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Live Nation-Ticketmaster merger raises concerns for Spaceland, indie promoters

January 29, 2010 |  5:00 am

SPACELAND_LAT_6

With concert giants Live Nation and AEG based in Los Angeles, there's little room for an independent promoter to maneuver. Yet Mitchell Frank and his Spaceland Productions have managed to thrive.

Putting on shows under the Spaceland brand since March 1995, Frank hosts concerts at just three Silver Lake and Echo Park venues -- Spaceland, the Echo and the Echoplex. That would seem to put Frank below the radar of most major operations, but in the wake of the Department of Justice giving the green light, albeit with concessions, to a merger between promoter/venue owner Live Nation and ticketing agency/management firm Ticketmaster Entertainment, Frank suddenly finds himself in the unenviable position of making money for the competitor. 

Spaceland Productions has 15 months, Frank said, remaining on an exclusive contract with TicketWeb, the once-indie ticket seller now owned by Ticketmaster. "To make money for that behemoth, it turns my stomach," Frank said. "I’m an indie promoter, and that’s what I do. So it’s kind of tough to give money to the mother ship."

Frank hasn't been as vocal as some of his peers in the independent promotion community, such as Jerry Mickelson at Chicago's Jam Productions or Seth Hurwitz with I.M.P., which owns Washington, D.C.'s 9:30 Club and operates the Merriweather Post Pavilion in Columbia, Md. But Frank was interviewed by the Justice Department and expressed concerns that he said appear to have gone unheard, largely that an approved partnership would have him working -- and potentially providing information for -- his competitor.

The newly formed Live Nation Entertainment is an instant, one-stop shop for artists and promoters, and the Justice Department is calling for a "firewall" to prevent the sharing of information between departments. The new firm has the ability to book concerts, sell tickets and merchandise, and, with management company Front Line, direct access to such name acts as the Eagles, Jimmy Buffett, Neil Diamond, Van Halen, Fleetwood Mac, Christina Aguilera and more. 

"That’s where the concern is," said Jordan Kurland, whose Zeitgeist Management represents Death Cab for Cutie, She & Him, Grizzly Bear and more. "When you look at the intersection of Ticketmaster, Live Nation and Front Line? Information is power, and they will have a lot of it."

Live Nation controls more than just mega-venues such as Verizon Wireless Amphitheater in Irvine. In Los Angeles, the Wiltern, the Hollywood Palladium and the House of Blues fall under the Live Nation banner. The company has been more aggressive in entering the club market in New York, booking at such key venues as the intimate Gramercy Theatre, the Fillmore and Roseland Ballroom, the former two falling at capacities of about 1,000 and under. 

"I made it very clear to TicketWeb that I wasn't going to go along for the ride," Frank said. "I’m sure they’re going to make me stay a year. The Department of Justice should have had an out for guys like me, guys who don’t want to give all of their money to their competitor and don’t want our competitor to have all of our competitive information at their fingertips. ‘Don’t worry, we’ll look the other direction when you pull up that report.’ ”

Frank intends to open a box office to sell advance tickets, as well as make tickets available at more local venues. He stresses he has had no complaints with TicketWeb and is even OK with being "an arm's distance" from Live Nation.

But like I.M.P.'s Hurwtiz and Jam's Mickelson, he's expressing skepticism that independent promoters will be able to compete. Other indie promoters, such as Another Planet in San Francisco, the Bowery Presents in New York and Nederlander Concerts here in Los Angeles, declined to comment.

"We book shows in venues where they have contracts," Mickelson told the Chicago Tribune. "There is supposed to be a firewall [separating Ticketmaster shows done with outside promoters], but that won’t work when you’re dealing with these people."

Frank has more long-term fears relating to Live Nation entering the club market in Los Angeles.

"First of all, who owns the data?" Frank asked. "It’s my show, so how will they use that data for their own uses? TicketWeb through Ticketmaster could do studies using my data. Therefore, Live Nation would know what shows my crowd is going to, what the demographic is, what neighborhood, what the ZIP Codes are. TicketWeb could easily do a published study. It’s unfair competition. That becomes the killer."

In an interview Thursday with Justice Department representatives, in which quotes could only be attributed to the entity as a whole, it was stated that "preserving competition overall in the ticketing space" was the goal of the concessions placed upon Live Nation and Ticketmaster. Under the agreement, Ticketmaster will give Anschutz Entertainment Group access to its technology so that AEG,  which owns and manages nearly 100 venues including Staples Center,  can create its own ticketing service. 

Addressing the company's vertical integration powers would have been a near impossibility, said one Washington, D.C.-based antitrust expert familiar with the proceedings. Many, including Mickelson in the Tribune, have cited the 1948 U.S. Supreme Court antitrust decision against Paramount Pictures, which essentially stated that Hollywood studios could not also own the theaters that had exclusive rights to show their films.

"The courts have been very favorable to vertical integration for 40 years," said the antitrust expert, who agreed to speak only on condition of anonymity. "I like going back to Paramount vs. U.S. also, but that’s a very old case, and there have not been any vertical mergers blocked in about 40 years."

The Department of Justice said that breaking up prior contracts with Ticketmaster and TicketWeb would have done little to preserve competition in the ticketing space, adding that "a lot of the customers would not have wanted that." The department estimates that 20% of Ticketmaster's exclusive arrangements will expire each year and intends for venues and promoters to have more options when they do.

As The Times' earlier story noted, Ticketmaster would also be required to divest a subsidiary that provides software for venue operators to sell their own tickets. Comcast Corp.'s sporting events division, Comcast Spectacor, has signed a letter of intent to acquire the Irvine-based subsidiary, Paciolan.

While Live Nation failed at competing with Ticketmaster in starting its own ticketing service, the Department of Justice noted that AEG will have a leg up, using, under its agreement, the same Ticketmaster platform venues already have in place.

"It’s not a product that has to be adapted to the United States, like Live Nation’s product did," said the Justice Department.

Nevertheless, it won't be an option to Spaceland's Frank once his deal with TicketWeb is up. In Los Angeles, AEG through its relationship with Goldenvoice is an even greater competitor with the club. Goldenvoice's three-day Coachella Valley Music & Arts Festival books many Spaceland and Echoplex-level acts. 

"AEG got a pass," Frank said. "But what about us? So my two biggest competitors have the biggest competitive edge because of this deal. I’m just frustrated right now."

There are some, however, who aren't.

While Live Nation and Ticketmaster are not commenting, Nine Inch Nails and No Doubt manager Jim Guerinot has become a fan. He earlier told Pop & Hiss, "I can see where there would be concern from independent promoters, but on all my tours, I’ve been able to  lean into indies where I wanted to and where it’s more effective for the fans."

The Washington, D.C.-based Future of Music Coalition, a non-profit education and advocacy group for musicians, does not have a stance on the merger, but director Michael Bracy is encouraging the industry to be vocal. The Department of Justice is currently receiving comments on the ruling, as it will for close to another 60 days.

"This is an important time to get on the record, particularly for those who feel it didn’t go far enough," Bracy said. "Speak now, or forever hold your peace."

-- Todd Martens

RELATED:

Live Nation-Ticketmaster merger gets thumbs up from No Doubt/Nine Inch Nails' manager

Ticketmaster-Live Nation merger gets Justice Department's approval

Chicago Tribune: Live Nation-Ticketmaster merger puts Chicago institution Jam on the ropes

Chicago Tribune: Live Nation-Ticketmaster deal set for final OK; fans and Chicago-based Jam Productions lose

Photo: Spaceland's Mitchell Frank, photographed outside his club in 2002. Credit: Robert Gauthier / Los Angeles Times

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