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“I think this combination will breathe much-needed life into an industry that is hurting. I look forward to the challenges and rewards it will bring.”
——Peter Luuko of Comcast-Spectacor
IRVING & MICHAEL GO TO WASHINGTON, ROUND TWO
Bloodied but Unbowed, the Duo Decides the Best Defense Is a Good Offense
Two days after taking their lumps before the Senate Antitrust Subcommittee, Irving Azoff and Michael Rapino returned to Capitol Hill to face the music yet again. Today’s hosts: the House Subcommittee on Courts and Competition Policy, chaired by Hank Johnson (D-GA).

Asked Bill Pascrell (D-NJ) as he introduced the witnesses, “Is it Azoff or Assoff,” suggesting that Irving isn’t as big a rock star in DC as he is back home in L.A.

Having learned his lesson during heavy grilling on Tuesday, Rapino was proactive, and somewhat less jittery, in his prepared opening statement. Noting that he’ll become an American citizen in the next six months, and that his business operates at a 4% margin, the Live Nation chief compared the proposed merger partners to rival AEG, describing it in effect as the 800-pound gorilla of the concert industry, pointing out that it was owned by Phil Anschutz, “the 31st richest man in America,” and claiming that the AEG-owned Staples Center was worth more than LN and Ticketmaster combined.

Azoff, who followed, offered a detailed and plausible explanation of the technical glitches that resulted in the Springsteen ticketing fiasco, a devastating PR hit at the worst possible moment for the prospective merger partners.

Competition attorney Robert Doyle focused on the ticketing business monopoly that would be caused by the merger, although the situation is no different than it was before Live Nation launched its own ticketing service, just prior to the announcement that the two companies intended to merge. Doyle also quoted from Ethan Smith’s WSJ profile on Azoff in an apparent effort to paint him as an arrogant Hollywood gunslinger.

Then came an actual endorsement of the merger from Comcast-Spectacor President/COO Peter Luuko, whose company owners the Philadelphia 76ers and Flyers as well as the city’s primary arena, the Wachovia Center. Said Luuko in his prepared statement: “I believe that the merger of Ticketmaster and Live Nation is an exciting combination that has the potential to reinvigorate the industry at a time when change of direction is drastically needed. The economy is distressed right now, and as a result, many sports teams and other live entertainment acts are struggling to sell event tickets. This industry needs some new and fresh ideas—especially now—so that we can provide consumers with the much-needed leisure activities that keep their spirits up and our economy moving in the right direction.

“I think the merger will bring welcome change. If together Ticketmaster and Live Nation can sell more tickets, and thereby provide more content to venues and consumers, this will be a huge improvement over the status quo. I also believe that this type of strategic combination will encourage other competitors (like myself) to be more creative in their offerings and to compete more effectively overall. I certainly don’t have any reason to believe that the combination will in any way stifle competition. There are a lot of ticketing companies (our own included), promoters, venues and artist managers out there eager to do business. Nor do I think that my buildings will be less likely to attract or secure the same level of concert talent that Live Nation and many others have offered us before.

"At the end of the day, the artist has the ultimate control over where he or she wants to play. And in a city like Philadelphia, we know that artists want to be at the Wachovia Center, regardless of the fact that Ticketmaster doesn’t provide ticketing services to that venue. In fact, we currently have a Live Nation-promoted band—Nickleback—scheduled to play there next month.

“Again, I think this combination with breathe much needed life into an industry that is hurting. I look forward to the challenges and rewards it will bring.”

After a generally positive assessment by Vanderbilt University prof Luke Froeb, damning testimony from Ed Mierzwinski from the U.S. Public Interest Research Group and a rare acknowledgment of the matter of artist rights from Brad Sherman (D-CA), the subcommittee recessed. But keep your players active, boys and girls—there’s more to come. 

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