Schumer Takes on Ticketmaster

Includes: LYV, TKTM
by: Julia Boorstin

If you're gearing up for the summer concert season New York Senator Chuck Schumer has made it his mission to help you, by ensuring that consumers get a fair chance to buy those tickets before resellers jack up prices. He's proposing legislation that follows months of criticism of Ticketmaster (TKTM) and its proposed merger with Live Nation (NYSE:LYV).

The big surprise?

Ticketmaster CEO Irving Azoff says the company is on board with Schumer, though these rules would effectively curtail the company's ticket reselling sites.

Schumer proposes a two-day waiting period after tickets go on sale to the public before resellers are allowed to snap them up for the secondary market. Ticket resellers would be required to register with the Federal Trade Commission to prevent fake sales. And all tickets would have to be printed with the date and time of sale to make sure that no one tries to cheat the system. Schumer accuses resellers of "hoarding" tickets, saying he's simply trying to create a fair system.

This challenges Ticketmaster's practice of reselling tickets at higher prices on its resale site.

This issue emerged as a hot topic when Bruce Springsteen tickets sold out at just minutes after they went on sale and fans of The Boss were directed to to buy the very same tickets at higher prices.

The fact that Ticketmaster owns the site raised some eyebrows, to say the least.

Ticketmaster said it was a mistake, a technology glitch was at fault.

Yet, Ticketmaster's CEO supports Schumer's proposal, acknowledging that the industry needs "far reaching changes to better protect consumers and ensure fair access to tickets." Nothing encourages cooperation like a couple of subpoenas. Ticketmaster's response follows Friday's news that the Justice Department and other government organizations are requesting more information from Ticketmaster about its resale business.

And of course Ticketmaster is motivated to make nice and clean up its image. The world's largest ticketing company is attempting to merge with the world's largest concert promoter, Live Nation. The merger is currently under review by the Justice Department, which is evaluating whether it is potentially anti-competitive.

Barry Diller, chairman of Ticketmaster, got involved in the company's sparring with Schumer last month, attacking his "always-to-be-expected shameless grandstanding" on the topic. Now that Ticketmaster is getting behind Schumer, Diller hasn't said a peep publicly on the topic.

We'll see if he changes his tune, and if this can help the company get its merger approved.