National merger felt at venues

Those attending events at Van Andel Arena may see the Ticketmaster name in more places than on their tickets for the next year or so, as the building’s exclusive ticket seller is likely to be in the news. And not just because of the company’s proposed merger with Live Nation, also an arena favorite.

Two federal lawmakers are calling for a probe of Ticketmaster Entertainment Inc.

Sen. Charles Schumer, D-N.Y., and Rep. Bill Pascrell, D-N.J., want to known why the ticketing giant has sent potential ticket buyers to its own ticket-reselling Web Site, where popular concerts and other events are priced for sale at several times the published price.

Schumer called it a “classic bait-and-switch” move.

A class action suit has been filed in Canada against Ticketmaster for allegedly selling tickets to popular events at inflated prices. A Toronto law firm has filed the lawsuit on “behalf of all people who purchased event tickets in Ontario” from Ticketmaster.

The suit is reportedly seeking damages of $411 million at this point.

An approved merger of Ticketmaster and Live Nation Inc., the largest concert promoter that owns 140 venues worldwide, would reunite the two companies in a very real sense. Live Nation used Ticketmaster as its ticket seller until last year when the promoter started its own ticket-selling service. At the time, industry reports estimated that the Live Nation ticket service would cost Ticketmaster about 15 percent of its total revenue.

Talk of the merger has been good news recently for the publicly held companies and for Wall Street. When the market opened last week, Ticketmaster was selling at $6.91 a share on NASDAQ — more than double its 52-week low of $3.33 a share. At the same time, Live Nation was going for $5.28 on the NYSE, well above its 52-week low of $2.73.

Associated Press, however, reported the merger could face tight antitrust scrutiny by both the Federal Trade Commission and the Justice Department. If so, a review by both agencies could take months to complete and maybe as long as a year. The Justice Department reportedly began its investigation last week.

Both firms now sell tickets and promote concerts. In addition to Live Nation’s ticket service, Ticketmaster bought Front Line Management last year. Front Line is seen by some in the industry as the nation’s largest artist management company.

“I’ve heard that (merger) conversations have been going on for a while, so it’s premature for me to comment on anything until we know exactly what the outcome is,” said Rich MacKeigan, regional general manager of SMG, the management firm that operates the arena and DeVos Place for the Convention and Arena Authority.

“That being said, we’re a good partner with Live Nation and we’re a good partner with Ticketmaster. So my hopes would be that this means good things for us,” he said of a merger.

Live Nation reported $4.1 billion in sales revenue for 2007 and booked concerts by The Police, Van Halen, Kid Rock and others at the arena last year. Ticketmaster sold 141 million tickets worldwide in 2007; it has the ticketing contract for the arena and DeVos Place for two more years. 

Twenty-six concerts played the arena during the last fiscal year. Those shows drew 204,000 customers and were worth $1.7 million in event income to the building, according to the FY08 financial statements. Although the concerts were only 22 percent of the total events held at the arena that year, revenue from the shows accounted for 56 percent of the arena’s total event revenue.

Ticketmaster replaced Tickets Plus, now Star Tickets, as the arena’s official ticket seller a few years after the arena opened. MacKeigan said Live Nation promoted about 80 percent of the concerts held in the arena when the building opened, but now promotes about 60 percent, as more promoters have gotten involved with the arena.

What would a merger mean for ticket prices here?

“I don’t know; it really depends on the business terms,” said MacKeigan. “What I would say generically — without speaking to this merger specifically — is ticket prices have a direct relation to the artists’ guarantees, and I don’t know if this merger would have an impact on that or not.”