Senators and independent concert promoters took turns at a hearing Tuesday slamming a proposed merger of two of the biggest forces in the music industry -- Ticketmaster Entertainment Inc. and Live Nation Worldwide Inc.
"It seems to be monopolistic, plain and simple," Sen. Charles E. Schumer (D-N.Y.) said. "This is not the American dream, as the companies' witnesses might have you believe."
The Senate's antitrust subcommittee grilled chief executives Michael Rapino of Live Nation and Irving Azoff of Ticketmaster and solicited input from concert promoters on how the industry would be affected.
"This merger is vertical integration on steroids," Jerry Mickelson, chairman of concert promoter Jam Productions in Chicago, told the committee. "The amalgamation of these two companies into one should make them the poster child for why this country needs antitrust laws."
But Rapino and Azoff presented their case as two companies trying to weather the recession as best they could, creating a new model for the music industry in the process.
"The economic foundation that supported artists in the past is crumbling," Azoff said. "We cannot just cling to the old ways. This merger will allow the live music industry to avoid repeating the mistakes of the record industry."
Azoff and Rapino said their companies, by combining, could eliminate $40 million in inefficiencies.
"We have an opportunity to create a truly modern business by merging these companies together, something we can't do alone," Rapino said.
But Mickelson and Seth Hurwitz, co-owner of 9:30 Club and I.M.P. Productions in Washington -- who both use Ticketmaster for their events -- told the committee they feared a merger would result in Live Nation, a competitor, gaining access to their sensitive information and benefiting financially from fees added to their ticket sales.
"Our competitors would be receiving income from every ticket we sell," Mickelson said. "They'd have access to our ticket sales information, they'd have access to our customer databases, they'd have access to the terms of our ticket agreements."
This is a really bad idea to say the least.