Government Resource Proposal

Clayton Act, Section 7

I am using this government resource to help describe why Live Nation is unethical for the U.S. Live Music industry. Live Nation has seen phenomenal growth over the past 10 years, and through the merger with Ticketmaster, Live Nation is certainly a forced to be reckoned with. Other related companies, such as Atlantic Records or Warner music, fear Live Nation may use its large market cap and competitive position to extend their services into A&R, recorded music, etc. Although Michael Rapino, in an interview with fortune magazine, noted he did not wish to extend the services of his companies into recorded music, acquiring Atlantic Records may be an incredible investment.

A white paper examining the anti-trust issues of the merger between Live Nation and Ticketmaster referenced a possible violation of Section 7 of the Clayton Act, so I wanted to know what the act actually said. Section 7 of the Clayton Act prohibits mergers and acquisitions where the effect “may be substantially to lessen competition, or to tend to create a monopoly.” So then I looked to Live Nation’s competitors—their biggest competitor was Caesar’s entertainment group and Liberty Media group, who still host live events, but have vastly different offerings. For example, Caesars’ may draw revenue from every aspect of their casino (food, drink, hotels, and live music), while Live Nation draws revenue from artist management, ticket sales, venue management, and sponsors. There wasn’t a single competitor who had similar market offerings at a similar market cap, so it is safe to say Live Nation violates section 7, since it has a monopoly.

“The Antitrust Laws.” Federal Trade Commission. Federal Trade Commission, n.d. Web. 11 Dec. 2014.


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