THE MERGER AND THE DAMAGE DONE: HOW THE DOJ ENABLED AN EMPIRE IN THE LIVE MUSIC INDUSTRY JOSH BAKER * In 2010, the Antitrust Division of the Department of Justice approved the merger of Ticketmaster and Live Nation, who combined to form Live Nation Entertainment. This paper revisits the Department's antitrust analysis from its merger investigation in light of recent trends in the live music industry. It explores alternative theories of antitrust scrutiny that the Department either did not emphasize or omitted discussion of. Finally, it concludes that the merger posed a more significant threat to competition than the Department acknowledged, and that the remedies the Department imposed as conditions on the merger were insufficient to preserve effective competition in the relevant markets. The Department missed a tremendous opportunity to establish longterm competition in the nascent market for vertically integrated services. Artists, competing service providers, and ultimately consumers are worse off for it.
INTRODUCTION ..........................................................................................................77 I. THE LIVE MUSIC INDUSTRY ............................................................................78 A. Yesterday: A Brief History of the Music Industry ....................................78 B. A Day In The Life: Staging a Concert ......................................................79 C. Hello, Goodbye: Recent Industry Developments .....................................80 D. Come Together: Live Nation, Ticketmaster, and the Merger ..................81 1. Live Nation: History and Strategy ......................................................81 2. Ticketmaster: History and Strategy ....................................................83 3. The Merger Investigation and Consent Agreement ............................84 II. THE DEPARTMENT OF JUSTICE’S ANTITRUST ANALYSIS .................................85 A. Jigsaw Puzzle: Horizontal Components of the Merger............................86 1. The Market for Primary Ticketing Services ........................................86 2. The Market for Integrated Service Packages ......................................90 B. All Down The Line: Vertical Components of the Merger ........................92 1. Anticompetitive Concerns of Vertical Integration ..............................93 2. The Firms’ Asserted Procompetitive Justifications ............................96 *
J.D., 2013, New York University School of Law; B.A., 2009, University of Maryland. This Article was originally written for Prof. Daniel Rubinfeld's seminar on Antitrust Law and Economics. I would like to thank Prof. Rubinfeld and the members of the JIPEL staff for their assistance with this Article.
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