[Federal Register Volume 75, Number 124 (Tuesday, June 29, 2010)]
[Notices]
[Pages 37652-37706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-15686]
[[Page 37651]]
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Part IV
Department of Justice
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Antitrust Division
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United States et al. v. Ticketmaster Entertainment, Inc. et al.; Public
Comments and Response on Proposed Final Judgment; Notice
Federal Register / Vol. 75, No. 124 / Tuesday, June 29, 2010 /
Notices
[[Page 37652]]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States et al. v. Ticketmaster Entertainment, Inc. et al.;
Public Comments and Response on Proposed Final Judgment
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
16(b)-(h), the United States hereby publishes below the comments
(without attachments) received on the proposed Final Judgment in United
States et al. v. Ticketmaster Entertainment, Inc. et al., Civil Action
No. 1:10-CV-00139-RMC, which were filed in the United States District
Court for the District of Columbia on June 17, 2010, together with the
response of the United States to the comments.
Complete copies of the comments with attachments, and the United
States' response, are available for inspection at the Department of
Justice Antitrust Division, 450 Fifth Street, NW., Suite 1010,
Washington, DC 20530 (telephone: 202-514-2481), on the Department of
Justice's Web site at http://www.justice.gov/atr/cases/ticket.htm, and
at the Office of the Clerk of the United States District Court for the
District of Columbia, 333 Constitution Avenue, NW., Washington, DC
20001. Copies of any of these materials may be obtained upon request
and payment of a copying fee.
J. Robert Kramer II,
Director of Operations and Civil Enforcement.
United States District Court for the District of Columbia
United States of America, et al., Plaintiffs, v. Ticketmaster
Entertainment, Inc., et al., Defendants.
Case: 1:10-cv-00139.
Assigned to: Collyer, Rosemary M.
Assign. Date: 1/25/2010.
Description: Antitrust.
Plaintiff United States' Response to Public Comments
Pursuant to the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h) (``APPA'' or ``Tunney Act''), the
United States hereby files the public comments concerning the proposed
Final Judgment in this case and the United States' response to those
comments. After careful consideration of the comments, the United
States continues to believe that the proposed Final Judgment will
provide an effective and appropriate remedy for the antitrust
violations alleged in the Amended Complaint. The United States will
move the Court, pursuant to 15 U.S.C. 16(b)-(h), for entry of the
proposed Final Judgment after the public comments and this Response
have been published.\1\
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\1\ As approved by the Court in a Minute Order dated June 15,
2010, the United States will publish the Response and the comments
without attachments or exhibits in the Federal Register. The United
States will post complete versions of the comments with attachments
and exhibits on the Antitrust Division's Web site at: http://www.justice.gov/atr/cases/ticket.htm.
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I. Procedural History
On January 25, 2010, 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 (the
``States'') filed the Complaint in this matter, alleging that the
merger of Ticketmaster Entertainment, Inc. (``Ticketmaster'') and Live
Nation, Inc. (``Live Nation''), if permitted to proceed, would
substantially lessen competition in the market for primary ticketing
services to major concert venues in violation of Section 7 of the
Clayton Act, 15 U.S.C. 18.\2\ Simultaneously, the United States filed a
Competitive Impact Statement (``CIS''), a proposed Final Judgment, and
a Hold Separate Stipulation and Order signed by the United States, the
States, and the defendants consenting to the entry of the proposed
Final Judgment after compliance with the requirements of the APPA.
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\2\ An Amended Complaint was filed on January 28, 2010, solely
to add the States of New Jersey and Washington as plaintiffs.
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The proposed Final Judgment and CIS were published in the Federal
Register on February 10, 2010. See 75 FR 6,709 (2010). A summary of the
terms of the proposed Final Judgment and CIS, together with directions
for the submission of written comments relating to the proposed Final
Judgment, were published for seven days in The Washington Post from
February 26, 2010, through March 4, 2010. The Defendants filed the
statement required by 15 U.S.C. 16(g) on February 12, 2010. The 60-day
period for public comments ended on May 3, 2010, and twelve comments
were received as described below and attached hereto.
II. The Investigation and Proposed Resolution
A. Investigation
On February 10, 2009, Ticketmaster and Live Nation entered into a
definitive merger agreement. Over the following eleven and a half
months, the United States Department of Justice (``Department'')
conducted an extensive, detailed investigation into the potential
competitive effects of the proposed merger. As part of the
investigation, the Department issued Second Requests and twelve Civil
Investigative Demands (``CIDs'') to the merging parties, as well as
more than fifty CIDs to third parties. The Department considered more
than 2.5 million documents received in response to the Second Requests
and CIDs. More than 250 interviews were conducted with customers,
competitors, and other individuals with knowledge of the industry,
including two commenters here--Jam Productions, Ltd. and the group led
by It's My Party, Inc.--which are competitors and complainants about
the proposed transaction. The investigative team analyzed their
concerns, as well as the views and data presented by hundreds of
others. While the Department was reviewing this transaction, a group of
state Attorneys General and the Canadian competition authorities
conducted their own antitrust investigations. Nineteen states joined
the United States' Amended Complaint and the proposed Final Judgment
resolving the Amended Complaint; no state has filed a separate lawsuit
to block the merger or has opposed the proposed Final Judgment before
this Court. At the conclusion of its investigation, Canada imposed
parallel relief that is substantively identical to that contained in
the proposed Final Judgment.\3\
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\3\ Competition authorities in the United Kingdom also reviewed
the transaction and ultimately cleared the merger without imposing
any conditions; market conditions in the United Kingdom, however,
differ substantially from those prevailing in the United States and
Canada.
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As part of its investigation, the Department considered the
potential competitive effects of the merger on numerous products and
services, customer groups, and geographic areas. For the vast majority
of these, including the provision of services to promote live
entertainment events, the Department determined that the proposed
merger was unlikely to reduce competition substantially. Because
Ticketmaster and Live Nation were the two largest providers of primary
ticketing services, the Department appropriately devoted significant
time and resources to analyzing whether the combination of the parties'
primary ticketing services would likely reduce competition. The United
States concluded that the combination of Ticketmaster and Live Nation
likely would lessen competition in the provision and sale of primary
ticketing services for major concert venues in the United States.
[[Page 37653]]
Primary ticketing is the initial distribution of tickets to an
event. Ticketing companies are responsible for distributing primary
ticket inventory through channels such as the Internet, call centers,
and retail outlets and for enabling the venue to sell tickets at its
box office. The primary ticketing company provides the technology
infrastructure for ticket distribution. Primary ticketing firms also
may provide technology and hardware that allow venues to manage fan
entry at the event, including everything from handheld scanners that
ushers use to check fans' tickets to the bar codes on the tickets
themselves. The overall price a consumer pays for a ticket generally
includes the face value of the ticket and a variety of service fees
above the face value of the ticket. Such fees are most often charged by
the provider of primary ticketing services. The primary ticketing
provider, however, does not set the face value of the ticket. It is set
by the promoter and artist.
The complexity and demands of selling tickets to major concert
venues requires sophisticated primary ticketing services. A major
concert venue's primary ticketing provider must be able to withstand
the heavy transaction volume associated with the first hours when
tickets to popular concerts become available to concert-goers, offer
integrated marketing capabilities, and otherwise have a proven track
record of high quality service. As such, major concert venues have had
few choices for primary ticketing providers. Ticketmaster had a long-
standing track record of filling these needs. When Ticketmaster and
Live Nation announced their merger, Live Nation had recently begun
engaging in primary ticketing services, primarily selling tickets to
concerts at its own venues as a way to demonstrate to other venues that
its primary ticketing platform performed well. No primary ticketing
company other than Ticketmaster and Live Nation had amassed or likely
could have amassed in the near term sufficient scale to develop a
reputation for successfully delivering similarly sophisticated primary
ticketing services.
Primary ticketing services are sold pursuant to contracts
individually negotiated with venues. Because primary ticketing
companies can price discriminate among different venues, the Department
determined that the proposed transaction could affect different classes
of venues differently. Specifically, the Department found that major
concert venues, because of their need for the most sophisticated
ticketing services, have few ticketing options. These venues can be
readily identified, and market power can be selectively exercised
against them. Furthermore, the Department determined that because the
merged firm could price discriminate, any effects of the proposed
transaction on foreign venues would be distinct from any effects on
domestic venues, and thus it was appropriate to include only major
concert venues located in the United States within the relevant market.
After its investigation, the United States determined that the
proposed merger would likely substantially lessen competition for
primary ticketing services to major concert venues in the United
States. As explained more fully in the Amended Complaint and CIS, this
loss of competition would eliminate financial benefits that venues
enjoyed during the period when Live Nation exerted competitive pressure
against Ticketmaster, and would reduce incentives to innovate and
improve primary ticketing services.\1\ As alleged in the Amended
Complaint, the proposed merger of Ticketmaster and Live Nation would
remove Live Nation's competitive presence from an already highly
concentrated and difficult-to-enter market.\2\ The resulting increase
in concentration, loss of competition, and absence of any reasonable
prospect of significant new entry or expansion by market incumbents
likely would result in higher prices for major concert venues and
reduce innovation in primary ticketing services.\3\
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\1\ Amended Complaint ] 40 et seq.; CIS Sec. II(D).
\2\ Amended Complaint ]] 38, 40, 43, 44; CIS Sec. II(D).
\3\ Amended Complaint ] 40 et seq.; CIS Sec. II(D).
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B. Proposed Final Judgment
The proposed Final Judgment is designed to preserve competition in
the market for primary ticketing services to major concert venues in
the United States by requiring divestitures of assets and mandating
certain conduct remedies. First, the proposed Final Judgment creates a
new, vertically integrated primary ticketing company and bolsters
another company to compete against Live Nation Entertainment.\4\
Second, the conduct restraints in the proposed Final Judgment
supplement these divestitures to ensure that competitive ticketing
firms will not be improperly foreclosed from the market by the merged
firm's conduct.
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\4\ Live Nation Entertainment is the name of the newly merged
entity. Throughout this Response, the historical Ticketmaster
ticketing operation is referred to as ``Ticketmaster,'' the artist
management business is referred to as ``Front Line,'' and the
promotions and venue management business is referred to as ``Live
Nation.''
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The proposed Final Judgment establishes Anschutz Entertainment
Group, Inc. (``AEG'') as an entrant into primary ticketing services.
AEG is the second largest promoter in the United States (behind Live
Nation). AEG also owns, operates, or manages more than 30 major concert
venues in the United States, owns part of an artist management firm,
and owns the Los Angeles Kings hockey franchise. Entry will occur via a
two-stage process. In the first part of the process, the merged firm
must provide AEG with an AEG-branded ticketing website based on the
Ticketmaster Host platform, Ticketmaster's primary platform for selling
tickets.\5\ AEG has the right to use the AEG-branded ticketing website
to sell tickets at venues it owns, operates, or manages as well as to
events at any other venues from which AEG secures the right to provide
primary ticketing services. AEG has the freedom to compete with
Ticketmaster on the prices it charges to venues for ticketing services
and on the service fees that are added to a ticket's price.\6\ In the
second part of the process, AEG may exercise an already negotiated
right to acquire a perpetual, fully paid-up license to the then-current
version of the Ticketmaster Host platform, including a copy of the
source code, which the merged firm must install.\7\ The agreement
between AEG and the merged firm contains financial incentives for AEG
to exercise the right. Finally, the proposed Final Judgment prohibits
the merged firm from providing primary ticketing services to AEG's
venues after AEG's right to use the AEG-branded ticketing website
expires, which will take place five years after execution of the
license.\8\ This provision is critical to preserving competition in the
primary ticketing services market, because it guarantees that within
five years, AEG will have to either remain a full fledged primary
ticketing services competitor or bolster another primary ticketing
competitor by using them to meet its ticketing needs.
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\5\ Proposed Final Judgment Sec. IV.A.2.
\6\ Id.
\7\ Id. Sec. IV.A.1.
\8\ Id. Sec. XIII.B.
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The proposed Final Judgment also requires the merged firm to divest
Ticketmaster's entire Paciolan line of business \9\ to an independent
and economically viable competitor in the market for primary ticketing
services to
[[Page 37654]]
major concert venues.\10\ The merged firm has already divested this
business to Comcast-Spectacor, LP (``Comcast-Spectacor''), a
vertically-integrated company whose subsidiary New Era Tickets (``New
Era'') was one of many licensees of the Paciolan platform prior to the
divestiture. In addition to its interest in New Era, Comcast-Spectacor
owns two major U.S. concert venues, a venue management firm that
manages fifteen other major concert venues, the Philadelphia Flyers,
the Philadelphia 76ers, a venue/sports marketing company, and a food
services company whose clients include major concert venues. Comcast-
Spectacor's ticketing business model is different from Ticketmaster's
in that venue clients, rather than Comcast-Spectacor, independently set
service fees and venue clients maintain ownership of their ticketing
data.
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\9\ In 2008, Paciolan directly handled the sale for more than 9
million concert and sporting tickets. It also provided in-house
ticketing solutions for more than 250 clients, including Tickets
West, Comcast-Spectacor's ticketing solution New Era, and numerous
colleges, universities and performing arts centers throughout the
U.S.
\10\ Id. Sec. Sec. IV.E., IV.K.
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The proposed Final Judgment also prohibits the merged firm from
engaging in certain conduct that could, in theory, prevent equally
efficient firms from competing effectively.\11\ The proposed Final
Judgment proscribes retaliation against venue owners who contract or
consider contracting for primary ticketing services with the merged
firm's competitors.\12\ The proposed Final Judgment also prohibits the
merged firm from explicitly or practically requiring venues, or
threatening to require venues, to take their primary ticketing services
in order to be allowed to present concerts Live Nation promotes or
concerts by artists Front Line manages. It likewise prohibits the
merged firm from explicitly or practically requiring venues, or
threatening to require venues, to take concerts the merged firm
promotes or concerts by artists it manages in order to be allowed to
purchase the merged firm's primary ticketing services.\13\ Further, the
Final Judgment prohibits the merged firm from using certain ticketing
data in its non-ticketing business and from providing that data to
internal promoters and artist managers.\14\ Finally, the proposed Final
Judgment mandates that the merged firm provide any current primary
ticketing client with that client's ticketing data promptly upon
request, if the client chooses not to renew its primary ticketing
contract.\15\
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\11\ Id. Sec. IX.
\12\ Id. Sec. IX.A.1.
\13\ Id. Sec. Sec. IX.A.2, IX.A.3.
\14\ Id. Sec. IX.B.
\15\ Id. Sec. IX.C.
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In sum, the perpetual license of the Ticketmaster Host platform,
the divestiture of Paciolan, and the conduct remedies will ensure that
major concert venues will continue to receive the benefits of
competition in the primary ticketing services market that otherwise
would be lost as a result of the merger.
III. Standard of Judicial Review
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty-day comment
period, after which the court shall determine whether entry of the
proposed Final Judgment ``is in the public interest.'' 15 U.S.C.
16(e)(1).
In making that determination in accordance with the statute, the
court is required to consider:
(A) The competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a
determination of whether the consent judgment is in the public
interest; and
(B) The impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and
individuals alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if
any, to be derived from a determination of the issues at trial.
15 U.S.C. 16(e)(1)(A)-(B). In considering these statutory factors, the
court's inquiry is necessarily a limited one as the government is
entitled to ``broad discretion to settle with the defendant within the
reaches of the public interest.'' United States v. Microsoft Corp., 56
F.3d 1448, 1461 (DC Cir. 1995); see generally United States v. SBC
Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (assessing public
interest standard under the Tunney Act); United States v. InBev N.V./
S.A., 2009-2 Trade Cas. (CCH) ]76,736, No. 08-1965 (JR), 2009 U.S.
Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that the
court's review of a consent judgment is limited and only inquires
``into whether the government's determination that the proposed
remedies will cure the antitrust violations alleged in the complaint
was reasonable, and whether the mechanisms to enforce the Final
Judgment are clear and manageable'').
As the United States Court of Appeals for the District of Columbia
Circuit has held, under the APPA, a court considers, among other
things, the relationship between the remedy secured and the specific
allegations set forth in the government's complaint, whether the decree
is sufficiently clear, whether enforcement mechanisms are sufficient,
and whether the decree may positively harm third parties. See
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the
relief secured by the decree, a court may not ``engage in an
unrestricted evaluation of what relief would best serve the public.''
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787,
at *3. Courts have held that:
[t]he balancing of competing social and political interests
affected by a proposed antitrust consent decree must be left, in the
first instance, to the discretion of the Attorney General. The
court's role in protecting the public interest is one of insuring
that the government has not breached its duty to the public in
consenting to the decree. The court is required to determine not
whether a particular decree is the one that will best serve society,
but whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.
Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\16\ In
determining whether a proposed settlement is in the public interest,
the court ``must accord deference to the government's predictions about
the efficacy of its remedies, and may not require that the remedies
perfectly match the alleged violations.'' SBC Commc'ns, 489 F. Supp. 2d
at 17; see also Microsoft, 56 F.3d at 1461 (noting the need for courts
to be ``deferential to the government's predictions as to the effect of
the proposed remedies''); United States v. Archer-Daniels-Midland Co.,
272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court should grant
due respect to the United States' prediction as to the effect of
proposed remedies, its perception of the market structure, and its
views of the nature of the case).
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\16\ Cf. BNS, 858 F.2d at 464 (holding that the court's
``ultimate authority under the [APPA] is limited to approving or
disapproving the consent decree''); United States vs. Gillette Co.,
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the
court is constrained to ``look at the overall picture not
hypercritically, nor with a microscope, but with an artist's
reducing glass''). See generally Microsoft, 56 F.3d at 1461
(discussing whether ``the remedies [obtained in the decree are] so
inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest' ''.
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Courts have greater flexibility in approving proposed consent
decrees than in crafting their own decrees following a finding of
liability in a
[[Page 37655]]
litigated matter. ``[A] proposed decree must be approved even if it
falls short of the remedy the court would impose on its own, as long as
it falls within the range of acceptability or is `within the reaches of
public interest.''' United States v. Am. Tel. & Tel. Co., 552 F. Supp.
131, 151 (D.D.C. 1982) (citations omitted) (quoting United States v.
Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd sub nom.
Maryland v. United States, 460 U.S. 1001 (1983); see also United States
v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985)
(approving the consent decree even though the court would have imposed
a greater remedy). As this Court has previously recognized, to meet
this standard ``[t]he government need not prove that the settlements
will perfectly remedy the alleged antitrust harms, it need only provide
a factual basis for concluding that the settlements are reasonably
adequate remedies for the alleged harms.'' United States v. Abitibi-
Consolidated Inc., 584 F. Supp. 2d 162, 165 (D.D.C. 2008) (citing SBC
Commc'ns, 489 F. Supp. 2d at 17). Therefore, the United States ``need
only provide a factual basis for concluding that the settlements are
reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 489
F. Supp. 2d at 17.
Moreover, the Court's role under the APPA is limited to reviewing
the remedy in relationship to the violations that the United States has
alleged in its complaint, rather than to ``construct [its] own
hypothetical case and then evaluate the decree against that case.''
Microsoft, 56 F.3d at 1459. Because the ``court's authority to review
the decree depends entirely on the government's exercising its
prosecutorial discretion by bringing a case in the first place,'' it
follows that ``the court is only authorized to review the decree
itself,'' and not to ``effectively redraft the complaint'' to inquire
into other matters that the United States did not pursue. Id. at 1459-
60. As this Court recently confirmed in SBC Communications, courts
``cannot look beyond the complaint in making the public interest
determination unless the complaint is drafted so narrowly as to make a
mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
In its 2004 amendments to the Tunney Act,\17\ Congress made clear
its intent to preserve the practical benefits of utilizing consent
decrees in antitrust enforcement, stating ``[n]othing in this section
shall be construed to require the court to conduct an evidentiary
hearing or to require the court to permit anyone to intervene.'' 15
U.S.C. 16(e)(2). The clause reflects what Congress intended when it
enacted the Tunney Act in 1974, as Senator Tunney explained: ``[t]he
court is nowhere compelled to go to trial or to engage in extended
proceedings which might have the effect of vitiating the benefits of
prompt and less costly settlement through the consent decree process.''
119 Cong. Rec. 24,598 (1973) (statement of Senator Tunney). Rather, the
procedure for the public-interest determination is left to the
discretion of the court, with the recognition that the court's ``scope
of review remains sharply proscribed by precedent and the nature of
Tunney Act proceedings.'' SBC Commc'ns, 489 F. Supp. 2d at 11.
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\17\ The 2004 amendments substituted the word ``shall'' for
``may'' when directing the courts to consider the enumerated factors
and amended the list of factors to focus on competitive
considerations and address potentially ambiguous judgment terms.
Compare 15 U.S.C. 16(e) (2004) with 15 U.S.C. 16(e)(1) (2006); see
also SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004
amendments ``effected minimal changes'' to Tunney Act review).
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IV. Summary and Response to Public Comments
During the 60-day public comment period, the United States received
comments from the following firms or individuals: It's My Party,
Inc.,\18\ Jam Productions, Ltd., Jack Orbin, Middle East Restaurant,
Inc., LIVE-FI Technologies, Inc., Kenneth de Anda, Chris Cantz, Joe
Carlson, Don Crepeau, Jason Keenan, Tom Kuhr, and Gary T. Johnson. Upon
review, the United States believes that nothing in the comments
demonstrates that the proposed Final Judgment is not in the public
interest. What follows is a summary of the comments, and the United
States' responses to the concerns raised in those comments.
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\18\ It's My Party, Inc.'s (``IMP'') comment is attached as
Exhibit A. The comment was filed on behalf of a number of firms,
namely IMP, It's My Amphitheatre, Inc., Seth Hurwitz (both of which
are affiliated with IMP), Frank Productions, Inc., Sue McLean and
Associates, and Metropolitan Talent, Inc. The National Consumers
League joined IMP's comment. See IMP Comment at 1 n.1.
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A. It's My Party (``IMP '')
IMP, through its leader, Seth Hurwitz, and various affiliated
companies, is the operator of the 9:30 Club in Washington, DC and the
promoter at Merriwether Post Pavilion, an amphitheater in Columbia,
Maryland. IMP is a competitor of Live Nation Entertainment in both the
concert promotion and venue operation businesses. IMP has also filed an
antitrust lawsuit against Live Nation, Inc. alleging that Live Nation's
pre-merger conduct harmed IMP.
IMP contends that the proposed Final Judgment will not effectively
protect competition in the primary ticketing services market because
the remedy does not address Live Nation Entertainment's ``domination of
the promotion of popular music concerts by major artists and control of
venues capable of hosting concerts by major artists.'' \19\ IMP argues
that Live Nation's vertical integration, culminating in its merger with
Ticketmaster, has resulted in a firm that controls all aspects of the
relationship between artists and their fans.\20\ IMP argues that to
cement its competitive position, Live Nation has improperly expanded
its promotion business by purchasing the rights to artists' entire
tours (or even several tours) in one deal, shutting out regional
promoters such as IMP from the opportunity to bid on individual
dates.\21\ IMP asserts that Live Nation's share of the promotion market
for ``popular music concerts by major artists'' is actually 70% and
that Live Nation Entertainment's dominance in promotions will therefore
enable it to prevent effective competition in the primary ticketing
services market, because ticketing competitors cannot promise to supply
venues with the same breadth of concerts available to Live Nation
Entertainment.\22\ IMP also argues that primary ticketing competitors
cannot succeed if they cannot provide ticketing services to venues
owned by Live Nation Entertainment itself.\23\ IMP argues that if the
merger is to be allowed at all, additional remedies must be imposed to
ameliorate the effect of Live Nation Entertainment's dominance of the
concert business.\24\
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\19\ Id., at 2.
\20\ See id., at 8-9.
\21\ See id., at 9.
\22\ See e.g., id., at 14, 19-20.
\23\ See id., at 24.
\24\ See id., at 26-27.
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IMP's allegations are not new. It articulated these concerns to the
United States on several occasions during the investigation of the
defendants' merger. The United States believes that the proposed Final
Judgment will remedy any loss of competition in primary ticketing
services that would result from the merger. The United States did not
find that, based on the evidence uncovered in the Department's
investigation, the merger would result in harm to any other relevant
market, such as concert promotion, venue services, or venue management,
and therefore does not believe that remedies in such markets are
appropriate.
[[Page 37656]]
1. Effect of Vertical Integration on Primary Ticketing Services Market
Contrary to IMP's assertion, the United States is well aware of the
potential competitive impact of vertical integration on the primary
ticketing services market and designed its remedy with that potential
effect in mind. It is well recognized that vertical integration can
produce procompetitive benefits.\25\ In the present case, vertical
integration of complementary businesses in the live entertainment
industry reduces the number of firms that must be compensated for a
concert. This creates incentives for the vertically integrated entity
to reduce primary ticketing services prices and service fees. The
United States, however, was well aware of the concern that it may
become more important for ticketing service companies to also provide
live entertainment content in order to compete in primary ticketing for
major concert venues. Accordingly, the proposed Final Judgment
establishes AEG--Live Nation's largest competitor in the concert
promotion business--as a credible, vertically integrated competitor in
the primary ticketing services market.\26\ Therefore, to the extent it
becomes important over the next several years for ticketing companies
to provide access to content in order to compete in primary ticketing,
AEG's established concert promotion business will make it well-
positioned to provide a viable competitive alternative to the merged
firm. AEG will also benefit from its long-standing relationships with
venues developed through its concert promotion business and through its
venue management operations. Its venues and its concert promotion
business will also provide scale to AEG's own ticketing business or to
another ticketing rival to Live Nation Entertainment. The availability
of AEG's concerts to its own primary ticketing business or to another
primary ticketer undermines IMP's argument \27\ that the merged firm
will control so much content that venues will be forced to use
Ticketmaster's ticketing services.
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\25\ See Fruehauf Corp. v. FTC, 603 F.2d 345, 351-52 (2d Cir.
1979) (``A vertical merger * * * does not * * * automatically have
an anticompetitive effect * * * or reduce competition * * * '' and
``may even operate to increase competition''); see also, Phillip E.
Areeda & Herbert Hovenkamp, Antitrust Law; An Analysis of Antitrust
Principles and Their Application ] 1020 (3d ed. 2009) (``Antitrust
Law'') (``Most instances of vertical integration, including those
that result from mergers, are economically beneficial.'')''; Michael
Riordan & Steven C. Salop, Evaluating Vertical Mergers; A Post-
Chicago Approach, 63 Antitrust L.J. 513, 522-27 (1995) (discussing a
variety efficiency benefits from vertical mergers, and summarizing
that ``[a] variety of efficiency benefits that can reduce costs,
improve product quality, and reduce prices may ensue from vertical
mergers'').
\26\ IMP itself acknowledges that AEG is Live Nation's most
significant competitor in the concert promotion business. Id. at 21.
\27\ See id., at 14-15, 17-26.
---------------------------------------------------------------------------
The United States was also well aware that there are other avenues
venues may pursue for ticketing services. Venues may increasingly look
to venue management companies to provide a range of services, including
primary ticketing. The sale of the Paciolan ticketing business to
Comcast-Spectacor creates significant additional competitive stimulus
to the ticketing market that will, in combination with the AEG
licensing agreement, ensure that the proposed Final Judgment restores
the competition that may otherwise have been lost as a result of the
merger. Comcast-Spectacor is well-placed to capitalize on the venue
relationships it developed as an existing provider of venue management,
concessions, and fan marketing services. Paciolan and New Era have
historically pursued a differentiated ticketing strategy under which
their venue customers control all ticketing fees. New Era plans to
continue competing using this business model. With its vertically
integrated operation and venue-friendly business model, Comcast-
Spectacor is well-placed to compete against Live Nation Entertainment
following the merger. Comcast-Spectacor already participates in many
aspects of the live entertainment business. Its willingness to invest
in the ticketing business by purchasing Paciolan, and its commitment to
providing a competitive alternative to Ticketmaster, again suggests
that IMP's analysis of the ticketing services market is flawed. If IMP
were correct, Comcast-Spectacor as a venue owner and manager of venues
for third parties, would have no choice but to acquire primary
ticketing services from the merged entity, as it would risk the loss of
all acts promoted by Live Nation by not selecting Live Nation
Entertainment as its ticketer.\28\ Like AEG, Comcast-Spectacor has
fundamentally pursued a competitive strategy at odds with IMP's
predictions of the future of the primary ticketing business.
---------------------------------------------------------------------------
\28\ See id., at 24-25.
---------------------------------------------------------------------------
As described above in Part II.B, the conduct provisions in the
decree will bolster the structural relief that establishes Comcast-
Spectacor and AEG as primary ticketing services competitors. In
particular, Section IX.A of the proposed Final Judgment ensures that
the merged firm cannot retaliate against or refuse to provide concerts
to venues that choose an alternative to Ticketmaster for primary
ticketing services. This and other provisions underscore the carefully
constructed nature of the remedy contained in the proposed Final
Judgment and further belie the argument presented by IMP \29\ that the
United States failed to account for the importance of content or
vertical integration to the primary ticketing services market.
---------------------------------------------------------------------------
\29\ See id., at 14-15.
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2. Effect of Vertical Integration on Concert Promotion
Much of IMP's concerns with Live Nation have nothing to do with the
merger. Ticketmaster was not in the concert promotion business. As the
United States discusses in more detail below in its response to Jam's
comment,\30\ the United States thoroughly investigated the effect of
the vertical merger of Live Nation's promotion business with
Ticketmaster's ticketing and artist management businesses. Based on the
evidence uncovered in the Department's investigation, the United States
did not find that the merger would significantly harm competition in
the concert promotion business.
---------------------------------------------------------------------------
\30\ See infra Sec. IV.B.1.
---------------------------------------------------------------------------
3. The Effect of Live Nation's Concert Promotion Business on Primary
Ticketing
IMP contends that Live Nation dominates concert promotion (and thus
can leverage that dominance into primary ticketing), based on the
allegation that Live Nation has a 70% market share in the market for
the promotion of ``popular music concerts'' by ``major artists.'' \31\
In the United States' investigation of this merger, the government
looked into Live Nation's share of concert promotion. The United States
used data from Pollstar, an aggregator of live entertainment data
widely used by those in the industry. This data showed Live Nation with
a 33% market share of concert revenue at major concert venues. The
United States finds that IMP's market share calculation is not helpful
because it is based on a market definition that is not well-suited to
analyzing how the merger of Ticketmaster and Live Nation would affect
the ticketing business.\32\
---------------------------------------------------------------------------
\31\ Id. at 17-21.
\32\ The United States expresses no view on whether the
provision of promotional services to ``major artists'' for ``popular
music concerts'' could be considered a proper antitrust market in
other contexts.
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First, IMP argues that the market should be restricted to ``popular
music'' as distinct from gospel, jazz, blues, and
[[Page 37657]]
other musical and entertainment genres that are reported to Pollstar as
``concert revenues.'' \33\ To support this distinction, IMP refers to
the cross-elasticity of demand for consumers of different types of
concerts.\34\ However, this is entirely the wrong approach for
analyzing a merger in the market for the provision of primary tickets
services to major concert venues. While consumers may have strong
preferences for particular types of concerts--and for specific artists
within a particular genre--venues purchase primary ticketing services
for the distribution of tickets to concerts. From the perspective of a
venue, the relevant consideration is how much revenue and profit it can
earn from an event, not the genre of music the artist performs. A
gospel show and rock show that earn the same revenues for a venue are
in fact potential substitutes. For example, Merriweather Post Pavilion,
IMP's own venue, hosted a jazz festival the weekend of June 4 and is
hosting a rock festival on June 19. Therefore, it is entirely
appropriate to look at the entire set of entertainment options for
venues in assessing whether Live Nation so dominates concert promotion
that it will restrain competition in the market for primary ticketing
services.
---------------------------------------------------------------------------
\33\ IMP Comment at 19.
\34\ Id. at 18-21.
---------------------------------------------------------------------------
Second, while Live Nation is clearly the largest promoter in the
country, Pollstar figures include Live Nation promotions within its own
venues. Live Nation is essentially the exclusive promoter within its
own amphitheaters and clubs, which account for a substantial portion of
the overall concert sales reported by Live Nation in Pollstar. The
concerts Live Nation promotes internally have never been available to
third party venues. Thus, the more relevant figures are likely to be
Live Nation's share of concert promotion outside of its own venues, as
that share is a better measure of Live Nation's significance as
provider of content to independent venues, and thus of Live Nation's
ability to ``force'' venues to use Ticketmaster after the merger.
According to 2008 Pollstar data, Live Nation in fact only accounts for
23% of the concerts promoted at major concert venues it does not own,
measured by revenue.\35\ Live Nation's leading position in the
promotion market is driven to a large degree by its ownership of a
number of key venues. While the relationship between Live Nation's
venues and its promotion business is relevant to a Live Nation
competitor such as IMP, independent venues are not beholden to Live
Nation for content to nearly the degree that IMP would suggest.\36\
---------------------------------------------------------------------------
\35\ Measured by number of tickets sold, which IMP claims is the
superior measure, Live Nation accounts for just 18% of the concerts
promoted at major concert venues not owned or operated by Live
Nation.
\36\ See IMP Comment at 24-25.
---------------------------------------------------------------------------
Third, IMP contends that only tickets to ``concerts by major
artists (with an average attendance of between 8,000 to 30,000 fans)''
should be counted in calculations of Live Nation's share of the
promotions market.\37\ According to IMP, it is appropriate to focus
exclusively on these ``major artists'' because they are the ones most
likely to appear in amphitheaters. This market share calculation,
however, exacerbates the flaw identified in the previous paragraph by
focusing in on a set of concerts where Live Nation's market share is
exceptionally high due to its ownership of venues, rather than due to
its significance as a promoter for independent venues. This calculation
does not shed any light on the importance of Live Nation's promotion
business to the market for providing ticketing services to non-Live
Nation amphitheaters or to the many other types of concert venues such
as clubs, theatres, arenas, and stadiums that also employ primary
ticketing companies to sell concert tickets. Though IMP excludes
tickets sold at those venues from its calculation of Live Nation's
market share, that choice obscures the relationship between Live
Nation's position as a leading concert promoter and the likely effects
of its merger with Ticketmaster on buyers of primary ticketing
services.
---------------------------------------------------------------------------
\37\ Id. at 20.
---------------------------------------------------------------------------
In the United States' view, IMP not only overstates the strength of
Live Nation's promotion position, but may also overstate the
significance of concert promotion to the overall market for primary
ticketing services. IMP provides no evidence that decisions by venues
in choosing a primary ticketing company will be driven solely or
primarily or even significantly by the number of concerts promoted by
the merged entity.
Before the merger, Live Nation based its entry strategy into the
ticketing business on its ability to promise content to venues. The
United States' Amended Complaint does not argue, however, that this was
or is the only possible strategy for competing in the ticketing
business. For example, the ticketing needs of a venue that hosts
sporting events will be likely driven as much by the needs of the teams
they host as they are by their interest in filling dates between
sporting events with major concerts. A major arena with a professional
basketball and/or hockey team will need its ticketer to handle season
ticket sales of sports tickets and provide marketing support for sports
ticketing sales. Indeed, this is a significant segment of the market,
as sixty-six major concert venues host major league professional sports
teams and many of the remaining major concert venues house other sports
teams (such as minor league hockey franchises or college sports teams)
which demand robust season ticketing abilities.
AEG and Comcast-Spectacor own, operate, and manage professional
sports teams and venues in which professional sports teams play. Given
that, as noted above, many of the major concert venues also host sports
teams, both AEG and Comcast-Spectacor will be well-positioned to
capitalize on their expertise in sports and venue management to compete
for ticketing contracts in these venues. Paciolan's historical strength
is also in providing ticketing for sports franchises; when combined
with Comcast-Spectacor's strength in providing venue management,
concession, and marketing services to arenas and other buildings, the
United States believes the result is a viable competitor that, in
combination with the entry of AEG into primary ticketing, will restore
any competition in primary ticketing that may be lost as a result of
the merger.
The United States respectfully suggests that IMP's analysis of the
market is too focused on IMP's own issues in competing with Live Nation
in the amphitheater business to inform analysis of the merger's likely
effects. IMP exaggerates Live Nation's position in the concert
promotion market by ignoring many venues that purchase primary
ticketing services and many artists that play at those venues. A view
of Live Nation's market position more tailored to assessing the
competitive effects of the proposed merger reveals that AEG and
Comcast-Spectacor can fully compete with Live Nation in the primary
ticketing services market. IMP's comment therefore casts little light
on competition in the actual product market alleged in the United
States' complaint--the provision of primary ticketing services to major
concert venues.
4. Ability To Provide Ticketing Services to Live Nation Venues
IMP contends that Ticketmaster's competitors, including AEG and
Comcast-Spectacor, will be unable to compete in the primary ticketing
market if they are unable to provide primary ticketing services to
venues that are owned or operated by the merged
[[Page 37658]]
firm.\38\ IMP provides no support for this statement other than a
general assertion that without access to Live Nation's venues,
competitors will be unable to penetrate the market and will not be able
to prevent Live Nation from charging ``supra competitive ticket service
fees.'' \39\ The United States concluded that ticketing companies do
not need access to Live Nation's own ticketing volume in order to
accumulate sufficient scale in the ticketing business to provide
competitive pricing to venues. AEG's and Comcast-Spectacor's purchases
of the divestiture assets supports this conclusion. Venues not owned or
operated by Live Nation--including over 400 of the 500 major concert
venues--account for a substantial majority of major concert venues and
revenues and provide a substantial base of business for competing
ticketing companies to target.
---------------------------------------------------------------------------
\38\ IMP Comment at 14, 24.
\39\ Id. at 24.
---------------------------------------------------------------------------
5. IMP's Own Choice of Primary Ticketing Service Provider
IMP's own choice of ticketing provider--and its ability to choose--
underscores the degree to which IMP's concerns are overstated. Shortly
after the Amended Complaint and proposed Final Judgment in this matter
were filed, Seth Hurwitz, the main proprietor of IMP and its
affiliates, announced that he was terminating Merriweather Post
Pavilion's ticketing contract with the local Ticketmaster affiliate and
entering a contract with TicketFly, a recent entrant into the primary
ticketing services market.\40\ At the same time that Mr. Hurwitz
alleges that the merger eliminated competition for primary ticketing
services, IMP left Ticketmaster for a competing ticket company: ``
`Hopefully this move will demonstrate to people it's possible to have a
choice,' he said. `We wanted to make that choice' '' \41\ It is
precisely this choice that the Final Judgment seeks to facilitate,
whether that choice is exercised to select AEG, Comcast-Spectacor,
another ticketing company such as TicketFly, or even Ticketmaster.
---------------------------------------------------------------------------
\40\ See Merriweather drops Ticketmaster, signs with Ticketfly,
Feb. 18, 2010, available at http://www.ticketfly.com/merriweather-post-pavilion-comes-to-ticketfly.
\41\ Id.
---------------------------------------------------------------------------
6. Need for Additional Remedial Measures
IMP asserts that additional remedial measures are required to
protect competition in the primary ticketing market if the merger of
Live Nation and Ticketmaster is permitted. IMP proposes that: (1) The
merged firm be prevented from either offering any inducement to artists
it manages or promotes to appear at venues it controls or punishing an
artist who works with a competing promoter or venue; (2) the merged
firm be prevented from insisting that rival promoters and venue owners
share profits with Live Nation; and (3) the merged firm be prohibited
from promoting or hosting more than 75% of any artist's tour.\42\ None
of these proposals relate to the primary ticketing services market.
Rather, all of them are designed to dramatically alter competition in
the concert promotion and venue operation businesses, markets where the
proposed merger was not challenged by the Department in its Amended
Complaint in this case. Moreover, some of these proposals, such as the
limitations on exclusive promotion contracts, would likely inhibit
efficient competition in the concert promotion and venue operation
markets more than enhance competition. The proposals would prohibit
Live Nation from engaging in potentially efficient vertical integration
or bundling without analysis of whether such conduct has an adverse
effect on competition either in general or in particular circumstances.
---------------------------------------------------------------------------
\42\ IMP Comment at 26-27.
---------------------------------------------------------------------------
IMP also argues that the merged firm should be required ``to return
at the request of any promoter all data relating to concerts for which
Ticketmaster provided the ticketing and to delete any such information
from its electronically stored data and files.'' \43\ The United States
recognizes the value of information about the price and volume of past
ticket sales for making decisions about future concerts, and took this
into consideration in fashioning remedies in this matter. Section IX.C
of the proposed Final Judgment requires that Ticketmaster provide a
copy of ticketing data to ticketing clients if they choose to leave
Ticketmaster, but does not require Ticketmaster to take the additional
step suggested by IMP \44\ and to purge the data from its files.\45\
Aside from the affirmative obligation imposed by Section IX.C, each
party's rights and obligations regarding the ticketing data will be
governed by the contract between Ticketmaster and the venue. The United
States does not believe that IMP's proposal \46\ is necessary to ensure
that venues are able to leave Ticketmaster for alternative ticketing
providers. So long as venues have access to their data, they will be
free to switch ticketing providers.
---------------------------------------------------------------------------
\43\ Id. at 27.
\44\ Id. at 27.
\45\ Instead, Section IX.B of the proposed Final Judgment
protects venue owners who are also independent promoters by
prohibiting the sharing of competitively sensitive client ticketing
data with Live Nation promoters and Front Line artist managers.
\46\ IMP Comment at 27.
---------------------------------------------------------------------------
B. Jam Productions
Jam Productions (``Jam'') is a concert promoter based in Chicago,
Illinois, and a competitor of Live Nation. Jam's comment contends that
the merger is ``vertical integration on steroids'' and will ``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.''
1. The Vertical Integration Concern
While Jam's comment provides more in the way of a list of alleged
past Live Nation misconduct than a cogent analysis of the merger in
light of the antitrust theory and precedent applicable to vertical
mergers, the core argument advanced by Jam is nonetheless clear:
instead of alleging a competitive problem from the combination of two
competing ticketing companies (that is, challenging the deal as an
unlawful horizontal merger), the Department should have brought a case
alleging that competition in non-ticketing markets would be reduced by
the combination of lines of business that do not compete, but where one
line supplies an input for the other (that is, challenging the deal as
an unlawful vertical merger).
This argument, however, is not a valid basis for rejecting a
proposed remedy during Tunney Act review. As explained above, in a
Tunney Act proceeding the Court must evaluate the adequacy of the
remedy only for the antitrust violations alleged in the complaint. See
United States v. Microsoft Corp., 56 F.3d 1448, 1459 (DC Cir. 1995).
The Tunney Act does not usurp the Department's prosecutorial discretion
to choose what type of case to bring; courts ``cannot look beyond the
complaint * * * unless the complaint is drafted so narrowly as to make
a mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
Jam, however, seeks to ``construct [its] own hypothetical case and then
evaluate the decree against that case''--precisely the approach
specifically forbidden in Tunney Act proceedings by the DC Circuit.
Microsoft, 56 F.3d at 1459.
During its investigation, however, the United States did carefully
consider
[[Page 37659]]
Jam's allegations \47\ and determined that it could not prove that the
vertical integration resulting from the merger would significantly harm
competition in the concert promotion market or any market other than
primary ticketing services. To be sure, vertical mergers can reduce
competition under certain circumstances, for example by foreclosing
rivals from access to an input critical to the ability to compete,
raising the costs of rivals by preventing them from achieving efficient
scale, or raising entry barriers. Vertical mergers can, however, also
be procompetitive by bringing together complementary businesses and
making the merged firm a more efficient competitor.\48\
---------------------------------------------------------------------------
\47\ See id. at 6 (acknowledging that during the investigation
JAM raised the same issues with the United States that it provides
in its comments).
\48\ Jam may have been concerned that the merger would make
LiveNation a more efficient competitor to it when it says: ``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.'' Id. at 19. Of
course, having companies become more efficient at providing their
goods or services is generally procompetitive, not anticompetitive.
---------------------------------------------------------------------------
The United States analyzed whether the addition of Ticketmaster's
ticketing business and Front Line artist management business to Live
Nation's concert promotion business would adversely effect competition
in the concert promotion market. The United States concluded this was
unlikely for two primary reasons.
First, although the merged firm will remain an important player in
the artist management business, it will not have the ability to exclude
promotion competitors from the market. Even if, in theory, all artists
managed by Front Line refused to work with promoters other than Live
Nation, a substantial majority of the artists are not affiliated with
the merged firm and will be fully available for competing concert
promoters to present.\49\ Moreover, Front Line is unlikely to withhold
all of the artists it manages from competing promoters. Front Line has
no legal right to dictate to its artists which promoters they can use.
In fact, Front Line has a fiduciary obligation to obtain the best deals
for its artists, regardless of the interests of other Front Line-
affiliated companies. In addition, artist management services are
typically provided pursuant to agreements that can be terminated by the
artist at will. If the merged firm acted or threatened to act contrary
to the interests of its managed artists, the artists could simply sign
with another artist manager. There are countless managers capable of
handling acts of all sizes; indeed, some of the largest artist
management firms represent only one artist. In light of these factors,
the United States concluded it was unlikely that the combination of
Front Line with Live Nation restrict competition in the concert
promotion business.
---------------------------------------------------------------------------
\49\ According to Pollstar data, Front Line artists accounted
for just under 25% of gross sales for the top 50 tours in 2008 in
North America. Including artists subject to long-term ``360-degree''
promotional agreements with Live Nation raises the merged firms'
share to approximately 30%.
---------------------------------------------------------------------------
Second, artists would have the ability and incentive to prevent the
merged firm from exercising market power in concert promotion. There
are two primary ways that the merged firm could attempt to exercise
such market power: (1) Reducing compensation paid to artists (or
otherwise adversely altering the terms on which promotional services
are provided to artists); or (2) restricting output--i.e., the number
of concerts--in an effort to raise prices to consumers. In both cases,
artists would have the incentive to prevent the merged firm from
harming their own economic interests. Artists would also have the
ability to turn to a large number of competing concert promoters,
including AEG and many regional promoters, who would gladly seize on
the opportunity to expand their promotion business at the expense of
the merged firm.
In addition to considering the impact of the merger on the concert
promotion market, the United States also analyzed the possibility that
the merger would reduce competition in the market for operating venues.
The United States did not rule out the possibility that Live Nation's
ownership of many key venues throughout the country could give the
merged firm some market power. However, Ticketmaster owned no venues
and therefore the merger does not result in any increase in the number
of venues owned or operated by Live Nation. In other words, whatever
market power Live Nation had in concert promotion or venues before the
merger would not be enhanced by its merger with Ticketmaster.
Therefore, the addition of Front Line and the Ticketmaster ticketing
business to Live Nation seems unlikely to alter the competitive
dynamics in the venue market. As noted above, Front Line artists
account for a fairly modest share of the concert business, and the
merged firm does not ``control'' the Front Line artists to the degree
that it can prevent them from performing at competing venues.
Contrary to Jam's contention, the Supreme Court's 1948 Paramount
decision does not compel the United States to challenge this merger
under stare decisis.\50\ In Paramount, the Supreme Court was not
determining the effects of a vertical merger. Rather it was
fashioning a remedy for a long-running price fixing agreement among
competing movie studios that had a vertical aspect in that the movie
studies used their ownership of movie theaters to facilitate their
price fix. In that context, the Supreme Court instructed that the
court-ordered remedy should be tailored to the anticompetitive
conduct at issue and, under the facts in that case, determined that
the defendant studios had to divest themselves of their movie
theaters in order to ``uproot'' the long-running price fixing
agreement. In this case, consistent with Paramount, the United
States fashioned a remedy that was tailored to the anticompetitive
conduct alleged in the Amended Complaint.\51\
---------------------------------------------------------------------------
\50\ Jam Comment at 22 (``So the lawyers who work for the US
government are consciously choosing the [sic] forget about the Stare
Decisis doctrine they are all taught in law school.'') (citing
United States v. Paramount Pictures, Inc., 334 U.S. 131 (1948)).
\51\ Jam's citations to Eastman Kodak v. Image Technical Servs.,
504 U.S. 451 (1992) and Complaint, United States v. MCA, Civ. No.
62-942-WM (filed July 13, 1962) are similarly not instructive.
Eastman Kodak is not a merger case and MCA was a consent decree
designed to address a long-running anticompetitive conspiracy, only
one part of which involved a vertical merger.
---------------------------------------------------------------------------
2. Adequacy of Consent Decree Provisions
Jam contends that the anti-retaliation provision of the proposed
Final Judgment, Section IX.A, will be difficult to enforce.\52\ The
United States does not agree. Section XI of the proposed Final Judgment
contains robust mechanisms enabling the United States to investigate
any potential violations of the proposed Final Judgment's terms. The
United States also has significant experience in enforcing a similar
anti-retaliation provision in the Final Judgment in United States v.
Microsoft.\53\
---------------------------------------------------------------------------
\52\ Jam Comment at 20.
\53\ Final Judgment, United States v. Microsoft, Civ. No. 1:98-
cv-01232 (D.D.C.) (entered Nov. 12, 2002). The Microsoft Final
Judgment prohibits the company from retaliating against any computer
software or hardware company that works with a competitor to
Microsoft's Windows operating system or its related platforms. Id.
Sec. Sec. III.A, III.F.1. The United States has effectively
enforced these provisions of the Microsoft Final Judgment with
minimal difficulty and controversy.
---------------------------------------------------------------------------
Jam contends that AEG and Comcast-Spectacor may not succeed due to
Ticketmaster's ``superior technology'' and the vertical integration of
Ticketmaster and Live Nation.\54\ However, Ticketmaster's software will
power the AEG-branded website in the first stage of the
divestiture,\55\ and AEG has the right to obtain a perpetual license to
Ticketmaster's software in the second stage.\56\ Consequently, AEG will
[[Page 37660]]
be well-positioned to provide a technologically competitive alternative
to Ticketmaster. AEG is also a competitor in the concert promotion
business with access to content, as the United States explains above in
response to IMP's comments. Comcast-Spectacor, which owns and operates
a number of major concert venues, will also be a vertically integrated
primary ticketing competitor. For these reasons, that the proposed
Final Judgment will ensure that AEG and Comcast-Spectacor will be
robust competitors in the ticketing business.
---------------------------------------------------------------------------
\54\ Jam Comment at 21.
\55\ Proposed Final Judgment Sec. IV.A.2.
\56\ Id. Sec. IV.A.1.
---------------------------------------------------------------------------
C. Jack Orbin
Jack Orbin is the founder and President of Stone City Attractions,
a regional concert promoter in the Southwestern United States that
competes with Live Nation. Orbin contends that the proposed Final
Judgment will ``drive independent concert promoters out of business''
and will reduce competition in the ``live entertainment industry.''
\57\ Orbin argues the proposed Final Judgment suffers from three
faults: (1) ``It fails to secure relief for the consumer by eliminating
competition of independent concert promoters''; (2) ``The relief fails
to ensure adequate competition for primary ticket sales and for concert
promotion, and is insufficient to allow entry into these markets''; and
(3) ``It fails to adequately prevent [the merged firm] from acquiring
customer data from independent concert promoters.'' \58\ As noted
above, these arguments are not a proper subject for Tunney Act review
because they assert that the United States should have challenged the
merger on different grounds than those alleged in the Amended
Complaint.\59\
---------------------------------------------------------------------------
\57\ Orbin Comment at 3 (attached as Exhibit C).
\58\ Id. at 4.
\59\ See United States v. Microsoft Corp., 56 F.3d 1448, 1459
(DC Cir. 1995).
---------------------------------------------------------------------------
To the extent the comment relates to the market for primary
ticketing services, it does not raise issues that suggest that entry of
the proposed Final Judgment would not be in the public interest.\60\
Orbin assumes, without support, that Comcast-Spectacor will be unable
to expand the use by venues of the Paciolan platform beyond the venues
in which it is currently used.\61\ However, Paciolan is an existing
successful ticketing platform that will now be independent of
Ticketmaster and able to compete with Ticketmaster for primary
ticketing services contracts. Paciolan has a large client base that
includes major concert venues (and numerous other venues) and offers a
completely different pricing model from Ticketmaster, enabling the
venue to control all service fees, which will put it in a strong
position to provide a competitive alternative to Ticketmaster.
---------------------------------------------------------------------------
\60\ Orbin Comment at 5-6.
\61\ Id.
---------------------------------------------------------------------------
Orbin is also ``very skeptical'' that AEG will be able to succeed
as a primary ticketer.\62\ Orbin contends that because the proposed
Final Judgment requires Ticketmaster to license its Host platform to
AEG, that AEG will be ``fully beholden and dependent on Ticketmaster.''
\63\ This is not accurate. AEG has the right to obtain a copy of the
Ticketmaster Host Platform and run it on its own systems.\64\ During
the transition period when Ticketmaster operates a private label
ticketing service on behalf of AEG, the proposed Final Judgment
prohibits Ticketmaster from impeding AEG's ability to compete.
Specifically, Section IV.A.2 requires Ticketmaster to provide an
operational system within six months with a website that has an AEG-
determined branding, look, and feel; compels Ticketmaster at the
request of AEG to post links on its website to events sold on the
private label ticketing service; and explicitly prohibits Ticketmaster
from having any right or ability to set the ticketing fees charged by
AEG. If Ticketmaster does not comply, the United States can and will
move the Court to enforce the provisions of Section IX.A through civil
and criminal contempt proceedings, as appropriate.
---------------------------------------------------------------------------
\62\ Id. at 6.
\63\ Id. at 6.
\64\ Proposed Final Judgment Sec. IV.A.1.
---------------------------------------------------------------------------
Orbin argues that the proposed Final Judgment itself facilitates
additional vertical integration and will make it more difficult for
non-vertically integrated firms to compete.\65\ Vertical integration,
however, is merely one strategy for successful competition in the
primary ticketing business. The proposed Final Judgment ensures there
will be two significant competitors to Ticketmaster that offer
different value propositions through their respective areas of
expertise. So long as competition is restored to the primary ticketing
market, ticketing companies will be able to compete along a wide range
of attributes. For example, some competitors may focus on the
additional products they can offer in conjunction with primary
ticketing, while others may specialize in innovative ticketing software
that, standing alone, provides significant value to venues.
---------------------------------------------------------------------------
\65\ Orbin Comment at 6.
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Finally, Orbin contends that the firewall established by Section
IX.B is too limited to protect the data of independent concert
promoters, especially in comparison to a firewall adopted in a recent
FTC decree involving PepsiCo, Inc., and that it lacks ``any mechanism
[for] policing the firewall.'' \66\ As an initial matter, the firewall
set forth in Section IX.B prohibits the sharing of information between
Live Nation Entertainment's ticketing business and its promotions and
artist management businesses. Live Nation has technical safeguards in
place to prevent the disclosure of sensitive information to those not
appropriately authorized to access it. Live Nation also has created a
corporate policy governing access to this information, disseminated
that policy to all employees, and instituted a training program to
ensure that those with access to sensitive data understand and uphold
their obligations. Since the entry of the temporary order requiring the
merged entity to comply with the proposed Final Judgment, the
Department has been closely monitoring the merged entity and its
ongoing efforts to develop methods to audit compliance and to submit to
the Department detailed annual reports about such compliance.
---------------------------------------------------------------------------
\66\ Id. at 7 (citing In the Matter of PepsiCo., Inc., FTC File
No. 091 0133 (Feb. 26, 2010) (attached to Orbin Comment)).
---------------------------------------------------------------------------
Orbin wrongly contends that the proposed Final Judgment lacks ``any
mechanism of policing the firewall.'' Section XI of the proposed Final
Judgment provides the United States with a full panoply of tools to
ensure compliance with the firewall, including the ability to demand
documents and interview or depose any employee. The United States may
also require the merged firm to provide written reports, including an
independent audit or analysis, on any matters relating to the proposed
Final Judgment. As discussed above, the United States has already
engaged with the parties on the exact mechanisms in place to ensure
compliance with the firewall, and the United States is confident that
the proposed Final Judgment provides it with all the tools it needs to
enforce the firewall provision.
A comparison of the firewall in this settlement to that in the FTC
PepsiCo case is not particularly instructive. Unlike in PepsiCo, the
firewall in this case is not the central relief contained in the
proposed Final Judgment. The two divestitures are the core relief and
the behavioral remedies are designed to supplement that relief in the
proposed Final Judgment. This is a result of the fact that, unlike in
PepsiCo, the United States did not allege as a theory of harm in its
Amended Complaint that a
[[Page 37661]]
vertical merger would result in an anti-competitive information
exchange. The Department instead alleged that the merger would
eliminate direct, horizontal competition between Ticketmaster and Live
Nation in the provision of primary ticketing services to major concert
venues.
D. Middle East Restaurant, Inc.
Middle East Restaurant, Inc. (``Middle East Restaurant'') operates
a restaurant and night club in Cambridge, Massachusetts, and competes
against Live Nation in the Boston area.\67\ Ticketmaster provides
primary ticketing services to the company.\68\ Middle East Restaurant
requests that the proposed Final Judgment be modified to allow
Ticketmaster's existing ticketing clients to terminate their contract
and sign with a competing ticketing company.\69\ Middle East Restaurant
is concerned that it will be at a competitive disadvantage with its
promotions/venue competitor in the concert business providing its
ticketing services and therefore profiting from its concerts and
potentially having access to its data.\70\
---------------------------------------------------------------------------
\67\ Middle East Restaurant Comment at 1 (attached as Exhibit
D).
\68\ Id.
\69\ Id.
\70\ Id.
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Middle East Restaurant does not allege that its proposal is related
to competition in the ticketing market. Moreover, it is not necessary
to allow existing Ticketmaster clients to terminate their contracts in
order to restore competition in the primary ticketing market. Since the
average ticketing contract is three to five years in length, every year
there is a substantial volume of contracts up for bid and available to
be pursued by AEG, Comcast-Spectacor, and other ticketing competitors.
Finally, while Middle East Restaurant contends there are ``no systems
or penalties in place to protect The Middle East's customer's data,''
\71\ the firewall provision set forth in Section IX.B will prevent its
ticketing data from being shared with promotions personnel within the
merged entity.
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\71\ Id.
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E. Additional Comments
Finally, the United States received comments from LIVE-FI
Technologies, Inc. and the following individuals: Kenneth de Anda,
Chris Cantz, Joe Carlson, Don Crepeau, Jason Keenan, Tom Kuhr, and Gary
T. Johnson (collectively ``citizen complainants'').\72\ LIVE-FI's
comment argues that the proposed Final Judgment: (1) ``Omit[s] all
discussion of the negative anticompetitive impact the merger will have
upon live event and recording distribution particularly electronic
broadcasts and transmissions;'' \73\ (2) hurts small companies because
the divestiture assets were divested to large companies; \74\ and (3)
that through it this Court has ``failed to adopt explicit protocols and
safeguards to ensure that private litigants and smaller entities
maintain equal and fair access to the Courts to protect their rights
and remedies against the individual defendants and the merged entity.''
\75\ The citizen complainants generally argue that they paid high
service fees, paid hidden service fees, that the merged entity does not
make all seats at concerts available for purchase, that the merged
entity is a monopoly, and/or that the Department of Justice generally
failed to protect consumers. None of these comments raise any
substantive issues regarding the efficacy of the relief contained in
the proposed Final Judgment to remedy the competitive harm to the
primary ticketing services market alleged in the Amended Complaint.
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\72\ These comments are attached Exhibits E through L.
\73\ LIVE-FI Comment at 1.
\74\ Id. at 2.
\75\ Id.
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V. Conclusion
After careful consideration of the public comments, the United
States concludes that entry of the proposed Final Judgment will provide
an effective and appropriate remedy for the antitrust violations
alleged in the Amended Complaint and is therefore in the public
interest. Accordingly, after the comments and this Response are
published, the United States will move this Court to enter the proposed
Final Judgment.
Dated: June 21, 2010.
Respectfully submitted for plaintiff United States.
Aaron D. Hoag,
Ann Marie Blaylock (DC 967825),
Attorney, U.S. Department of Justice, Antitrust Division, 450 Fifth
Street, NW., Suite 4000, Washington, DC 20530. Telephone: (202) 514-
5038. Fax: (202) 514-7308. E-mail: [email protected].
In the 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.
Case: 1:10-cv-00139.
Assigned to: Collyer, Rosemary M.
John R. Read, Esquire,
Chief, Litigation III Section, Antitrust Division, United States
Department of Justice, 450 Fifth Street, NW., Suite 2000, Washington,
DC 20530.
It's My Party, Inc. (``I.M.P.''), It's My Amphitheatre, Inc.
(``I.M.A.''), Seth Hurwitz, Frank Productions, Inc., Sue McLean and
Associates, Metropolitan Talent, Inc., each of which promotes, and/or
operates or books venues for, popular music concerts, and the National
Consumers League \1\ (collectively, the ``Objectors'') herewith object
to the Proposed Consent Judgment between the plaintiffs in the above-
captioned action and Live Nation, Inc. (``Live Nation'') and
Ticketmaster Entertainment, Inc. (``Ticketmaster'').
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\1\ The National Consumers League (NCL) is part of the coalition
of consumer groups, independent promoters, ticket sellers and 50
members of Congress opposing the merger between Ticketmaster and
Live Nation. Despite our coalition's efforts, the Department of
Justice went forward in approving the merger. While it joins in
these objections, the NCL also notes that, as a consumer
organization, it believes the merger should not have been approved
and that further concentration of the live performance ticketing
industry will ultimately prove harmful to consumers, who will see a
steady rise in the cost of concerts and other live events, an
increase in vaguely defined fees and charges, which have
dramatically pushed up the price of tickets over the past decade.
Indeed, the average price of a ticket to one of the top 100 tours
soared to $62.57 in 2009 from $25.81 in 1996, according to Pollstar,
far outpacing inflation. (David Segal, Calling Almost Everyone's
Tune, N.Y. Times, April 23, 2010.)
Indeed, since the merger's approval in late January of 2010,
Live Nation Entertainment, Inc. flexed its dominance. It bid on
virtually every artist touring in 2010 and the booking agents for
popular artists, such as Rascal Flatts, Brad Paisley, Iron Maiden,
311 and Jimmy Buffett, did not even solicit competitive offers for
this 2010 summer concern season. This conduct has already impacted
ticket prices and ticket servicing fees. For instance, the top
ticket price for the Lady Gaga tour has increased by approximately
133% in the last three months.
NCL supports efforts to stop this merger because of its
contribution to the increased concentration of the live event
industry in the hands of a few powerful forces and the resulting
decrease in customer services and increase in prices to consumers.
---------------------------------------------------------------------------
Preliminary Statement
The Department of Justice (``DOJ'') and several state Attorneys
General (collectively, the ``Government'') have challenged the merger
of Live Nation and Ticketmaster to form Live Nation Entertainment, Inc.
(``LNE'') on the grounds that this merger would substantially lessen
competition in the market for the provision of primary, remote
ticketing services in the United States. The Government has resolved
this challenge by agreeing to a Proposed Consent Judgment (the
``Consent Judgment'') whose principal terms require Ticketmaster to
grant a perpetual license to its ticketing software and divest its
entire Paciolan
[[Page 37662]]
business to independent companies. The stated purpose of these
divestitures is to create two independent firms capable of competing
with LNE, particularly in the market for the remote, primary sale of
tickets to what the Government characterizes as major concert venues.
The Objectors challenge the Consent Judgment because the proposed
remedial relief will not achieve the stated goal of facilitating
effective competition with LNE in the primary, remote sale of tickets
to popular music concerts at major concert venues. The Consent Judgment
does not take into account LNE's domination of the promotion of popular
music concerts by major artists and control of venues capable of
hosting concerts by major artists. The vast majority of all popular
music concerts by major artists will be promoted by LNE and held at LNE
controlled venues at which its remote, primary ticketing services will
be utilized without violating the Consent Judgment. The companies to
which Ticketmaster's ticketing software and Paciolan business are
divested will be unable to compete effectively to provide remote,
primary ticketing services for popular music concerts and LNE will
remain the dominant competitor in the market. LNE is already exercising
this market domination to eviscerate the remedial relief imposed under
the Consent Judgment. The continuation of the merged company's dominant
position in the market will have significant anticompetitive
consequences, including continued supra-competitive ticketing services
fees and charges.
If the Government remains unwilling to challenge the merger,
additional remedial measures are necessary. To create meaningful
competition in the market for remote, primary sales of tickets to
popular music concerts, LNE should be precluded from: (i) Promoting
more than seventy-five percent (75%) of major popular music artists'
tours; (ii) tying or bundling its promotional services and venue
services; (iii) tying or bundling the appearance of major popular music
artists at one LNE controlled venue to the artist's appearance in LNE
controlled venues in different geographic markets; and (iv) retaliating
against or penalizing any artist who elects to utilize a rival promoter
or venue during the course of a LNE sponsored national or multi-
appearance tour. LNE should also be required to return at the request
of any promoter or venue any customer or other competitive information
Ticketmaster maintained from concerts for which it provided ticketing
services for the promoter or venue. These remedial measures will
facilitate the ability of independently owned and operated venues,
which will likely utilize rival ticketing companies, to compete for the
artists who drive the live music industry.
Supplemental Market Analysis
A. The Popular Music Concert Industry
While the Government's Complaint and Competitive Impact Statement
analyze the live entertainment industry, they focus upon the specific
market for the remote, primary sale of tickets to music concerts.
However, the implementation of effective remedial action for the
anticompetitive effects the Government has recognized will result from
the Live Nation--Ticketmaster merger requires a deeper analysis of the
promotional and venue services markets. This analysis establishes that
Live Nation had far greater pre-merger power in those markets than the
Government recognizes and that the merger has enhanced LNE's dominance
in these markets. This market domination will strangle nascent
competition in the market for remote primary ticketing services.
The popular music concert industry has its roots in the technical
innovations that led to the growth of the radio and television industry
and a consumer mass market for quality recorded music. To drive record
sales, record companies sponsored concert tours across the country.
Radio airplay, exposure on nationally broadcast television shows, such
as American Bandstand and The Ed Sullivan Show, and record sales led to
nationwide notoriety for highly talented artists performing the genre
of music in vogue at the time. As artists' popularity grew, they began
to attract substantial audiences for their live performances.
The style of music in vogue has evolved over time. In the 1950s,
popular music was evolving into ``rock n' roll'' (or just ``rock''), a
blend of rhythm and blues and country music. This musical genre became
widely popular among teens and young adults in the 1950s. Rock artists
became so popular that they attracted substantial audiences for their
live performances and touring provided them with a significant source
of revenue. As a result, artists began to tour independently of their
recording companies. For several decades, only rock or folk (as this
style of music gained wide popularity in the 1960s) qualified as
popular music when measured by record sales, concert attendance or the
amount and breath of radio play. Recently, rock music has splintered
into different genres, including classic (of the style from the 1960s
through 1970s), ``hard'' (less melodic) and alternative rock, and into
a general category of ``pop'' (electric guitar and organ and drum
dominated music). Additionally, country music has spread from its roots
in the south and southwest of the United States to gain mainstream
acceptance throughout the country (see, CNNMoney.com, Cashville USA \2\
(Ex. ``A'' hereto)), and the hip-hop and rap styles of music developed
and became popular among teens and preteens. Other styles or genres of
music, including jazz, blues and gospel, while capable of drawing
significant numbers of fans, are popular only in one region of the
country or among a segment of the population, so that they draw mass
audiences, at most, only in limited areas or for only a few
performances a year. Similarly, symphony orchestra performances and
opera appeal to a small segment of the population, require unique
venues,\3\ and promoters are not usually involved with these events.
---------------------------------------------------------------------------
\2\ Found at http://money.cnn.com/magazines/fortune/fortune_archive/2007/01/22/8397980/index.htm.
\3\ As symphonies are generally performed with no or minimal
amplification, they are generally only conducted at concert halls
with highly tuned acoustics. Symphony orchestras may perform summer
concerts at general music venues, usually amphitheatres, but do not
have a sufficient breath of appeal to draw mass audiences to
multiple performances and do not appeal to most popular music fans.
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As the Government recognizes (Complaint, ]] 15-19), a separate
defined market developed for what are referred to hereinafter as
``popular music concerts by major artists'' with ``popular music''
defined as that genre of music of broad popularity and ``major
artists'' defined as those artists performing in a popular music genre
with sufficient talent to generate a mass audience. Local entrepreneurs
began to promote concerts, which entailed advertising and marketing the
concert in their region or city and often assuming the financial risk
of the concert. As the industry developed, artists engaged a booking
agent to schedule and route a tour. Booking agents would contact local
promoters in each city or region in which the artist was considering
appearing and solicit bids to promote the concert in their area.
Initially, concerts were held in theatres utilized for plays or other
such facilities and, as rock and folk artists grew in popularity,
expanded to indoor sports arenas with seating for up to 30,000 fans
and, in some instances, in outdoor sports stadiums with seating
capacities in excess of 60,000 fans. Independent
[[Page 37663]]
companies were formed to provide remote (at locations other than the
venue hosting the concert) ticket sales.
As the popular music concert market developed, facilities designed
and intended for use solely as venues for live popular music concerts
were constructed throughout the country, primarily in large urban
areas. The most prevalent type of venue constructed for live popular
music concerts are outdoor amphitheatres, with a seating capacity
generally between 8,000 and 25,000 fans spread over designated seating
areas (usually under cover) and large lawn areas. These facilities have
become the dominant venues for popular music concerts because, as they
are constructed to host music concerts, they have good sight lines,
acoustics (although not to the level of a symphony hall) and staging.
Conversely, arenas and stadiums are primarily constructed for sporting
events and are generally not desirable venues in which to view a
concert.\4\ Amphitheatres also enjoy the advantages that: (a) Fans
enjoy attending concerts outdoors and mingling in the lawn section
before and during the concert; (ii) they are more flexible than arenas
and certainly stadiums in the size of the shows they can handle because
they are less costly to operate, lawn seating allows amphitheatres to
approach the seating capacity of indoor sports arenas while fans at
less popular shows spread out in the lawn areas making the show seem to
have a larger attendance; and (iii) attendance at amphitheatres tends
to be higher because fans of limited means can purchase a lawn ticket
at a reduced price and still obtain a good vantage by arriving early
and are not locked into undesirable seats.
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\4\ An artist might prefer an indoor venue if the performance
includes a light show or has special stage requirements. This may
occur only a few times a year.
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The artist is the bedrock of the popular music concert industry as
it is the artist that draws the fans. It is commonly recognized that
there are less than one hundred artists who can attract an average of
8,000 to 30,000 fans during a national concert tour. In its World
Industry Report, Promoters of Performing Arts, Sports and Similar
Events with Facilities in the U.S., IBISWorld states that, in 2005, the
top 100 tours comprised 67% of the total domestic concert revenues. LNE
recognizes the limited number of major artists and has centered its
entire business model around controlling them. As its Brad Wavra,
Senior Vice-President of Live Nation's Touring Division, stated:
``[t]here are only a handful of great artists out there that can do
10,000; 12,000; 15,000 tickets in 40 cities across the country.
Everybody knows who they are, they're historic artists, legendary
artists. So, when they're on a touring cycle, you know, we all want to
get them to come play for us.'' (Transcript of Artist House Music's
Interview of Brad Wavra, Ex. ``B'' hereto.)
B. Live Nation Conquerors Popular Music Concerts By Major Artists
In approximately 1997, SFX Entertainment, Inc. (``SFX'') began
acquiring local concert promoters to develop a promotional company of
national scope. For example, SFX acquired Bill Graham Presents,
Electric Factory Concerts, Fey Concerts, Pace Concerts, Cellar Door and
the promotional companies of Jules Belkin and Don Law. As it expanded
nationally, SFX introduced a fundamental change in the market for
concert promotion by promoting multi-appearance concert tours. Local
promoters struggled to compete against SFX because it submitted offers
for the entire tour, which promoters operating in only one city or
region found difficult to match. At a competitive disadvantage, local
promoters were unable to survive and became ripe for acquisition.
In 2000, Clear Channel Communications, Inc. acquired SFX and
changed the name of the Company to Clear Channel Entertainment. Clear
Channel Entertainment continued to acquire promoters on the way to
building a promotional company of national scale and expanded to the
point that it could promote artists' entire national tours. Clear
Channel Entertainment also acquired control of concert venues either by
purchasing them, entering into long term lease relationships or
executing management and/or exclusive booking agreements. Clear Channel
Entertainment directed artists that it promoted to appear at venues it
owned, leased, managed or exclusively booked.
This business practice placed promoters at an ever increasing
competitive disadvantage because it was impossible for local promoters
to bid against national tour offers. As Clear Channel Entertainment
generally would not allow artists promoted by its competitors to appear
at its venues, promoters were also denied access to venues at which to
produce concerts. Independent venue owners and operators were placed at
a competitive disadvantage as well because they were denied the ability
to compete to provide venue services to artists Clear Channel
Entertainment promoted. Facing an insurmountable competitive
disadvantage, many more promoters and venue owners became ripe for
acquisition by Clear Channel Entertainment.
Several antitrust actions were filed against Clear Channel
Communications and Clear Channel Entertainment claiming that they had
unlawfully acquired monopoly power in the market for the promotion of
popular music concerts and engaged in numerous anticompetitive actions
to maintain and exploit this power. Nobody In Particular Presents Inc
v. Clear Channel Communications Inc., 311 F. Supp. 2d 1048 (D. Colo.
2004); In Re Live Concert Litigation, 247 F.R.D. 98 (C.D. Cal. 2007);
JamSports & Entm't, LLC v. Paradama Prods., 382 F. Supp. 2d 1056 (N.D.
Ill. 2005). In Nobody in Particular Presents, the Court held that
plaintiffs had established a genuine issue of material fact in support
of their claims that Clear Channel had used its monopoly power in the
market for the broadcast of rock music to force artists to utilize
Clear Channel Entertainment's promotional services. The Court found
that plaintiffs had established, at least, a prima facie case that
Clear Channel refused to advertise concerts promoted by anyone other
than Clear Channel Entertainment and to provide crucial radio play to
artists who utilized rival promoters.
In the wake of these claims, Clear Channel spun Live Nation off
into a separate, publicly traded company in 2005. At that time, Live
Nation was the largest promoter of live popular music concerts in the
United States. Recognizing the central importance of control of the
artist, Live Nation soon developed a business plan of controlling the
entire interface between popular music artists and their fans by
integrating concert promotion, the operation of music concert venues,
merchandising, sponsorships and ancillary rights. This plan is openly
discussed in Live Nation internal documents, such as the attached flow
chart in which Live Nation touts its ``model transformation'' as
``Branded Vertically Integrated Live.'' (Ex. ``C'' hereto.) In a
separate document, Live Nation refers to its vertical integration of
the concert industry as ``Creating the Artist-to-Fan Platform.'' (Ex.
``D'' hereto.)
In furtherance of this business plan, Live Nation expanded the
number of national tours it promotes, offering national tour deals to
all or substantially all of the highest grossing artists touring in any
one year. To induce artist participation in these tours, Live Nation
offered supra competitive shares of the
[[Page 37664]]
concert revenues, at times paying artists more than 100% of the ticket
sales. It insisted on control of the entire tour and that the artist
appear only in venues that Live Nation controlled through ownership,
lease, management or exclusive booking contracts. It was crucial for
the artists to appear at Live Nation controlled venues not only to
implement its plan to control the ``artist-to-fan'' platform, but also
because Live Nation profits only upon concession sales, parking fees
and merchandising fees. Live Nation's Chief Executive Officer admitted
while testifying before the Antitrust Sub-Committee of the Senate
Judiciary Committee that Live Nation loses money on concert promotion
and profits only through sales at its venues. House Judiciary
Subcommittee on Courts and Competition Policy Holds Hearing on the
Proposed Merger Between Ticketmaster and Live Nation, Cong. p. 60 (Feb.
26, 2009) (statement of Michael Rapino, President and CEO of Live
Nation Worldwide).\5\
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\5\ ``We [Live Nation] do 1,000 concerts at our 50
amphitheaters. We will lose $70 million at the door. That means the
price of the talent versus the ticket price. That's 10 million
tickets being sold. So in theory, if I had any control on those
ticket prices, you would assume I would charge seven more dollars a
ticket to cover my $70 million loss. The artist takes the door and
we end up making the money on the peanut, popcorn, parking and
ticket rebates.''
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To obtain further control over major artists, Live Nation has
entered into multi-year agreements to manage every aspect of an
artist's career, capture all revenue streams associated therewith and
control every market comprising or ancillary to the live music concert
industry. Acknowledging this strategy, Live Nation Chief Executive
Officer Michael Rapino stated that Live Nation was ``acquiring more
rights for a longer time period with locked-in pricing, cross-
collateralized for risk reduction.'' (Live Nation Q1 2008 Earnings Call
Transcript.) Live Nation has entered into these ``360[deg] degree
management contracts'' with Madonna, U2, Jay-Z, Nickelback and Shakira.
As part of these agreements, Live Nation assumes the management of
artists' careers and controls whatever revenues they generate, locking
up the artist for a number of years.
Live Nation continued Clear Channel's acquisition spree, acquiring
promoters and venues and entering into management and exclusive booking
arrangements with venues. Notably, when HOB Entertainment, Inc.
threatened Live Nation's primacy by expanding its House of Blues themed
dinner and music clubs nationwide and purchasing amphitheatres, Live
Nation acquired it. It was reported that this acquisition closed many
of the gaps in Live Nation's national tour routing. Live Nation also
acquired, entered into long term leases and executed management or
exclusive booking agreements at numerous amphitheatres, concert halls,
music theatres and other such venues. (See, MSN.com, PR Newswire, Live
Nation Continues Top 20 Market Expansion with Agreement to Operate
Bayfront Amphitheater in Miami, Florida--16th Largest Market in United
States (Ex. ``E'' hereto).) \6\ LNE presently owns, leases, manages or
exclusively books 111 venues in the United States, including some of
the most prestigious, such as The Fillmore in San Francisco and the
Hollywood Palladium. (See Live Nation 2009 10K.)
---------------------------------------------------------------------------
\6\ Available at http://news.moneycentral.msn.com/printarticle.aspx?feed=PR&date=2008-812&id=9017679).
---------------------------------------------------------------------------
Live Nation also expanded its reach internationally by acquiring
promoters and venues in Europe. On August 21, 2008, Live Nation formed
a partnership with Corporaci[oacute]n Interamericana de Entretenimiento
SAB de C.V. (``CIE''), the largest concert promoter in Latin America.
CIE owns nearly all the major concert halls and arenas in Mexico, and a
large percentage of those in Brazil and other large South American
markets. The Wall Street Journal Online reported that this partnership
gives Live Nation the exclusive right to book world tours into CIE
venues. See Ethan Smith, Live Nation Reaches Deal with Big Concert
Promoter, Wall St. J., Aug. 21, 2008, available at http://online.wsj.com. Live Nation's international expansion, particularly its
relationship with CIE, enhanced its control by affording it the ability
to promote artists' world tours or using the ability to play CIE venues
as leverage in negotiating national tours or appearances at Live Nation
venues in the United States.
Live Nation now dominates the markets for promoting and providing
venue services for popular music concerts by major artists. Based upon
data from Pollstar, which the Government recognizes as a ``leading
source of concert industry information'' (Competitive Impact Statement,
p. 4 n.2), Live Nation promoted at least 70% of the live popular music
concert tickets sold by major artists in the United States in 2008.\7\
Based on Live Nation's public disclosures and an analysis of Pollstar
data, Live Nation controls 40 of the 48 in excess of 15,000 fan
capacity amphitheatres and has a monopoly of or the only amphitheatre
in 18 of the largest 25 designated market areas \8\ in the United
States. There are several areas of the country in which there are no
popular music promoters other than Live Nation or appropriately sized
venues other than those controlled by Live Nation.
---------------------------------------------------------------------------
\7\ This analysis is based upon current information and
represents Live Nation's minimum share of this market.
\8\ A designated market area, or DMA, as designated by Nielsen
Media Research, Inc.
---------------------------------------------------------------------------
As the Government recognizes, in approximately 2007, Live Nation
licensed technology to enable it to conduct the remote sale of concert
and other event tickets. This action threatened Ticketmaster's existing
dominance in the market for the remote sale of event tickets because,
as the Government also recognizes, Live Nation had a captive market for
its remote ticketing services (the venues it controlled) and was better
positioned to overcome the significant existing barriers to entry into
this market. Realizing that Live Nation would compete against it in the
remote sale of event tickets, Ticketmaster laid the foundation to
compete against Live Nation in the market for the promotion of
concerts. The obvious plan was to put Ticketmaster in position to
protect its remote ticketing business by offering integrated services
(at least artists, historical concert information and ticketing
services) to artists and venues.
A significant step in developing this capability was Ticketmaster's
acquisition of majority control of Front Line Management (``Front
Line''), one of the largest artist management companies in the country,
which boasts a staple of marquee artists, ranging in age from Miley
Cyrus to Willie Nelson. Front Line managed artists also include Van
Halen, Neil Diamond, Christina Aguilera, Kid Rock, Maroon 5, the Kings
of Leon, Jimmy Buffett, Aerosmith and Guns-n-Roses. (David Siegel,
Calling Almost Everyone's Tune, N.Y. Times Reprints, April 23, 2010.)
Front Line's Chief Executive Officer is Irving Azoff, who is recognized
as one of the most influential recording artist managers in the world.
(Id.) Ticketmaster's control of Front Line's artists threatened Live
Nation because it could deny Live Nation access to a substantial number
of the less than a hundred artists who could command an audience large
enough to sell out or fill its amphitheatres and other larger capacity
venues.
Within just a few months of this acquisition, Live Nation and
Ticketmaster agreed to merge. While the Government characterizes this
merger as a move by Ticketmaster ``to eliminate Live Nation entirely as
a competitor''
[[Page 37665]]
(Competitive Impact Statement, p. 11), Live Nation, in fact, was the
dominant party in the merger and it acted to eliminate Ticketmaster (as
it has eliminated so many previous competitors) as a threat to its
control of the interface between popular music artists and their fans.
At the very least, while the merger eliminated a competitor in the
market for remote ticketing services, it also eliminated a competitor
in the market for promoting popular music concerts and a potential
competitor in the market for providing venue services.
Proposed Final Judgment
On January 25, 2010, the Government filed a civil antitrust
Complaint seeking to enjoin the proposed merger between Live Nation and
Ticketmaster because its primary effect would be to ``lessen
competition substantially for primary ticketing services to major
concert venues located in the United States.'' (Competitive Impact
Statement, pp. 1-2.) In support of this claim for relief, the
Government alleged that Ticketmaster ``dominated primary ticketing,
including primary ticketing for major concert venues, for over two
decades.'' (Amended Complaint, ] 21.) The Government contended that, as
a result of this dominance, Ticketmaster was able to charge consumers
supra competitive ticketing fees which did not decrease even though
Ticketmaster's costs were declining as a result of the introduction of
selling tickets over the Internet. (Id., ] 22.)
The Government defined the market as the ``provision of primary
ticketing services to major concert venues'' even though Ticketmaster
provided remote ticketing services to events other than music concerts
because the ``set of customers most likely to be affected by the merger
of Ticketmaster and Live Nation are major concert venues.'' (Amended
Complaint, ] 37.) It noted that the ``merged firm's promotion and
artist management businesses provide an additional challenge that small
ticketing companies will now have to overcome. The ability to use its
content as an inducement was the point that Live Nation touted as the
basis on which Live Nation could challenge Ticketmaster in ticketing.''
(Id., ] 43.)
The Government simultaneously filed the Consent Judgment which
would preclude Live Nation and Ticketmaster from completing their
merger until they complied with the remedial action specified therein.
As a general matter, Ticketmaster was required to license the
Ticketmaster operational software to Anschutz Entertainment Group, Inc.
(``AEG'') (or another acceptable licensee) and divest Ticketmaster's
entire Paciolan business to Comcast Spectacor, LP (or another
acceptable acquirer). The stated purpose of this remedial action is to
create viable competitors to LNE in the market for providing primary
remote ticketing services, particularly in providing these services to
major music venues. The Proposed Consent Judgment also imposes remedial
measures intended to assist these entities in competing against the
merged entity. These measures include prohibiting the merged entity
from retaliating against any venue, such as by refusing to host
concerts at any venue, that selects another primary remote ticketing
service.
However, the Consent Judgment does not address Live Nation's
ability, as recognized in the Amended Complaint, to drive the use of
its primary, remote ticketing business through the control of other
markets. The prohibition of LNE retaliating against concert venues
utilizing other ticketing services provides no meaningful protection
because, with the exception of stadiums and arenas that are not
primarily used as concert venues, Live Nation already directs the
artists it promotes, and now manages, to the music venues it owns,
leases, manages or exclusively books. LNE does not have to retaliate
against anyone to induce those venues to utilize its (Ticketmaster's)
primary, remote ticketing service. It either controls or already has
substantial influence over this decision. As Live Nation dominated, and
LNE has even greater control over, the promotion of popular music
concerts and venues used for popular music concerts by major artists,
LNE will dominate the primary remote ticketing services market as well.
LNE will have no reason to reduce the excessive service fees
Ticketmaster charged. Indeed, it would appear that LNE will use supra
competitive ticketing service fees as another source to off-set the
supra competitive payments it makes to artists.
The Proposed Consent Judgment does nothing to prohibit this
conduct. To the contrary, it facilitates this action by expressly
permitting LNE to bundle its services. For this reason, the remedial
action the Government has negotiated will not prevent the competitive
harm it sought to address. In fact, the merged entity has continued to
direct artists to the venues it controls for the upcoming 2010 season.
For these reasons, if the Live Nation/Ticketmaster merger is to be
permitted, additional remedial action must be required.
Argument
A. A Consent Order That Provides for Ineffective Remedial Action Should
Not Be Approved
The determination of whether the Consent Judgment should be
approved will be based on whether it is in the ``public interest.'' 15
U.S.C. 16(e)(1). In making this assessment, a court may not substitute
its judgment for the Government's as to the nature or scope of the
claims brought in the first instance. United States v. Microsoft Corp.,
56 F.3d 1448 (DC Cir. 1995). For this reason, while the Objectors
believe that the Live Nation and Ticketmaster merger will substantially
reduce competition in the market for providing promotional and venue
services to popular music artists, and contend that Live Nation's
conduct is independently actionable,\9\ they have not addressed these
issues.
---------------------------------------------------------------------------
\9\ I.M.P. and I.M.A. have filed a Complaint against Live Nation
asserting antitrust and State law unfair competition claims. It's My
Party, Inc. v. Live Nation, Inc., United States District Court for
the District of Maryland, Northern Division, Civil Action No. 1:09
Civ. 00547 JFM.
---------------------------------------------------------------------------
Conversely, the court is not merely a ``judicial rubber stamp[ ]'';
it is required to make ``an independent determination as to whether or
not entry of a proposed consent decree is in the public interest.''
Id., at 1458 (quoting H.R.REP. NO. 1463, 93d Cong., 2d Sess. 8 (1974),
and S.REP. NO. 298, 93d Cong. 1st Sess. 5 (1974), reprinted in 1974
U.S.C.C.A.N. 6535, 6538, 6539.) The independent nature of judicial
review of a consent judgment is further evidenced in the Senate debate
of the Tunney Act: ``[The Act] will make our courts an independent
force rather than a rubber stamp in reviewing consent decrees, and it
will assure that the courtroom rather than the backroom becomes the
final arbiter in antitrust enforcement.'' (The Antitrust Procedures and
Penalties Act of 1974: Hearings on S. 782 and S. 1088 Before the
Subcomm. on Antitrust and Monopoly of the Senate Comm. on the
Judiciary, 93d Cong. 1 (1973) (opening remarks of Senator Tunney).) See
also, United States v. GTE, 603 F. Supp. 730, 740 n.42 (D. D.C. 1984)
(``([I]n light of the history and purpose of the Tunney Act, it is
abundantly clear that the courts were not to be mere rubber stamps,
accepting whatever the parties might present'').
In making this determination, the Tunney Act provides that the
Court ``may consider,'' inter alia:
``(1) The competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration
[[Page 37666]]
or relief sought, anticipated effects of alternative remedies actually
considered, and any other considerations bearing upon the adequacy of
such judgment * * * ''
15 U.S.C. 16(e). A court should ``hesitate'' in the face of specific
objections from directly affected third parties before concluding that
a proposed final judgment is in the public interest. United States v.
Microsoft Corp., supra, 56 F.3d at 1462. Additionally,
``The court should pay ``special attention'' to the clarity of the
proposed consent decree and to the adequacy of its compliance
mechanisms in order to assure that the decree is sufficiently precise
and the compliance mechanisms sufficiently effective to enable the
court to manage the implementation of the consent decree and resolve
any subsequent disputes.''
United States v. Thompson Corp., 949 F.Supp. 907, 914 (D. D.C. 1996).
In Thompson, in response to objections by competitors, the Court
refused to approve a consent judgment permitting the merger of Thompson
Corporation and West Publishing unless additional remedial action was
implemented with respect to West's claim of copyright protection for
its star pagination system. In so ruling, the Court held the remedial
actions specified in the proposed consent judgment did not adequately
address the anticompetitive concerns the government raised in its
complaint with West's assertion of copyright protection for the star
pagination system.
The Court should give serious consideration to the position of the
Objectors--competitors of Live Nation in both concert promotion and
venue operation--that the government plaintiffs' proposed remedial
relief will not address the substantial reduction in competition in the
market for providing primary ticketing services they have concluded
will result from the merger of Live Nation and Ticketmaster. Indeed, as
the Government is still permitted to demand additional remedial action,
it should give serious consideration to Objections filed by entities
with substantial knowledge of the relevant markets and in unique
positions to assess whether anyone will be able to compete effectively
against Live Nation in the primary remote ticketing market before
finalizing the Proposed Consent Judgment. A consent judgment that is
ineffective in remediating the competitive harm the Government sought
to address is not in the public interest.
B. LNE's Dominance over the Market for Concert Promotion and Venue
Services Will Strangle Competition in the Market for Primary Remote
Ticket Sales at Major Music Venues
Even though it affirmatively alleges that the customers most
directly affected by the merger are major concert venues, and that
LNE's promotion and artist management business poses an additional
challenge that rival ticketing companies will have to overcome, the
Government provides an, at best, perfunctory analysis of Live Nation's
pre-merger share of the market for concert promotion and venue
services. It claims that Live Nation owns or operates 70 major concert
facilities throughout the United States (Competitive Impact Statement,
p. 5) and does not examine the extent to which Live Nation's controls
the available venues in the geographic markets in which it competes. It
further claims that Live Nation promoted shows represent 33% of the
concert revenues at major concert venues in 2008.
However, Live Nation's public disclosures establish that it owns,
leases, manages or exclusively books at least \10\ 111 music concert
venues. As is set forth previously, prior to the merger, Live Nation
had monopoly control of amphitheatres with a more than 15,000 seating
capacity in the United States and controls the only venue or a monopoly
of the music venues in 18 of the largest 25 designated market areas.
Given this dominance of the market, as is recognized by Trent Reznor,
the lead singer for Nine Inch Nails, artists must deal with Live Nation
on concert tours:
\10\ It is unknown whether Live Nation's public disclosures
identify all venues it exclusively books.
---------------------------------------------------------------------------
``NIN [Nine Inch Nails] decides to tour this summer. We arrive
at the conclusion outdoor amphitheaters are the right venue for this
outing, for a variety of reasons we've throughly [sic] considered.
In the past, NIN would sell the shows in each market to local
promoters, who then `buy' the show from us to sell to you. Live
Nation happens to own all the amphitheaters and bought most of the
local promoters--so if you want to play those venues, you're being
promoted by Live Nation.''
The footnote provides:
``I fully realize by playing those venues we are getting into
bed with all these guys. I've learned to choose my fights and at
this point in time it would be logistically too difficult to attempt
to circumvent the venues/promoter/ticketing infrastructure already
in place for this type of tour.''
Moreover, measuring Live Nation's market power in concert promotion
based on revenue generated from ticket sales from what the Government
terms major concert venues is inherently flawed as market power should
be measured in the number of tickets sold. Promoters are typically
ranked in the industry, as is reflected in Pollstar's rankings, based
on the number of tickets sold for concerts they promote. Furthermore,
as with many service providers in this industry, ticketing companies
are not paid by the entity that engages them (in this case, venues
owners or operators), but rather they charge concert goers service fees
per ticket. It accordingly was the consumer that bore the burden of
Ticketmaster's dominance of the primary remote sale of concert tickets
through the payment of supra competitive service fees per ticket. As
the competitive harm is reflected in service fees per ticket, the
measure of Live Nation's market power should be the percentage of the
total number of tickets sold.
Even if the calculation of market power were based on revenues, the
Government's analysis substantially minimizes Live Nation's pre-merger
share of the market. Live Nation is in the business of promoting music
concerts and, once again, the Government recognized that the merger
will most acutely affect major concert venues. Nevertheless, the
Government appears to have calculated Live Nation's share of the
promotional market by comparing the revenues it earned promoting
concerts to the total revenues of the top 500 highest grossing venues.
(Competitive Impact Statement, p. 4, n.2.) While the Government does
not list what it considered to be the top 500 grossing venues, Pollstar
data establishes that facilities clearly within the top 500 grossing
venues have reported significant revenue for events that were not music
concerts. Those events include circuses (both traditional [Ringling
Brothers and Barnum & Bailey] and Cirque de Soleil style performances),
plays, ice shows, ballet, opera and performances by comedians,
magicians, symphony orchestras and the Blue Man Group. (A list of some
of the events reported in Pollstar is attached hereto and marked Ex.
``F''.) These events are plainly not music concerts and are not
substitutes for fans of major popular music artists.
The events included within the Pollstar data also include
performances by gospel, jazz, blues and other musicians, which are not
fairly characterized as popular music and are also not adequate
substitutes for fans of major popular music artists. The vast majority
of fans only enjoy specific genres of music as is evidenced, for
instance, by the segregation of radio stations among music genres.
Further,
[[Page 37667]]
Billboard magazine ranks songs according to their genre. (See, Ex.
``G'' hereto.) Fans will generally not attend a concert featuring a
genre they do not enjoy. For this reason, in Nobody in Particular
Presents, supra, the court held that the plaintiffs had established a
triable issue of fact as to whether there was a distinct market for
rock music and concerts. 311 F.Supp.2d at 1082-83. There is not a
cross-elasticity of demand between popular music and jazz, blues and
particularly gospel (that are usually attended only by fans with strong
religious beliefs), and the option of attending these types of concerts
will not impede LNE's ability to maintain supra competitive ticketing
service fees in popular music concerts.
Moreover, as the Government recognizes (Competitive Impact
Statement, p. 4 n.2), the top 500 grossing venues include clubs and
music theatres. These facilities have limited seating capacities. In
its Annual Report on Form 10K for the year ending December 31, 2008,
Live Nation recognizes that music theatres typically have a seating
capacity of between 1,000 and 6,500 and clubs have a seating capacity
of less than 1,000 fans. With rare exceptions, artists appear at these
kinds of venues because they do not have sufficient popularity, due
either to their being a developing act or the genre of music they
perform, to draw an audience for a larger amphitheatre, arena or
stadium. Fans not only focus on the style or genre of music, but they
also have favorite artists within a genre, and will generally not
attend a concert by an artist they do not enjoy. By definition, artists
appearing at music theatres and clubs do not have sufficient popularity
to compete effectively against the substantially more popular artists
appearing at amphitheatres, arenas and stadiums.
On the other end of the spectrum, owners of modern arenas and
stadiums prefer artists whose fan base is sufficiently affluent to pay
for the expensive tickets to luxury suites. There are only a few select
performers with sufficient popularity among affluent fans to draw an
audience large enough for a 25,000 seating capacity arena, let alone a
60,000 seating capacity stadium, and most well recognized popular music
artists appear at amphitheatres and other venues specifically designed
for music concerts with seating capacities of between 8,000 and 30,000
fans. Based on Pollstar data, there were only five artists that
appeared in an amphitheatre or other venue used primarily for music
concerts who also appeared at a typical sports arena during the same
tour (other than in a festival or multi-artist concert) in 2008.
Based on this analysis, the proper measure of Live Nation's market
power in the promotion of music concerts is determined by calculating
its percentage share of the tickets sold for promoting popular music
concerts by major artists (with an average attendance of between 8,000
to 30,000 fans). Based upon Pollstar data, Live Nation was the promoter
for 70% of the tickets sold within this market in 2008:
[GRAPHIC] [TIFF OMITTED] TN29JN10.019
Additionally, Live Nation dwarfs other promoters. Its most
significant competitor is AEG Live, which promoted only 43% of the
total amount of tickets to the events tracked by Pollstar worldwide
that Live Nation promoted in 2008 and focuses primarily on arena shows.
Live Nation's next largest competitor is MSG Entertainment which
promoted just 7% of the tickets for events tracked by Pollstar
worldwide that Live Nation promoted in 2008 and is believed to promote
only at New York's Madison Square Gardens. Simply stated, Live Nation
dominates the promotion of popular music concerts by major acts,
particularly those appearing in amphitheatres.
The evidence is overwhelming that Live Nation funnels the acts it
promotes to the venues it controls. As set forth previously, Live
Nation's business model is to control the entire interface between the
artist and their fans. Live Nation pays artists more than the entire
amount of the ticket sales, loses money on concert promotion and
profits only on concession, parking and merchandise sales and,
therefore, requires artists it promotes to appear at its venues. Once
again based upon Pollstar data and Live Nation's publicly disclosed
information, 92% of the concerts it promoted at amphitheatres were held
at venues owned, leased or managed by Live Nation or at which it has
exclusive booking arrangements:
[[Page 37668]]
[GRAPHIC] [TIFF OMITTED] TN29JN10.020
In defending Live Nation's then exclusive booking arrangement with
the New York State Fair, James Koplik, Chairman of Live Nation's
Northeast Region, stated that artists on Live Nation promoted national
tours, who appeared at the New York State Fair, would not have done so
if Live Nation did not have exclusive booking rights there. (See Jim
Koplik, Live Nation is Committed to Successful State Fair, available at
http://blog.syracuse.com (posted August 26, 2008).)
There are numerous examples of this conduct. In discussing whether
No Doubt would play Merriweather Post Pavillion during its 2009 Summer
tour, the act's agent, Mitch Okmin, of M.O.B. Agency, stated that No
Doubt could not play Merriweather because ``if [it is a] L[ive]
N[ation] deal, it will be at the bad traffic place.'' (later identified
as Nissan Pavilion, a Live Nation venue). (Ex. ``H''.) He similarly
said in discussing the 2010 summer tour that No Doubt cannot play any
other venue where there is a Live Nation amphitheatre, stating ``if
[there is a] LN shed we play it.'' (Ex. ``I''.) Marty Diamond of
Paradigm, expressed similar sentiment, responding that to the extent
Coldplay enters into a Live Nation tour for the summer of 2009, there
was no chance ``whatsoever'' that they would be able to play
Merriweather. (Ex. ``J''.) Rob Beckham, from the William Morris Agency,
represents Rascal Flatts and Brad Paisley, and similarly advised that
with respect to ``any hard ticket date, [Live Nation] has the right of
first refusal. They have never not taken a date.'' As to whether he was
permitted to book in non-Live Nation venues, Mr. Beckham stated that
the Live Nation contract is ``exclusive'' and he is only permitted to
book non-Live Nation venues in ``non competitive markets.'' (Ex.
``K''.) Mitch Okmin echoed this response, stating that, as a result of
Live Nation tours, his ``involvement now is markets where there are no
Live nation sheds.'' (Ex. ``L''.) Even though artists would often
prefer to appear at independent venues, Live Nation makes it next to
impossible for them to do so. Indeed, Steve Kaul, of the Agency Group,
who promotes Nickelback, stated that, although he wanted to book the
band at Merriweather, he was precluded from doing so by the terms of
Nickelback's 360 deal with Live Nation. (Ex. ``M''.) Mr. Kaul went on
to acknowledge that Live Nation behaves like this in order to ``cross
[collateralize] the dates and protect their profits against some weak
markets.'' (Ex. ``N''.)
Live Nation also utilizes its control of the market for venue
services in one geographic region to compel artists to appear at a Live
Nation controlled venue in an area where it faces competition. For
instance, in response to solicitations for 311 to appear at
Merriweather Post Pavilion during the 2008 concert season, the band's
booking agent advised that refusing to play Nissan would put the band's
Virginia Beach appearance at a Live Nation venue at risk. (Ex. ``O''.)
In those few instances in which an artist nevertheless insists upon
playing a competing venue, Live Nation requires the competing promoter
and/or venue operator to pay a tribute in terms of sharing a percentage
of the profits from this concert with Live Nation. I.M.P. was required
to pay Live Nation 25% of the entire concert gross in order to promote
the Warped Tour from 2006 through 2009, Iron Maiden in 2008 and John
Mayer in 2008. (Exs. ``P'' and ``Q''.) In order for The Fray to play
Merriweather in 2009, I.M.P. was required to pay Live Nation $3 per
ticket, because 25% of the concert proceeds were no longer deemed
sufficient. (Ex. ``R''.) Live Nation also imposes a penalty upon
artists for playing another venue.
It cannot reasonably be contended that Live Nation will utilize any
ticketing service other than its own at the 111 music concert venues it
controls. This does not violate the Consent Judgment as drafted because
Live Nation is controlling or has influence over this decision at the
venues it controls. It does not have to retaliate in order to implement
its ticketing services for the venues it controls.
Without access to Live Nation controlled venues, rival ticketing
companies will not be able to penetrate the market for remote, primary
ticket sales to music concert venues. As LNE controls the only or a
monopoly of the venues in numerous markets, including 18 of the 25
largest designated marketing areas in the country, rival ticketing
companies will not have access to venues in those markets. Whatever
minimal market penetration rival ticketing companies achieve will not
inhibit Live Nation's ability to charge supra competitive ticketing
service fees. Even where there is a comparable music venue in a
geographic region in which Live Nation controls a venue, LNE's control
of the artists will deny a competing facility access to artists of
sufficient popularity
[[Page 37669]]
to provide a meaningful alternative to artists appearing at the Live
Nation venue. Fans have a limited amount to spend on concerts,
generally wish to purchase tickets only to concerts featuring their
favorite artists and will not usually purchase tickets for concerts by
artists whose music they do not enjoy. Unless a rival venue can offer a
slate of concerts by artists of sufficient popularity that fans wish to
attend as much as the artists appearing at a Live Nation venue, the
rival cannot provide meaningful competition.
The impact of Live Nation's market dominance on rival venues'
ability to attract artists is illustrated by comparing the difference
in the nature of artists appearing at the Mann Music Center (``Mann'')
in Philadelphia before and after Live Nation obtained exclusive booking
rights at the Susquehanna Bank Center, a competing venue located in
Camden, New Jersey. As illustrated by the attached concert schedule
(Ex. ``S''), the Mann went from booking highly popular artists, such as
James Taylor, who generally sold out the facility, to booking acts of
limited or niche popularity. Further, Metropolitan Talent abandoned its
booking arrangement at the Marvin Sands-Constellation Brands Performing
Arts Center (``CMAC'') in upstate New York because it could not attract
artists in competition with the Darien Lake Performing Arts Center that
is booked exclusively by Live Nation.
LNE will be even more dominant than Live Nation. Control of Front
Line's stable of artists gives LNE the ability to feed those artists to
its promotional business. As LNE will continue to insist that the
artists it promotes appear at the venues it controls, uniting Live
Nation's promotional and Front Line's artist management businesses will
deny rival venues a meaningful opportunity to compete for an even
greater percentage of popular artists, and consequently further limit
rival ticketing services' ability to inhibit the merged entity's
ability to charge supra competitive service fees. Additionally,
Ticketmaster has long maintained an extensive customer database that is
effectively utilized to solicit fans for concerts at venues to which it
provides ticketing services. As no other ticketing service has such an
extensive database, the promise of access to it will be a powerful
inducement for rival venues to utilize the merged entity's ticketing
services.
As soon as the Proposed Consent Judgment was filed, LNE flexed its
muscle. It bid on virtually every artist touring in 2010 and the
booking agents for popular artists, such as Rascal Flatts, Brad
Paisley, Iron Maiden, 311 and Jimmy Buffett, did not even solicit
competitive offers for the upcoming 2010 summer concert season. This
conduct has already impacted ticket prices and ticket servicing fees.
For instance, the top ticket price for the Lady Gaga tour has increased
by approximately 133% in the last three months.
C. The Consent Judgment Should Not Be Adopted without Further Remedial
Relief
Competition in the market for the primary remote ticketing of music
concerts will not be restored to levels where LNE will be unable to
charge supra competitive service fees unless Live Nation's ability to
funnel the concerts it promotes to the venues it controls is curtailed.
While the Objectors believe that Live Nation's tying promotional
services to artists appearing at Live Nation's venues constitute
independent violations of the antitrust laws, it is well-established
that antitrust remedies may prohibit conduct beyond what would
necessarily violate the antitrust law. United States v. Loew's, 371
U.S. 38, 53 (1962); X Areeda, Elhauge & Hovenkamp, Antitrust Law 1758,
at 349 (1996). All that is necessary is that the relief ordered be
reasonably necessary ``to cure the ill effects of the illegal conduct,
and assure the public freedom from its continuance, and it necessarily
must fit the exigencies of the particular case.'' Ford Motor Co. v.
United States, 405 U.S. 562, 575 (1972).
The DOJ's Policy Guide to Merger Remedies provides that conduct
remedies are appropriate where the merged firm must modify its behavior
for any structural relief that has been ordered to be effective.
(Antitrust Division Policy Guide to Merger Remedies, p. 18, U.S.
Department of Justice, Antitrust Division, October 2004.) To render the
divestiture remedies required by the Consent Order effective, LNE
should be enjoined from in any manner requiring or inducing artists it
manages or promotes to appear at venues it controls, insisting (other
than in circumstances where the merged entity has entered into a
legitimate co-promotional arrangement) that rival promoters or venue
owners share any part of the revenue or profits they earn on concerts
with LNE and/or from in any manner penalizing an artist for using a
rival promoter or appearing at a competing venue. This remedy will
assist those remaining venues still competing with LNE to obtain
artists of the same level of popularity as the artists appearing at
Live Nation venues, giving consumers in those areas a meaningful choice
between concert venues--a choice that will limit LNE's ability to
charge supra competitive service charges because fans will have the
ability to attend equally desirable concerts in competing venues with
lower service charges.
The additional remedial measure of prohibiting the merged entity
from promoting or hosting more than seventy-five percent of an artist's
tour should be adopted. This additional remedy is necessary because of
the subtle, often undetectable, efforts LNE may utilize to persuade or
pressure Front Line's artists and other artists it promotes to appear
at the venues it controls. This is a particular concern given Irving
Azoff's power in the concert industry. Conversely, an objective
standard is easily policed.
LNE should also be required to return at the request of any
promoter or venue owner all data relating to concerts for which
Ticketmaster provided the ticketing and to delete any such information
from its electronically stored data and files. This remedy will reduce
the competitive advantage LNE would otherwise enjoy over rival
ticketing service companies as a result of its possession of an
extensive customer database. It will also deny LNE access to
information provided in confidence to Ticketmaster and with the
reasonable expectation that a direct competitor would not be given
access to this information.
Conclusion
In sum, establishing additional ticketing services capabilities is
meaningless unless there is someone to whom these services can be
provided. This will not occur unless LNE's control over the management
and promotion of major popular music artists, and where they appear, is
addressed. Otherwise, the vast majority of major popular music artists
will be promoted by LNE and appear at LNE controlled venues and rival
remote ticketing providers, much less, rival promoters and venue owners
or operators, will not be able to compete. Fans will have to pay supra
competitive ticket prices, service fees, concessions prices, parking
charges and merchandising fees to attend concerts by their favorite
artists at LNE venues. A wholly ineffective consent judgment is simply
not in the public interest. To that end, we suggest the aforementioned
remedies in order to render the consent judgment effective in the
manner in which it was intended.
Dated: May 3, 2010.
Cozen O'Connor,
Robert W. Hayes,
Rachel H. Robbins,
[[Page 37670]]
Abby L. Sacunas,
Attorneys for It's My Amphitheatre, Inc., d/b/a Merriweather Post
Pavilion and on behalf of Frank Productions, Inc., Sue McLean and
Associates, Metropolitan Talent, Inc. and the National Consumers
League.
Note: The attachments to this comment are available on the
Antitrust Division's Web site at http://www.justice.gov/atr/cases/ticket.htm.
BILLING CODE C
[GRAPHIC] [TIFF OMITTED] TN29JN10.021
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[[Page 37682]]
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[[Page 37683]]
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[[Page 37684]]
[GRAPHIC] [TIFF OMITTED] TN29JN10.035
[[Page 37685]]
[GRAPHIC] [TIFF OMITTED] TN29JN10.036
[[Page 37686]]
[GRAPHIC] [TIFF OMITTED] TN29JN10.037
[[Page 37687]]
[GRAPHIC] [TIFF OMITTED] TN29JN10.038
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[GRAPHIC] [TIFF OMITTED] TN29JN10.039
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[GRAPHIC] [TIFF OMITTED] TN29JN10.040
[[Page 37690]]
[GRAPHIC] [TIFF OMITTED] TN29JN10.041
[[Page 37691]]
[GRAPHIC] [TIFF OMITTED] TN29JN10.042
[[Page 37692]]
[GRAPHIC] [TIFF OMITTED] TN29JN10.043
[[Page 37693]]
[GRAPHIC] [TIFF OMITTED] TN29JN10.044
BILLING CODE C
[[Page 37694]]
In the United States District Court for the District of Columbia
United States of America et al, Plaintiff v. Ticketmaster
Entertainment, Inc. 8800 West Sunset Boulevard, West Hollywood, CA
90069 and Live Nation, Inc., 9348 Civic Center Drive, Beverly Hills, CA
90210, Defendants.
Case: 1:10-cv-00139.
Assigned to: Collyer, Rosemary M.
Assign. Date: 1/25/2010.
Description: Antitrust.
Date filed: 1/28/2010.
Tunney Act Comments of Jack Orbin, President, Stone City Attractions,
Inc. on the Proposed Final Judgment in the Ticketmaster/Live Nation
Merger Matter
On January 24, 2010 the Antitrust Division of the Department of
Justice (``DOJ'') filed a complaint and proposed final judgment
(``PFJ'') with the United States District Court for the District of
Columbia regarding the merger of Ticketmaster Entertainment, Inc.
(``Ticketmaster'') and Live Nation, Inc. (``Live Nation''), to create
the merged company Live Nation Entertainment, Inc. (``LNE''). Without a
reasonable doubt, the merger of Ticketmaster, the nation's largest
ticketing company, and Live Nation, by far the nation's largest concert
promoter, will further damage an already fragile live concert industry
and should be disallowed. We are submitting these comments on behalf of
Jack Orbin, founder and president of Stone City Attractions, one of the
largest and innovative independent concert promoters in the country, to
document how the PFJ fails to adequately protect competition in the
live entertainment industry, specifically in the primary ticketing
market for major concert venues, and to suggest more significant
remedies that can be used to strengthen the PFJ.\11\
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\11\ Jack Orbin is the founder and President of Stone City
Attractions, Inc., a well-respected, family-owned independent
regional concert promoter. Jack Orbin has promoted and produced
events in the Southwest for the past 38 years. Over the past 38
years, Stone City Attractions has promoted nearly every major
concert act, from pop and rock-n-roll to country and jazz in venues
of all sizes.
Jack prides himself in the extent of his community involvement.
Jack was named one of San Antonio's ``Most Influential Top 100
Leaders'' in Arts & Entertainment. Additionally, Jack is an active
member of the San Antonio Alamodome Advisory Sub-Committee, and has
been awarded their prestigious Humanitarian Award multiple times.
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Any assessment of whether the PFJ adequately restores competition
must begin with these simple facts:
This proposed merger faced unprecedented opposition from
consumer groups, Members of the United States Congress, ticket sellers,
artists, managers, independent concert promoters, and actual consumers
of live entertainment. The DOJ received over 25,000 direct consumer
complaints urging the DOJ to block the merger.\12\
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\12\ Jason Schreurs, 25,000 Concertgoers Urge U.S. Justice
Department to Block Ticketmaster/Live Nation Merger, Exclaim News
(January 20, 2010), available at http://www.exclaim.ca/articles/generalarticlesynopsfullart.aspx?csid2=844&fid1=43772.
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Attached to these comments is a letter from 50 members of
Congress to AAG Varney opposing the merger. The letter expresses
concerns that the merger will eliminate the minimal competition in the
ticketing market, leading to higher prices and less service.
``Permitting Ticketmaster to merge with its most significant competitor
effectively abandons any hope for the development of competition in the
foreseeable future, and it would subject consumers to any exploitation,
including higher ticket prices and fees, that the newly merged firm
might wish to make of its monopoly power.'' \13\
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\13\ Letter to Assistant Attorney General Christine Varney from
50 members of the U.S. House of Representatives (July 27, 2009).
Attached hereto as ``Attachment A.''
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Congressman Bill Pascrell framed concerns of the merger in
a December 16, 2009 press conference launching the merger opposition
Web site, Ticketdisaster.org, that featured four members of Congress
and a coalition of consumer groups, ticket sellers and concert
promoters: ``This merger represents the greatest and most urgent threat
to music fans across the country, and if approved will have far-
reaching, long-lasting negative consequences for concert goers and
nearly everyone involved in the live music business.'' \14\
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\14\ Remarks of Congressman Bill Pascrell, Press Conference on
Ticketmaster and Live Nation merger (December 16, 2009).
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The Justice Department decision to accept the PFJ was
roundly criticized by the leading newspapers. The editorial board of
the New York Times declared that ``this kind of consolidation embodied
by Live Nation Entertainment is tremendously worrisome.'' The Times
raised significant concerns over the vertical aspects of the merger
noting this merger has created ``Live Nation Entertainment, a
juggernaut that has it all. It will be tough for a band to tour without
doing business with the new firm.'' \15\
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\15\ Editorial, Music Gets Bigger, N.Y. Times (February 9,
2010). Attached hereto as ``Attachment B.''
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The Washington Post called the PFJ ``a terrible
precedent'' observing that ``the gradual retreat from antitrust
enforcement over the past 30 years has led corporate executives and
their lawyers to believe that there is no merger that cannot win
approval if you're willing to make some relatively minor fixes.''
Permitting the vertical integration of the two dominant live
entertainment companies leaves no doubt that ``a ticket monopolist
seeking to buy the dominant concert promoter and venue operator * * *
[will certainly] bundle its services and force more focused competitors
out of the market.\16\
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\16\ Steven Pearlstein, Ticketmaster and Live Nation Merger is a
Raw Deal, The Washington Post (January 29, 2010), available at
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/28/AR2010012803710.html.
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Further, the DOJ's own Competitive Impact Statement
(``CIS'') provides that ``[t]he proposed transaction would extinguish
competition between Ticketmaster and Live Nation and thereby eliminate
the financial benefits* * *enjoyed during the brief period when Live
Nation was poised to challenge Ticketmaster's dominance;'' diminish
innovation in primary ticketing services; and ``result in even higher
barriers to entry and expansion in the market for primary ticketing
services.'' \17\
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\17\ CIS at 11.
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The theory that the PFJ here, by allowing the largest concert
promoter (who operates at a major financial loss, to the tune of $800
million at the announcement of this merger) to combine with what is
commonly known as the most despised of corporations by the ticket
buying public, will restore competition in the primary ticket sales and
concert promotion markets is nonsensical. The reality is that this
merger further enforces the monopolistic hold of Ticketmaster on the
live entertainment industry; and this merger will continue to increase
ticket prices to consumers and continue to drive independent concert
promoters out of business. AAG Varney stated, after the filing of the
Complaint, that ``we were prepared to litigate the case, and I told the
parties that.'' \18\ Yet, the DOJ did not litigate, and instead chose
to identify a very limited set of competitive concerns in ticketing and
proposed a limited set of remedies. The prohibitions proposed by the
DOJ ``will prove difficult to enforce. And there is nothing to stop
anticompetitive bundling of tour management, concert promotions and
venues.'' \19\
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\18\ Aruna Viswanatha, Justice OKs Ticketmaster Live Nation--
With Conditions, Main Justice (January 25, 2010).
\19\ Editorial, Music Gets Bigger, N.Y. Times (February 9,
2010).
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This merger results in LNE dominating the live entertainment
[[Page 37695]]
industry with over an 80% market share for primary ticketing among
major concert venues, and controlling 127 major concert venues in the
United States, including amphitheaters and clubs. In spite of the
substantial level of concentration resulting from this merger, the DOJ
chose not to challenge the merger to remedy the impact on the
independent concert promoters whose businesses will undoubtedly suffer
as a result, nor to consider the impact to skyrocketing costs to
consumers. The DOJ's enforcement action is inadequate in several
respects:
It fails to secure relief for the consumer by eliminating
competition of independent concert promoters;
The relief fails to ensure adequate competition for
primary ticket sales and for concert promotion, and is insufficient to
allow entry into these markets;
It fails to adequately prevent LNE from acquiring customer
data from independent concert promoters.
As described herein, the DOJ enforcement action is insufficient to
address the competitive concerns of the live entertainment industry
highlighted by the widespread opposition. Because of the enormous
effects on consumers and competitors that this merger will have,
combined with the inadequate relief proposed in the PFJ, the DOJ should
reconsider their position, amend the PFJ as suggested below, reopen the
matter to fully address the competitive concerns raised by this merger,
and ultimately block the merger.
No Relief in for Consumers due to the Elimination of Independent
Concert Promoters
The fact here is simple: ticket prices have skyrocketed since the
roll up of concert promoters into Live Nation's predecessors and
ultimately Live Nation, and the ticketing monopoly created currently by
Ticketmaster. The consumer has been taken advantage of by these two
conglomerates. To believe for a moment that the combination of the two
huge corporations will benefit consumers in better services or lower
prices is fantasy, at best. Both Ticketmaster and Live Nation are
beholden to their stockholders and those stockholders demand profits.
It is safe to assume any savings from the actual integration will be
swiftly swallowed by the drive for profit by these mega-conglomerates,
leaving the consumer helpless. The PFJ provides no form of relief in
terms of lower costs to consumers. In fact, AAG, Christine Varney, has
said that the hope of the DOJ here is to provide competitive choice for
venues, but ``whether that'll mean lower prices for fans, we'll see.''
\20\
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\20\ David Segal, Calling Almost Everyone's Tune, N.Y. Times
(April 23, 2010).
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The promoter principally sets ticket prices and costs have not
increased relative to the ticket price increases.\21\ This is
substantially a result of Live Nation overpaying for Artists to ensure
that other promoters do not have a chance to compete with those
Artists. Live Nation has ``reinvented'' itself numerous times to try to
compensate for their disastrous financials. None of these
reincarnations have been profitable, leading to this desperate act.
Live Nation is currently being sued in various courtrooms, most of
which allege anti-competitive practices and/or the inflation of ticket
prices. Concerts have been used as loss leaders, not only to keep other
promoters from competing, but requiring Live Nation then to try to make
up some of those losses through other ancillary revenue streams,
resulting in falsely inflating prices of merchandise, concessions, and
parking. This merger then becomes simply Ticketmaster and Live Nation
trying to complete their respective monopolies, vertically as well as
horizontally. The rollup of Artist management, ticketing, venues, and
concert promotion into a powerful monopoly precludes the consumer
choices, as well as terminating permanently the potential of any
significant entries, desperately needed, into the live concert
industry.
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\21\ The average price of a ticket to one of the top 100 tours
jumped to $62.57 in 2009 from $25.81 in 1996, far outpacing
inflation. Id.
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As has been commonplace for decades, the strongest protection the
consumer has had has been the power to say ``no'' to a ticket purchase.
The only other protective force has been the fact that a handful of
independent promoters could provide an alternative--ensuring ticket
prices and service charges be competitive and reasonable. However, this
merger, by combining the vertical powers of the industry predominantly
into the hands of this combined mega-conglomerate, destroys any sense
of competitive balance provided by the existence of independent
promoters. The majority of independent promoters will be squeezed from
being able to compete with the already predatory practices commonplace
by these two dominant corporations, who post-merger will have even
greater powers--anticompetitive bundling of Artists, fan clubs, venues,
ticketing, etc.--incumbent in this merger. Thus, relatively soon after
the completion of this merger, if permitted, the protection of the
consumer by the independent promoters will disappear. It is small
businesses that create the real alternative to the consumer through
diversity and innovation and this merger dooms that option.
Unfortunately, the PFJ does little here to protect the important role
of the independent promoters. The DOJ must consider additional remedies
to the PFJ to ensure competitive, non predatory pricing, designed to
protect the consumer.
The PFJ Fails To Ensure Adequate Competition and Actually Enhances
Barriers to Entry
The PFJ provides for extremely limited relief that supposedly will
provide competition to the primary ticket sale and concert promotion
markets. The limited relief here is insufficient to overcome the
significant barriers to entry into both primary ticketing sales and
concert promotion markets. LNE will control over 80% of the primary
ticketing sales in the United States, yet the PFJ provides only for the
divestment of Paciolan, a small ticketing platform that has been
sublicensed to other primary ticket sellers barely representing 4% of
the market; and for a 5-year ticket technology license to Anchutz
Entertainment Group, Inc. (``AEG''), who represents about 8% of the
capacity of U.S. concert venues. As the Washington Post observed
troublesome here is that ``in order to provide sufficient competition
to a bigger and more vertically integrated Ticketmaster, the government
has put itself in the position of playing midwife to two other vertical
mergers--one involving Anschutz, the other Comcast--making it even more
difficult for small venues and independent promoters to survive.'' \22\
While Comcast may theoretically provide for broader competition and the
DOJ believes that AEG may be the ``company best positioned'' to compete
for the sale of primary ticketing,\23\ these remedies are wholly
inadequate.
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\22\ Steven Pearlstein, Ticketmaster and Live Nation Merger is a
Raw Deal, The Washington Post (January 29, 2010), available at
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/28/AR2010012803710.html.
\23\ CIS at 13.
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First, the divestment of Paciolan to Comcast fails to secure any
relief in the primary ticket sales market. Paciolan now is only sub-
licensed by Ticketmaster to roughly 4% of the market for primary
ticketing. Assuming that the 4% benchmark is maintained under Comcast
ownership, Paciolan will only be used in another 2% of concert
[[Page 37696]]
venues which Comcast provides ticketing to.
Second, the merger and the PFJ transform the structure of the
ticketing and promotion marketplace to effectively require vertical
integration in order for any firm to effectively participate in the
market in the future. The merger combines the largest ticketing firm
with the largest concert promoter. Although the parties may assert that
vertical integration is efficient, the DOJ appropriately rejected those
claims.\24\ Yet the DOJ then relied on AEG to attempt to restore
competition, significantly increasing the level of vertical integration
in the market. Post-merger if any firm would seek to enter the
ticketing market in the future, it now will effectively be forced to
simultaneously enter into concert promotion. Typically the antitrust
enforcement agencies challenge vertical mergers because they may
require two-level entry for future entrants; \25\ in this case the PFJ
causes the anticompetitive effect the DOJ is supposed to try to
prevent. In this case the PFJ enhances barriers to entry rather than
reducing them.
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\24\ In the Competitive Impact Statement the DOJ noted that a
``vertically integrated monopoly is less likely to spur innovation
and efficiency than competition between vertically integrated firms,
and a vertically integrated monopoly is unlikely to pass the
benefits of innovation and efficiency onto consumers.'' CIS at 12.
We respectfully suggest that a vertically integrated duopoly is far
less likely to spur innovation than several nonintegrated firms.
\25\ Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ]
1011, at 196 (rev. ed. 1998) (citing the 1984 Merger Guidelines,
Sec. 4.211).
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Third, we are very skeptical that AEG can fully restore competition
through the complex limited licensing arrangement with Ticketmaster.
AEG will be fully beholden and dependent on Ticketmaster. Licensing of
Ticketmaster's ticketing platform to AEG would be insufficient to
prevent the destruction of any remaining consumer protections, and any
competitors, in its wake as well. AEG with 30 concert venues, trails
far behind with the control of LNE's 127 venues. Moreover, the
licensing of the ticketing platform still provides LNE with royalties
based on each ticket sold by AEG, meaning Ticketmaster will have its
hand in AEG's pot.
Fourth, even with the relief offered by the PFJ, LNE will still
control over 80% of the primary ticketing and control most of the major
concert venues in the United States, resulting in significant barriers
to entry into these markets. Independent promoters will have to compete
to book shows in LNE owned venues. And Independent promoters will most
likely be forced to continue to utilize Ticketmaster for the majority
of their shows (allowing Ticketmaster to keep its hands inside the
promoters' pockets.) Moreover, with LNE possessing majority control of
venues, coupled with Ticketmaster's ownership of Front Line Management,
the barriers to entry are significant, and will become more significant
post-merger. Moreover, the fact that the next largest competitors to
Ticketmaster and Live Nation only represent roughly 4% of primary
ticket sales and 8% of major concert venues is telling of the dominance
LNE will have, and of the considerable barriers that will exist post-
merger.
This merger dooms any real diversity in the live concert industry.
As the Editorial Board of the New York Times warned: ``Live Nation
could easily shut out independent promoters--who don't have their own
venues and ticket services. This could reduce diversity in the music
market. The cost savings that are supposed to flow from these mergers
never seem to accrue to consumers because the mergers leave so little
competition.'' \26\ That is why the PFJ should be rejected.
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\26\ Editorial, Music Gets Bigger, N.Y. Times (February 9,
2010).
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D. The PFJ Fails To Provide an Adequate Firewall
The PFJ attempts to limit the anticompetitive effects of the merger
by imposing certain behavioral restrictions on LNE. Even though both
Ticketmaster and LiveNation have been the subject of several antitrust
and consumer protection lawsuits, the PFJ imposes extremely modest
restrictions at best. Ticketmaster, after all, is no model corporate
citizen--during the pendency of this merger it settled Federal Trade
Commission charges that it engaged in fraud and deception in the sales
of tickets for Bruce Springsteen concerts.\27\ If Ticketmaster would
engage in such brazen law violations during the pendency of a
government merger investigation, certainly the most significant and
iron-clad behavioral restrictions must be imposed to prevent any
violations of the PFJ.
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\27\ See Stipulated Final Judgment and Order for Permanent
Injunction and Other Equitable Relief, Federal Trade Comm'n v.
Ticketmaster et al, Case No. 1:10-cv-01093 (N.D. Ill. February 18,
2010).
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Yet the PFJ does not do that. It recognizes the importance of the
confidential information of independent concert promoters, but imposes
an extremely limited two-paragraph firewall--one far less significant
than that used by the other federal antitrust enforcer--the Federal
Trade Commission.
Customer data is the lifeblood of the concert promotion business.
Concert promoters attract customers by producing more innovative and
creative shows, promoting new artists, offering reasonable ticket
prices, and knowing the tastes and interests of their community. Each
independent concert promoter's list of customers is one of its most
crucial assets. When an independent concert promoter puts on a show, he
is able to collect customer information, including e-mail addresses,
through ticket sales. This information is important for the purposes of
advertising and gaining repeat customers.
By permitting this merger, the independent promoters are forced to
contract for primary ticketing services via its largest concert
promotion rival, LNE. LNE will have the incentive and ability to
quickly exploit the information to dampen competition in both promotion
and ticketing. LiveNation has used information in this fashion in the
past. Vertical mergers of this sort often raise the concerns that by
the merging parties having access to competitors' data, there is the
potential for discrimination against competitors, or worse, exclusion
of competitors from the market.
The PFJ attempts to create a firewall provision to prevent LNE from
obtaining the ticketing data of its competitors and using this data in
its non-ticketing businesses (concert promotion and ancillary
services). As the Competitive Impact Statement notes, the PFJ seeks to
protect competition among promoters and artist managers ``by requiring
that Defendants either refrain from using certain ticketing data in
their non-ticketing businesses or provide that data to other promoters
and artist managers.'' \28\ Yet, the PFJ seeks to limit misuse through
a bare bones, two-paragraph firewall provision. To the detriment of
independent concert promoters, this PFJ provision still permits a broad
sharing of information among higher-level employees, including ``any
senior corporate officer, director or manager.'' \29\ Additionally, the
provision seems to lack any mechanism of policing this firewall.
Moreover, the firewall does not adequately protect the independent
concert promoters. These firewall provisions will not work as planned,
especially for a firm like Ticketmaster that has such overwhelming
vertical control and such a poor record of corporate compliance.
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\28\ CIS at 17.
\29\ Proposed Final Judgment at 4, 20.
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[[Page 37697]]
The inadequacy of the PFJ is clear when it is compared to the
approach of the Federal Trade Commission (``FTC'') in implementing a
much stronger firewall in a vertical merger (see In the Matter of
PepsiCo, Inc. (FTC File No. 091 0133, February 26, 2010)).\30\ Pepsi
acquired its two largest bottlers Pepsi Bottling Group and Pepsi
Americas. Pepsi bottlers also distribute for PepsiCo's competitor, Dr.
Pepper and Snapple Group (DPSG). This is a merger with similar vertical
concerns to the Ticketmaster/Live Nation merger, in which the sharing
of competitive information could be detrimental to competition. In a
14-page Consent Order the FTC lays out specific firewall provisions
designed to prevent acquisition and misuse of confidential information
and monitor, when necessary, the use of competitive information by the
merged firm.
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\30\ FTC Consent Order attached hereto as ``Attachment C.''
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The FTC Order imposes a Monitor Trustee to monitor
compliance with the order and the order is explicit that the Trustee is
a fiduciary of the Commission.
Additionally, The Monitor has full audit rights and is
paid for by Pepsi. The Monitor is effectively an employee of the FTC.
The Order designates a very limited set of Pepsi employees
(the parent company) who can have access to the bottling information.
The Order narrowly defines the type of information that
Pepsi (the parent company) can have access to and narrowly defines the
permissible use of the information it is allowed access to.
The Order requires reorganization of personnel in both
Pepsi and the bottling companies to comply with the Order.
The Order requires Pepsi, within a certain time frame, to
develop internal procedures to comply with the Order.
Of course, anyone can recognize that Dr. Pepper and Snapple Group
has far more power and resources to protect itself from anticompetitive
conduct than the small independent concert promoters or venue owners
the PFJ seeks to protect.
The DOJ should reconsider the PFJ, and short of blocking the
merger, should adopt additional mechanisms to strengthen the firewall
provisions, similar to the FTC. For example, a Monitor Trustee, being a
neutral third-party or a fiduciary of the Division, should be required
to monitor compliance with the order; and to ensure compliance, provide
the Monitor Trustee with full audit rights. Additionally, the DOJ
should narrowly define the type of information that the non-ticketing
businesses of LNE can have access to, and narrowly define the
permissible use of the information. Finally, the DOJ should require LNE
to develop internal procedures to comply with the order. The addition
of such enforcement mechanisms will help strengthen what is an
otherwise inadequate PFJ.
1. Conclusion
After an 11-month investigation of a merger which creates a
dominant firm in the broken ticketing market, posing an unprecedented
level of concern by consumers and competitors, the DOJ chose
insufficient remedies to protect consumers and independent concert
promoters. The remedies are inadequate to resolve the competitive
concerns and the PFJ actually enhances barriers to entry. Moreover, the
PFJ fails to adequately provide an effective firewall provision, which
is the only provision to protect independent concert promoters and
their customer base from the predatory practices of Ticketmaster and
Live Nation.
It is a favorite phrasing of Live Nation and Ticketmaster
executives to say the music industry is ``broke.'' There is no doubt
about that; however, it is these companies that have broken it. To
solidify their market power makes no sense. As Congressman Pascrell
declared ``[t]here is little doubt that the result of this merger will
be higher ticket prices, higher fees and chilling effects on consumers,
business managers, artists, music fans, promoters in every state around
the country.'' \31\
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\31\ Remarks of Congressman Bill Pascrell, Press Conference on
Ticketmaster and Live Nation merger (December 16, 2009).
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The PFJ should be rejected and the merger blocked. In the
alternative, we strongly urge the DOJ to amend the PFJ with additional
remedies to address these competitive concerns.
Date: May 3, 2010.
Respectfully submitted.
David A. Balto, Law Offices of David A. Balto, 1350 I Street, NW.,
Suite 850, Washington, DC 20005. Tel: 202-789-5424. Fax: 202-589-1819.
BILLING CODE P
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BILLING CODE C
From: Gary T.
To: ATR-Antitrust--Internet
Cc:
Subject: For Ms. Christine Varney
Sent: Tue 4/13/2010 12:52 PM
Ms. Varney:
As you are quoted in the below article--``Generally when you see
robust competition, you see prices coming down,'' Varney told
reporters. ``This is the right result.'', I am writing you.
On April 1st, 2010 I drive 40 miles to downtown Houston, TX where
the box office of Houston's House of Blues is located in order to
purchase tickets for a concert. While I had business in downtown
Houston, I specifically drove to the aforementioned House of Blues to
purchase the tickets so that I would NOT have to pay all the surcharges
that Ticketmaster/Live Nation charge.
Since the Justice Department allowed the Ticketmaster and Live
Nation merger to occur, as it pertains to House of Blues venues (and
about another 120 venues): they own the venue, produce the concert and
ARE THE ONLY WAY to purchase tickets directly (I.E. Not having to go
through a ticket reseller [which is just another name for legalized
scalping]).
What occurred:
The tickets were purchased at the box office. To my surprise, and
AFTER my credit card was charged, I saw that I was charged a $3
``convenience charge'' for EACH $18 ticket (and NOT told there was such
a charge until AFTER the tickets were purchased). The $3 per
[[Page 37704]]
ticket convenience charge was approximately an additional 17% charge to
the cost of the ticket. I was then advised that since the tickets had
already been charged to my credit card and printed, there was nothing
that the sales person could do at the box office and that I was stuck
with the tickets. Had I known in ADVANCE OF MY CREDIT CARD BEING
CHARGED that I was going to get charged a convenience charge for each
ticket, I never would have made the purchase.
I contacted Ticketmaster about the charges and their response was--
(and the entire email is at the bottom of this email)
From: Ticketmaster Customer Support <[email protected]>
Reply-To: Ticketmaster Customer Support
<[email protected]>
Date: Sat, 10 Apr 2010 08:31:32-0400 (EDT)
To: ``Gary T.
* * * ``There is typically no convenience charge when you drive to
a box office to purchase tickets.''
Yet, did Ticketmaster credit my credit card for the convenience
charges since I purchased the tickets at the box office? No.
To sum the situation up:
1. Prior to the Ticketmaster and Live Nation merger--there were no
convenience charges for purchasing the tickets at the box office where
the event was occurring.
2. Post-merger: Customers are charged convenience charges on
tickets purchased at the box office where the event is occurring.
I see the aforementioned charges as a blatant abuse of monopolistic
power.
Gary T. Johnson
Houston, TX
Ticketmaster, Live Nation Merger Approved: Will It Lead To Lower Ticket
Prices?
RYAN NAKASHIMA [bond] 01/25/10 08:03 PM [bond] AP
LOS ANGELES --Concert promoter Live Nation and ticket-seller
Ticketmaster consummated their merger on Monday after the U.S. Justice
Department approved it with conditions meant to lower ticket prices for
consumers.
Shares in both companies rallied by about 15 percent in trading
Monday, showing that investors approved of how the Obama administration
handled its first big merger with its appointee Christine Varney as
assistant attorney general.
Regulators required Ticketmaster to license its ticketing software
to a competitor and sell a subsidiary that handles tens of millions of
tickets a year.
That is meant to strengthen the companies that will compete for
ticketing contracts and concert promotion work with Live Nation
Entertainment Inc., the new company formed by the merger of Live Nation
Inc. and Ticketmaster Entertainment Inc.
``Generally when you see robust competition, you see prices coming
down,'' Varney told reporters. ``This is the right result.''
Consumer groups, ticket resellers and some politicians had
expressed concerns that the combined company would control too much of
the concert experience. Varney said the original proposal for the
merger would have been ``anticompetitive.''
Both companies agreed to the conditions, but a federal court in
Washington still has to approve it. Canadian regulators and 17 state
attorneys general also signed on to the deal.
The combined company will handle all aspects of the concert
business, including promoting them, selling tickets, beer and parking,
putting out albums and managing an artist roster that includes U2,
Madonna, Jay-Z and the Eagles. Its operations span more than 30
countries. The companies said music fans will benefit through lower
ticket prices because the merged company can earn money in ways that
separate companies could not.
Michael Rapino, CEO of Live Nation and the merged company, said the
merger creates ``a more diversified company with a great selling
platform for artists and a stronger financial profile that will drive
improved shareholder value over the long term.'' Story continues below
Under the Justice Department rules, Ticketmaster must license its
software for five years to Anschutz Entertainment Group Inc., which
owns the Staples Center and other venues. It was also directed to sell
subsidiary Paciolan to Comcast-Spectator, a subsidiary of Comcast Corp.
But consumers might not notice the difference right away, partly
because the merger agreement preserves long-term exclusive ticketing
contracts with venues.
AEG and Comcast-Spectacor could take years to effectively take
ticketing deals away from Ticketmaster, Gabelli & Co. analyst Brett
Harriss said. Only then would ticket fees start to come down, Harriss
said.
Varney said about 20 percent of Ticketmaster's deals with venues
will expire in 2010. Previously the vast majority of Ticketmaster
clients renewed their deals upon expiration.
Some vocal opponents continued their attack. Rep. Bill Pascrell
Jr., D-N.J., said the ruling did not address the resale market that led
to consumers paying inflated prices for a Bruce Springsteen concert
last February.
It also did not affect the vertical integration the companies
proposed--although Varney said her department would monitor the
companies for 10 years to prevent anticompetitive bundling of services.
Don Vaccaro, chief executive of ticket resale site TicketNetwork,
said having three strong players was better than just one, but it still
left small ticket retailers at a disadvantage, especially for VIP
seating packages that artists sometimes release through their concert
promoters.
``They created a lot of little monopolies on tickets at venues,''
Vaccaro said. ``It could have gone further.''
Under the deal, the merged entity will be under a 10-year court
order prohibiting it from retaliating against venues that choose to
sign ticket-selling contracts with competitors. It also must allow
venues that sign deals elsewhere to take consumer ticketing data with
them.
Live Nation, which is based in Los Angeles, and Ticketmaster, which
has headquarters nearby in West Hollywood, have said the merger will
streamline their operations, allowing them to save $40 million a year.
It reversed a schism that happened in 2009, when Live Nation let its
ticketing deal with Ticketmaster expire and instead sold tickets to its
own venues with the help of German company CTS Eventim AG.
The merger closed on Monday, with Ticketmaster stockholders
receiving about 1.474 Live Nation shares for every Ticketmaster share
they own. Ticketmaster shares stopped trading at the end of the day.
Ticketmaster shares rose $2.10, or 15.8 percent, to close at $15.40
while Live Nation shares closed up $1.35, or 14.7 percent, at $10.51.
The merged company now has a market capitalization of about $889
million.
Both Comcast-Spectacor and AEG hailed the ruling as an opportunity
to expand their businesses.
Comcast-Spectacor, which owns the Philadelphia Flyers, Philadelphia
76ers and two arenas, said it would add Paciolan's 200 ticketing
accounts and complement its capabilities as a venue manager, food and
beverage seller and seller of venue-naming rights.
AEG Chief Executive Timothy Leiweke said his company has a
[[Page 37705]]
commitment from Ticketmaster to run ticket-selling operations under the
brands of AEG and its clients starting immediately if AEG wants, and
running for five years. He said AEG will ``aggressively explore''
alternative ticketing platforms in the coming years. AEG can choose to
keep Ticketmaster's technology or develop a separate system by itself
or with partners.
From: Ticketmaster Customer Support <[email protected]>
Reply-To: Ticketmaster Customer Support
<[email protected]>
Date: Sat, 10 Apr 2010 08:31:32-0400 (EDT)
To: ``Gary T.
Subject: To Irving Azoff and the Ticketmaster/Live Nation management: I
purchased tick * * *
[Incident: 100410-000351]
Thank you for allowing us to be of service to you.
Subject
To Irving Azoff and the Ticketmaster/Live Nation management: I
purchased tick* * *
Discussion Thread
(Somer--ZYS774)04/10/2010 08:31 AM EDT
Dear Gary,
Thank you for your e-mail. The convenience charge covers costs that
allow Ticketmaster to provide the widest range of available tickets
while giving you multiple ways to purchase. Tickets are available in
many neighborhoods via local ticket outlet locations, our local charge-
by-phone network and online at Ticketmaster.com. Tickets can be
purchased through at least one distribution channel virtually 24 hours
a day. The convenience charge varies by event and is determined by
negotiations with arena operators, promoters and others based on costs
for each event.
Also, the convenience charge will vary depending upon where you
purchase the tickets. There is typically no convenience charge when you
drive to a box office to purchase tickets. A convenience charge is
applied when you purchase from the Internet, phone or ticket outlet
(e.g., at your local department store) and this charge may vary
depending upon Ticketmaster's local agreements with the venues,
promoters and outlet partners.
Thank you for using Ticketmaster, where we continually strive to
provide World Class Service to every customer, every day! We really
appreciate your business, and hope we were able to resolve any problems
or answer any questions you had. Please reply to this email if we may
be of further assistance.
Sincerely,
Somer--ZYS774
From: Tom Kuhr
To: ATR-Antitrust--Internet; Varney, Christine
Cc:
Subject: Ticketmaster
Sent: Tue 1/26/2010 3:31 PM
Dear Ms. Varney,
It's absolutely unconscionable of you to let an already
monopolistic Ticketmaster acquire even more power to shut out
competition. I don't know what kind of nonsense they told you about how
they play or will play nice with others during your investigation, but
it's clear that they dominate their market by a huge margin and will
continue to shut out any competition with lockups on more venues.
This is the worst decision for consumers in years. The ticket fees
that are already too high will continue to rise, and the new combined
monster of an organization with a stranglehold on both artists and
venues will make cable companies look like charities in comparison.
You made a bad decision this week in the name of corporate growth.
--Tom
Tom Kuhr
Hermosa Beach, California
From: Don Crepeau
To: ATR-Antitrust--Internet
Cc:
Subject: Ticketmaster Live Nation decision.
Sent: Tue 1/26/2010 3:07 PM
I want to thank you for making it near imposable for me to be able
to afford tickets to the concerts of my favorite musicians.
Now that you have insured that the ticket prices will be too high
for me to afford I can concentrate on other things important to me.
Like helping the Republican Party remove the Democrats from office and
maybe causing you to loose your jobs.
Don Crepeau
From: Jason Keenan
To: ATR-OPS Citizen Complaint Center
Cc:
Subject: ticketmaster/live nation merger
Sent: Tue 2/9/2010 8:30 AM
Please reconsider your decision, as a professional musician and
lifelong fan of live music, I urge you to reverse this decision. As an
American, and a believer in the Constitution and Equality of
Opportunity, I simply cannot fathom how you could allow this to happen.
Thank you, Jason Keenan
From: Chris Cantz
To: ATR-ISSG--Web Master
Cc:
Subject: Ticketmaster/Live Nation Merger
Sent: Tue 1/26/2010 12:47 AM
Attention Mr. Webmaster. Could you please ask Ms. Varney what she
was smoking when she said that this merger would be beneficial and
innovative to the public as I would like to order some of it. I'm not
sure how someone in her position isn't aware of the definition of a
monopoly and it's damage to the people our government is meant to
represent. Does she really believe the already exorbitant service
charges will go down now that there is no competition? Once again we
the people get the shaft from the government and the rich corporations
with deep pockets will continue to get richer. Thanks for nothing Ms.
Varney (Other than increased service charges)
From: joseph carlson
To: Hoag, Aaron
Cc:
Subject: TUNNEY ACT COMMENTS RE: case 1:10-cv-00139 usa vs Tmaster
Sent: Tue 1/26/2010 11:47 AM
Mr. Hoag,
I believe the Justice Department made a huge mistake by allowing
the LN TM merger as indicated by the seats made available for their
first big onsale since the merger was approved. This week James Taylor
went onsale for many US cities and Livenation-Ticketmaster OFFERED NO
SEATS ON THE FLOOR FOR ANY OF THE SHOWS!!!!! Furthermore the entire
lower bowl for each venue had less then 40 seats available for the
public onsale. This means they kept well over 4 thousand of the best
seats to scalp for themselves for all of the shows. By allowing this
merger you have made it impossible for the average fan to get good
seats for most concerts that go onsale in America. As government
officials I believe that it is important for you to look out for the
average American not BIG CORPORATIONS!!! You should have never allowed
this merger without mandating TM-LV to offer at least 5% of the seats
for ALL sections of a given venue at the time of an onsale.
The conditions set forth by the merger offered NOTHING to protect
the consumers! Please call me at ***-***-**** for suggestions on
conditions that the DOJ should've made when approving this merger.
[[Page 37706]]
Sincerely,
Joe Carlson
From: Kenneth de Anda
To: ATR-OPS Citizen Complaint Center
Cc:
Subject: YOU have FAILED to protect us yet again
Sent: Mon 1/25/2010 5:23 PM
To Whom It May Concern:
By allowing the Live Nation/Ticketmater merger to go ahead, you have
failed to protect the American consumer. The very people with whom you
are in charge of the task of protecting from large corporations. It is
a very sad day for concert goers and consumers. Once again corporations
have succeeded in blinding politicians with money and false hope for
consumers. I am very saddened that this merger has occurred and hope
for the day when the American consumer will once again be protected by
the very government.agencies that were set up to protect them.
Sincerely,
Kenneth de Anda
[FR Doc. 2010-15686 Filed 6-28-10; 8:45 am]
BILLING CODE P