Ticketmaster dominance in Canada entrenched by planned merger

Canadians hoping for a strong competitor against Ticketmaster Entertainment Inc. in the event-ticket business now face what one critic calls the "disturbing" likelihood that the U.S. company's dominance will be reinforced.

Ticketmaster and event promoter Live Nation Inc. confirmed Tuesday that they plan to combine their acts in a so-called merger of equals. The combination of North America's biggest ticket distributor and biggest venue operator would operate under the name Live Nation Entertainment.

The arrangement between the two Los Angeles-based companies is likely to face intense scrutiny from U.S. antitrust authorities, especially because Live Nation recently developed its own ticketing service working in competition against Ticketmaster.

That service is just gaining momentum in the United States and Live Nation was planning to extend it early next year to Canada, where Ticketmaster has overwhelming dominance of outside ticket sales for major entertainment and sports venues.

A combined company would have enhanced power over both performers and audiences.

The proposed merger "sounds like it's a disturbing development," said Mel Fruitman, vice-president of the Consumers' Association of Canada.

"The original word was that Live Nation said they were going to go out there and compete with Ticketmaster for the sale of tickets. Now they've gone in the opposite direction."

Ticketmaster is estimated to sell tickets on behalf of more than 80 per cent of the major arenas and stadiums in the United States, and it has a similar market share in Canada, said Fruitman.

"They control at the moment most of the major venues, and it's my understanding that many of those contracts were due to expire within the next year or so, and we were looking forward to seeing some competition," Fruitman added.

"This combination with Live Nation, who controls the venues, with the ticket sellers is certainly something that the Competition Bureau needs to look at, because that really is locking up the industry."

However, he could not say what leverage the Canadian government could place on a merger between two big American companies.

Fruitman said Ticketmaster generates a significant volume of complaints to the Consumers' Association, particularly over the array of extra charges it places on tickets.

"The one that annoys most, certainly annoys me the most, is when I say I will print out my own tickets, and they say, `Oh, we're going to charge you for that.' So they charge you for saving them the cost of printing the tickets how perverse is that?"

There also are concerns about a lack of choice for online purchases and about Ticketmaster's dual sales arrangement: it sells tickets at its Ticketmaster phone and online operation and also provides a reselling service for already purchased tickets through TicketsNow.com.

"Tickets seem to sell out almost immediately," Fruitman said. "There's suspicion that they are flipping tickets over to TicketsNow."

This has provoked attempted class-action litigation in Ontario, where lawyers say Ontario's anti-scalping law has been violated and people have been overcharged at Ticketmaster and TicketsNow.com since February 2007.

Two law firms claim Ticketmaster and other defendants owe $500 million in damages to victimized event-goers.

Ticketmaster has insisted its system is fair and doesn't violate the law.

There also have been privacy worries, with the federal privacy commissioner saying last April that Ticketmaster Canada Ltd. was violating federal legislation but had since brought its practices up to standard.

"It's not very user-friendly, and has never been user-friendly," the Consumers' Association's Fruitman said.