Concessions Given for Near-Universal Ticket Concession

Live Nation and Ticketmaster Entertainment Inc. finally cleared the last hurdle to their much-discussed merger on Monday as they garnered approval from the U.S. Department of Justice and the Canadian Bureau of Competition, once several concessions are met.

Ticketmaster will have to license its Ticketmaster Host ticketing software to Los Angeles-based concert promoter and venue manager Anschutz Entertainment Group, which was one of the louder voices of protest during the discussion of the merger.

Media reports last week had Live Nation potentially selling several of its venues to AEG, but that concession did not materialize.

Ticketmaster will also have to divest its self-ticketing subsidiary, Paciolan, to yet another promoter and manager, Comcast-Spectacor.

Finally, the new Live Nation Entertainment will be under a 10-year court order to not take any retaliatory steps against any venue that chooses to go with another ticketing company.

Once the licensing and divestiture measures are complete, the playing field will theoretically be more level, with a "big three" of the new Live Nation Entertainment, AEG, and Comcast-Spectacor vying to promote concerts and manage venues nationwide.

Since the announcement of the proposed merger in February 2009, the two companies have been under the microscope.

Flashbacks to the famous mid-1990s battles between Pearl Jam and Ticketmaster were popping up, as many said the deal would create a Goliath that would control venues, promotion, and ticketing, squashing any competition.

Domestically, some thought it would be a referendum on the Obama administration's stance on mergers. A prominent senator, Wisconsin Democrat Herb Kohl, was at the forefront of the federal scrutiny, staging subcommittee hearings on the merger and making public statements urging scrutiny on the part of the Justice Department.

The deal also came under fire from the United Kingdom Competition Commission for the same worries of stifled competition. The U.K. Competition Commission eventually gave its blessing in December 2009.

The structure of the new Live Nation Entertainment will see the former Live Nation shareholders with a 49.99 percent in the new company and the former Ticketmaster shareholders holding a 50.01 percent stake.

The combined company will be led by Live Nation's Michael Rapino in the role of CEO and president and Ticketmaster’s Irving Azoff as executive chairman.

Barry Diller, the chairman of former Ticketmaster parent IAC/InterActiveCorp will serve as chairman of Live Nation Entertainment. The board will consist of 14 directors, seven from each company.

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Rick Johnston is an associate editor of Portfolio.com.