This entry will point out this May 22 article published by Ticket News which offers some additional insight into the recent Congressional hearings and, perhaps more importantly, certain aspects of the proposed merger not addressed on Capitol Hill. Some interesting passages include the following:
"But an area of dispute overlooked during the hearings involves the use of ticketing software by venues that ticket in house, specifically (Steve) Luukko's Comcast-Spectacor. The company launched New Era Tickets in 2004 and subsequently Comcasttix.com, the company's own in house ticketing provider, after investing in Paciolan Technologies, which provides ticketing solutions software and allows venues complete control over the ticketing process, such as setting convenience fees and collecting data. In 2007, however, Ticketmaster bought Paciolan Technologies and now the company is a subsidiary of Ticketmaster, thus providing ticketing software solutions to its competitors.
"Luukko told the committee that despite Ticketmaster owning Paciolan, there are plenty of other software options for venues that choose to ticket their events themselves. He mentioned his company is in the process of developing their own software and that New Era Tickets and Comcasttix.com are still in competition with Ticketmaster regardless of what software they run.
"Robert Doyle of Doyle, Barlow Mazard in Washington DC, an antitrust practitioner and panelist at the House hearing, told TicketNews that Ticketmaster owning Paciolan is an example of Ticketmaster's dominance in the industry being 'even greater than one would think.' He went on to ask rhetorically, 'How fully competitive could Paciolan be against Ticketmaster if it is in fact the technology that Ticketmaster leases to third parties?'"
The concept to be taken from this and other recent discussion of this deal is that the complexities presented here are so immense that even those involved with the companies are uncertain as to how the merger will affect the relevant markets involved.
Usually at this stage in an industry-changing merger such as this the more complex aspects are fairly well-known and established as either problematic or non-problematic from an antitrust perspective. This is an rare situation where the secondary vertical and horizontal issues have clearly increased in terms of complexity, suggesting even greater difficulties where the HSR review is concerned.
It can only be presumed that the companies are at this time working very closely with the DOJ in presenting their evidence and arguments for this deal going through. The effort required in this case will be extraordinary, to say the least. Given the course of events to this point there continues to be little expectation that the companies will succeed in obtaining DOJ consent without conditions that will ultimately destroy the rationale of the merger.
