By Jim McCarthy Feb 27, 2009 0 comments

Revising My Opinion on the LN-TM Merger

Actually, not my opinion of it, but of whether or not it will actually be allowed to take place by the DOJ.  Initially, I felt that it was about 80 to 90% likely to go through, on the basic grounds that even this combined company wouldn’t have monopolistic pricing power because the market is much broader than the two companies represent and because the marketplace of buyers is firmly in control when it comes to determining the worth of tickets.

Since then, a couple things happened:  the Bruce Springsteen brou-ha-ha about Ticketsnow and the Federal Government taking a vastly more activist role in the economy.

So I’m now of the belief that this deal is less than 50% likely to be approved by DOJ.  Sen. Schumer, who represents Bruce Springsteen in New Jersey, has told TM to divest itself of Ticketsnow, which is a clear signal that that is a necessary, if not sufficient, pre-condition for approval on the merger.

Also, AEG has said that it will consider leaving the TM service if the merger is approved (which could be good news for Tickets.com since they’re the obvious alternative).  Now, that could be a negotiating tactic, but it’s also a credible threat.

All in all, the complexity of this getting done has increased dramatically.  Besides all these logical reasons, there’s also the very simple idea that the public accolades the Obama administration could get for putting the kaibosh on this marriage is too good for them to resist.  Easy money, in a sense.

We shall see.

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