According to a Bloomberg story today, Comcast is getting involved in the Ticketmaster-Live Nation merger.
Very quietly, Comcast has been expanding its lines of business well beyond the core cable business, with acquisitions in the last few years like Fandango, Daily Candy and others. The company also owns the tickest the Philadelphia 76ers, the Philadelphia Flyers and World Wrestling Entertainment.
That’s right. They’re a ticketing company via their subsidiary New Era Tickets.
Here’s the key tidbit:
“Comcast Corp. is working with Ticketmaster Entertainment Inc. and Live Nation Inc. to help the two companies salvage their music industry merger now under U.S. antitrust scrutiny, said two people familiar with the matter.
Comcast, based in Philadelphia, is the largest U.S. cable operator. The company may receive spinoffs of ticketing software and client contracts as part of a proposal to alleviate Justice Department concerns that the Ticketmaster-Live Nation deal would inhibit competition, said the people, who declined to be identified because the deliberations are private.”
In other words, by relinquishing some contracts to a formidable competitor, TM and Live Nation could satisfy the Justice Department’s concerns that the new combined company won’t be a monopoly.
But since the DOJ has been looking at this as a “concert business” issue, that would mean that these contracts would have to be concert-related for it to make sense. That leads me to believe that the clients on the table are AEG (owners of Staples Center and AEG Live, and Ticketmaster’s current biggest concert customer) and Madison Square Garden (which owns and/or operates a lot of venues other than just Madison Square Garden.)
It seems like those companies, who have a contract with Ticketmaster, would need to give their approval to have their business “given” to Comcast.
And why would they say yes to that? You’ll recall that AEG was already considering a new ticketing partner as of a few weeks ago, and presumably that process continues.
If I were AEG or MSG and Comcast wanted to do this, and TM and LN both needed it to happen, I wouldn’t do this without asking for something.
Specifically, AEG or MSG should ask to be joint venture partners in whatever ticketing entity gets these TM and LN contracts.
One of the key things to remember is that the ticketing software itself, and even the processes behind it, have become commodities, replaceable in fairly short order, as Live Nation itself showed by dumping Ticketmaster and missing not much of a beat.
What’s irreplaceable is the ability to draw an audience, and through its venues and teams, MSG and AEG have that. They hold the power here.
I continue to think this merger gets approved, but the price to TM and LN could be going up. If the result is a powerful joint venture between Comcast and AEG and/or MSG, the combined TM-LN company would immediately lose one or two more major customers.
And perhaps more importantly, find itself competing hard to keep the rest of them with a formidable new foe.
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