Live Nation Bought Ticketmaster
In January 2010, one of the most significant deals in the entertainment industry was announced. Live Nation, the world’s leading live entertainment company, had just bought Ticketmaster, the global leader in ticket sales and distribution. The news caused a stir in the industry, with many wondering about the implications of the deal.This blog post aims to provide a comprehensive overview of the acquisition, the reason behind it, and the impact it had on the entertainment industry.
The Acquisition
Live Nation Entertainment Inc. is an American company that specializes in producing and promoting live entertainment events. It was formed in 2010 when Live Nation, Inc. merged with Ticketmaster Entertainment Inc. to create a new entity that combined live entertainment production with ticket sales, marketing, and distribution.The deal was worth $2.5 billion, with Live Nation paying $750 million in cash and issuing 120 million shares of common stock to Ticketmaster shareholders. The new company was named Live Nation Entertainment Inc., and it became a dominant force in the entertainment industry, with control over both live event production and ticket sales.
The Reason Behind the Deal
The acquisition of Ticketmaster by Live Nation was mainly driven by the need to reduce the costs associated with live event production. By combining ticket sales, marketing, and distribution with production, Live Nation could cut costs and improve profitability.Previously, Live Nation had to pay Ticketmaster for each ticket sold, which meant that Ticketmaster took a percentage of the revenue generated by Live Nation’s events. By acquiring Ticketmaster, Live Nation eliminated this cost and could keep all of the ticket revenue generated by its events.The deal also allowed Live Nation to gain more control over the live entertainment industry. By controlling both live event production and ticket sales, Live Nation could offer a more comprehensive service to its customers, which was essential to compete with other companies in the industry.
The Impact on the Entertainment Industry
The acquisition of Ticketmaster by Live Nation had a significant impact on the entertainment industry. It created a company that had unprecedented control over live event production and ticket sales, which caused concern amongst consumers, artists, and regulators.Critics argued that the merger would lead to a monopoly in the industry, as Live Nation Entertainment Inc. would be able to control prices and terms of access to events. This would harm consumers who would face higher prices and limited options when purchasing event tickets.Artists also expressed concern about the merger, as they feared that Live Nation Entertainment Inc. would have too much control over the industry. They worried that Live Nation would prioritize its own events over those of other promoters, leaving them with fewer opportunities to perform.To address these concerns, the U.S. Department of Justice launched an investigation into the merger to determine if it violated antitrust laws. After a seven-month investigation, the Department of Justice approved the merger with the condition that Live Nation Entertainment Inc. would have to license its ticketing software to rival companies.
Conclusion
The acquisition of Ticketmaster by Live Nation created a dominant force in the entertainment industry. The new company, Live Nation Entertainment Inc., was able to combine live event production with ticket sales, marketing, and distribution, which allowed it to reduce costs and gain more control over the industry.The merger caused concern amongst consumers, artists, and regulators, who feared that it would lead to a monopoly in the industry. However, the U.S. Department of Justice approved the merger with the condition that Live Nation Entertainment Inc. would have to license its ticketing software to rival companies.Today, Live Nation Entertainment Inc. remains the world’s leading live entertainment company, producing and promoting thousands of events each year. Its acquisition of Ticketmaster was a significant moment in the entertainment industry and forever changed the way we buy and attend live events.
