Will the Ticketmaster - Live Nation Backlash Continue?

The backlash to the Ticketmaster (TKTM) / Live Nation (LYV) transaction has far exceeded this publication's expectation. As of this entry, the Department of Justice has responded to the extremely high volume of political and public concerns by announcing that it has already launched an investigation into the proposed combination. This is obviously a very ominous sign for the regulatory future of the deal, particularly under a new and highly motivated DOJ leadership.

This is quite clearly a case where the companies' decision to move forward with this merger is highly questionable. This deal provides an ideal case for the DOJ to quickly establish it authority, while at the same time distinguishing itself from the previous DOJ's relatively lax enforcement. This concept if very likely the primary reason why the deal is coming under such tremendous criticism that will very likely continue for the next several months.

The tentative estimate for a close in a September/October time frame now seems moot based on the last 24 hours. The companies will need to put forth an incredibly convincing argument and public relations campaign in order to obtain DOJ clearance in a timely fashion and without major conditions. Naturally, this is based on no reference for the DOJ's review habits under the current leadership. However, if Thursday's actions by the regulator are any indication -- and they certainly must be seen as a strong indication -- this deal could very easily be blocked under HSR.