerts
and Front Line’s management roster and you can understand why major
arenas are signing on with Ticketmaster.
That being said, the Proposed Final Judgment does not address nor contemplate
what happens to the consumers and industry if Ticketmaster retains their enormous
market share due to the critical mass and sheer market power they have obtained.
To rely on just the ticketing segment of the industry to challenge the monopoly
power of Live Nation and Ticketmaster gets to the essence of the shortcomings of
this Proposed Final Order.
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VIII. STARE DECISIS
The Department of Justice has chosen to ignore the precedent set by the United
States v. Paramount saying it is ‘old’ law. The DOJ has also ignored Eastman Kodak
v. Image Technical Services as well as United States v. MCA. So the lawyers who
work for the US government are consciously choosing the forget about the Stare
Decisis doctrine they are all taught in law school
Stare Decisis is Latin for “to stand by that which is decided.” It is the principal that
the precedent decisions are to be followed by the courts.
Although the doctrine of stare decisis does not prevent reexamining and, if need be,
overruling prior decisions, “It is……a fundamental jurisprudential policy that prior
applicable precedent usually must be followed even though the case, if considered
anew, might be decided differently by the current justices. This policy……”is based on
the assumption that certainty, predictability and stability in the law are the major
objectives of the legal system; i.e., that parties should be able to regulate their
conduct and enter into relationships with reasonable assurance of the governing
rules of law.” (Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d
287, 296.)
A. UNITED STATES V. PARAMOUNT PICTURES, INC. et al
It was ordered, adjudged and decreed as follows:
From granting any licenses in which minimum process for admission to a theatre are
fixed by the parties, either in writing through a committee, or through arbitration, or
upon the happening of any event or in any manner or by any means.
From making or further performing any formula deal or master agreement to which it
is a party. The term ‘formula deal’ as used herein means a licensing agreement with
a circuit of theatres in which the license fee of a given feature is measured for the
theatres covered by the agreement by a specified percentage of the feature’s
national gross. The term ‘master agreement’ means a licensing agreement, also
know as a ‘blanket deal’ covering the exhibition of features in a number of theatres
usually comprising a circuit.
From licensing in the future any feature for exhibition in any theatre, not its own, in
any manner except the following:
A license to exhibit each feature released for public exhibition in any
competitive area shall be offered to the operator of each theatre in such area
who desires to exhibit it on some run selected by such operator and upon
uniform terms.
Each license shall be granted solely upon the merits and without
discrimination in favor of affiliates, old customers or others
Each license shall be offered and taken theatre by theatre and picture by
picture rather than block booking each feature. In other words, block
booking, a system which prevents competitors from bidding for single
performers on their individual merits by entering into an exclusive maser
agreement with one promoter for all the performances across the country or
around the world, was no longer permissible.
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From continuing to own or acquire any beneficial interest in any theatre, whether in
fee or shares of stock or otherwise, in conjunction with another defendant, and from
continuing to own or acquire such an interest in conjunction with an independent
where such interest shall be greater than 5% unless such interest shall be 95% or
more. The existing relationships which violate this provision shall be terminated
within two years.
From expanding its present theatre holdings in any manner whatsoever except as
permitted in the preceding paragraph.
From operating, booking, or buying features for any of its theatres through any
agent who is know by it to be also acting in such manner for any other exhibitor,
independent or affiliate.
B. EASTMAN KODAK V. IMAGE TECHINCAL SERVICES
The DOJ has also chosen to ignore the 1992 Supreme Court decision in Eastman
Kodak v. Image Technical Services that cites the US vs. Paramount decision. An
excerpt of this cases states that even assuming, despite the absence of any
proof from the dissent, that all manufacturers possess some inherent
market power in the parts market, it is not clear why that should immunize
them from the antitrust laws in another market. The Court has held many
times that power gained through some natural and legal advantage such as
a patent, copyright, or business acumen can give rise to liability if "a seller
exploits his dominant position in one market to expand his empire into the
next." Times-Picayune Publishing Co. v. United States,
345 U.S. 594, 611
(1953),
see, e.g., Northern Pacific R. Co. v. United States, 356 U.S. 1
(1958); United
States v. Paramount Pictures, Inc., 334 U.S. 131
(1948); Leitch Mfg. Co. v.
Barber Co., 302 U.S. 458, 463
(1938). Moreover, on the occasions when the Court
has considered tying in derivative aftermarkets by manufacturers, it has not adopted
any exception to the usual antitrust analysis, treating derivative aftermarkets as it
has every other separate market. See International Salt Co. v. United States, 332
U.S. 392 (1947); International Business Machines Corp. v. United States, 298 U.S.
131 (1936); United Shoe Machinery Corp. v. United States, 258 U.S. 451 (1922).
Our past decisions are reason enough to reject the dissent's proposal. See Patterson
v. McLean Credit Union, 491 U.S. 164, 172
-173 (1989) ("Considerations of stare
decisis have special force in the area of statutory interpretation, for here, unlike in
the context of constitutional interpretation, the legislative power is implicated, and
Congress remains free to alter what we have done").
It is interesting to note that in 1992, just 18 years ago, the Supreme Court did not
believe the United States v. Paramount was old law since it was cited in this decision.
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C. UNITED STATES V. MCA INC.
The Department of Justice has seemingly not given any consideration to the United
States v. MCA Inc., filed in the US District Court for the Southern California District
of California, Central Division. The merits of this decision should be applicable to the
merger at hand.
In 1962 the Court entered a final consent judgment in the United States’ action
against MCA, which alleged violations of the Clayton Act and the Sherman Act. The
Court restrained MCA from vertically integrating certain types of entertainment
businesses and from making any acquisitions or mergers with any major television
production companies, theatrical motion picture production companies or major
phonograph record companies.
IX. CLOSING
The merger of Live Nation and Ticketmaster harms the consumer and every
competitor in the live entertainment industry. This merger is not about the benefits
to the consumer but rather the pursuit of obtaining monopoly power. The people who
are rewarded include one high level executive who received over $30,000,000 for
putting this deal together while other executives are receiving extremely large
annual salaries and stock options. I think that says a lot about the motivation in
seeking to marry Live Nation and Ticketmaster.
This merger is the poster child of why there are anti-trust laws in this country. The
Department of Justice seems to be taking the position that if 24 separate promoters
were operating the way Live Nation does today then they would be in violation of the
anti-trust laws. But when put under one roof these 24 promoters are not in violation
of these same laws. This makes no sense and runs contrary to protecting the
consumer, regardless of whether it is 1 company or 24.
The fact is that movie studios still believe that US vs. Paramount is the law of the
land since none of them have violated that decision. It’s interesting to note that
since the inception of SFX/Clear Channel/Live Nation in 1996 concert ticket prices for
the Top 100 tours have risen 142% through 2009 (from $25.81 to $62.57) but
movie prices during the same time span have only risen 70% (from $4.42 to $7.50).
The fact that movies are reasonably priced is a major factor in the success of the
movie industry since it is still affordable to the consumer.
If this merger is allowed it sets a disastrous precedent for large companies to
leverage their dominant power in other industries to the detriment of the consumer
and competition. The bottom line is that content providers (management of
artists/buying a tour/360 deals) must be separate and not part of the same company
that also has the distributors (promoters and ticketing) and owns the venues.
Jam Productions, Ltd.
Jerry Mickelson, Chairman and Exec. V.P.
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