February 11, 10

NEWS / Acting Attorney General Dow Announces New Jersey Sign-On To Settlement Restricting Merger of Ticketm

TRENTON – Acting Attorney General Paula T. Dow announced today that New Jersey has signed onto a national settlement with Ticketmaster Entertainment, Inc., and Live Nation that places important restrictions on the merger of the two companies, and will allow concert venues and ticket-buyers to benefit from increased competition in the business of providing primary ticket services.

In late January, the U.S. Justice Department announced a settlement with Ticketmaster and Live Nation that would require the merged firm to license a copy of Ticketmaster’s ticketing software, divest ticketing assets and comply with certain restrictions on its conduct. The settlement resolved an antitrust complaint filed by the Justice Department and 19 states, including New Jersey, with the U.S. District Court for the District of Columbia in Washington, D.C.

The antitrust complaint challenged the original Ticketmaster/Live Nation merger as a threat to competition in the primary ticket services business that would result in higher ticket prices. Ticketmaster is the largest provider of ticket services in the U.S. Live Nation is the second-largest ticket service company, and the largest concert promotion company in the U.S.

In announcing New Jersey’s sign-on to the settlement, Acting Attorney General Dow said the agreement will increase competition for primary ticketing services which, in turn, should benefit New Jersey concert venues and ticket buyers.

“Our chief concern was that the merged firm would, absent the settlement, have market power it could use to harm New Jersey consumers by eliminating the possibility of discounts, reducing ticketing choices and increasing ticket prices beyond the reach of many concert-goers,” said Dow. “We believe that the licensure and divestiture provisions of the settlement will allow for strong competition to Ticketmaster, and that the conduct restrictions will keep the merged firm accountable.”

Under the settlement, which is subject to a public comment period and approval by the court, Ticketmaster must give a five year license of its primary ticketing software to the California-based Anschutz Entertainment Group (AEG), the nation’s second-largest concert promoter and operator of major concert venues throughout the U.S. This will allow AEG to market a competing ticketing system. Within five years, AEG can purchase the Ticketmaster software, elect to create its own software, or obtain ticket services from a ticketing company other than Ticketmaster.

In addition, Ticketmaster must divest Paciolan Inc., a ticket service business that it currently owns, within 60 days to either Comcast-Spectacor or another approved buyer. Comcast-Spectacor has already signed a letter of intent to purchase the assets of Paciolan. Paciolan is used by hundreds of venues around the nation to sell tickets to concerts and other events. Venues that use Paciolan have more flexibility to reduce the ticket service fees that are charged to consumers who buy tickets.

The divestiture of Ticketmaster’s Paciolan holding -- coupled with AEG’s licensure and option to purchase Ticketmaster’s primary ticketing software -- will replace the competitive pressure on Ticketmaster that Live Nation was supposed to provide.

Under the settlement, the merged firm will be prohibited from retaliating against any concert venue owner that chooses to use another company’s ticketing services, or another company’s promotional services.

Additionally, clients who choose to leave the merged firm and use another ticketing service will be allowed to take a copy of their ticketing data. The settlement further requires that firewalls be put in place to prevent the merged firm from using the confidential competitor data of promoters that it gains from its ticketing operations.

Deputy Attorney General Joshua Rabinowitz and Deputy Attorney General Jah-Juin Ho, assigned to the Division of Law’s Consumer Fraud Prosecution Section, represented the State in the Ticketmaster/Live Nation matter.

http://www.nj.gov/oag/newsreleases10/pr20100209c.html