Live Nation, Ticketmaster face skeptical lawmakers
WASHINGTON Feb 24 (Reuters) - The chief executives of Live Nation (LYV.N) and Ticketmaster TKTM.O got a skeptical reception on Capitol Hill on Tuesday, with a leading lawmaker pressing Ticketmaster to sell a reselling subsidiary.
During the hearing, Sen. Charles Schumer urged Ticketmaster CEO Irving Azoff to sell TicketsNow, which gave its parent company a public relations black eye just before the merger was announced.
In that incident, fans of Bruce Springsteen who signed on to Ticketmaster when concert tickets went on sale were told that they had sold out within minutes, and were directed to the reseller which had considerably more expensive tickets.
Schumer seemed skeptical that the problem was caused by a computer glitch, as Ticketmaster had said, and asked Azoff to sell the subsidiary.
"Your answers obviously don't satisfy me. Shouldn't Ticketmaster sell TicketsNow?" he asked during a hearing of the Senate's antitrust subcommittee.
Azoff declined to reply, saying he didn't have an opinion on whether the company should be sold.
"Personally, I don't believe there should be a secondary market at all. Scalping should be illegal," Azoff said. "I wouldn't have bought it."
Sen. Orrin Hatch of Utah and Sen. Amy Klobuchar of Minnesota expressed concern about the high and rising price of concert tickets.
But Azoff and Live Nation CEO Michael Rapino argued that music piracy had changed the economics of the industry -- artists no longer toured to sell albums -- and the faltering U.S. economy worsened matters.
"I can hope that the economy gets better or I can seek a more proactive approach to protect our employees, reward our shareholders and better service artists and fans," said Rapino.
That proactive approach is a merger of the world's largest concert promoting company with the top U.S. ticket seller, each of which has made tentative but well-funded forays into the others' business.
David Balto, a fellow at the Center for American Progress, disagreed that the merger would create cost-saving efficiencies because of the two companies' market power.
"I think it's extremely unlikely that these convenience and service charges are going to go down," he said. "This is a competitively unhealthy market." (Reporting by Diane Bartz, editing by Richard Chang)