TicketMaster / LiveNation Merger: Smaller Forces Raising Funds to Counter the Giant

With the proposed $2.5 billion merger between TicketMaster (TKTM) and Live Nation (LYV) looming large, many venue owners and promoters are up in arms, deeming the deal anti-competitive and monopolistic (they may be right - the deal is being examined for possible anti-trust violations). Now ShowClix, a TicketMaster competitor that launched in early 2007, is launching the Fair Ticketing Fund, setting aside up to $5 million to entice venues and promoters away from the pending Live Nation Entertainment goliath. Other ticket vendors are also beginning to offer similar deals, including TicketBiscuit, which launched a $10 million fund last week.

For those who aren’t familiar with the ticketing business, here’s a bit of a primer. TicketMaster has long been contracting venues into exclusive deals, promising some portion of the service fees (also known as convenience or venue fees) the site racks up as an incentive for them to sign on. TicketMaster has become notorious for gouging customers with these fees, and many fear that with the Live Nation deal they’ll only continue to rise higher.

Smaller ticket companies like ShowClix don’t typically charge service fees that are nearly as high as TicketMaster’s so they usually can’t promise the same returns to venues. That’s where the their new funds come in: Each is promising venues that they’ll use the new funds to compensate for the income they stand to lose from leaving TicketMaster. In effect, they’re giving venues opposed to the new deal a chance to protest it without doing too much damage to their bank accounts.

However, while ShowClix and TicketBiscuit may be giving away money for now, this is hardly a charity - any venues looking to take advantage of the Fair Ticketing Fund will be signing on with ShowClix under an exclusive year-long deal (which is fairly common in the industry), and TicketBiscuit will also mandate an exclusive deal. Still, it’s nice to see these smaller entities take on TicketMaster - I’m getting tired of “convenience” fees that cost a third as much as the ticket itself.

Comments

[Ducatdad:]

Did you write this for Irving and Barry? Did they pay you for the benefit of adding to the body of evidence they will suggest to Justice in order to prove "ticketing is easy ... anyone can enter the industry and compete with the big boys"?

For those that are familiar with the ticketing industry, Showclit and Ticketbiscuit are two little pissant outfits geared to handle simple general admission tickets. The public demand for tickets for a major onsale would knock them offline...for days...if not forever, and probably also destroy the integrity and accuracy of the transaction logs and accounting for ticket sales.

But where you really show your ignorance is that the major arena venues also have pro teams as tenants, and pro teams require complex solutions to manage their seat inventories, season account billings, and premium privileges.

No way any company like these two will ever cut it. There are only 3 or 4 with a realistic chance to compete right now, and they are all using platforms and software design which is yet to be proven in the arena marketplace.

Jason Kincaid - if you are the author of this garbage, you are an irresponsible journalistic fool wannabe.

Feb 22 03:19 PM

[User 369030:]

Live Nation and Ticketmaster want to squeeze out every promoter, agent and other ticketing companies from the business. But I don't think this merger will go through and they will end up with millions in Attorneys and Lobbyist fees. There stocks are tanking because smart investors now know that this is merger is dead. Live Nation is trading at $2.73 and will go down more.

Mar 03 07:53 PM