Two Sides To The Merger

The live music model is broken because they broke it. It would fix itself if it were allowed to continue and Live Nation was prevented from using its ponzi scheme to announce the next deal without making the last one work.

Wishful thinking?…no…this is from LN’s very own claim that the business won’t survive as it is. But the difference between allowing this one to fail, as opposed to say GM, is that this will create opportunities for new entrepreneurs. Agents will have no choice but to find someone to make offers. And they will find them, if not create them.

The LN model would work if they negotiated each market separately, and paid $100K for an act in Indianapolis that they are paying $200K here. But they can’t help themselves. They are the ones stuck in a broken model, the tour offer. It doesn’t work, and their attempt to keep all the cookies for themselves is what has made them too fat to play with the other children.

What they need to do is have their people learn how to horse trade instead of trying to corral every bronco on the plain. That’s how they could use their power that they amassed to make money. It would be so easy for them. Yes they might lose a few battles such as Merriweather over Nissan here. But they need to get over that, and start making money with the markets they can win on by having the best venues, not by trying to control the ones they don’t, perhaps even getting rid of some.

Imagine if Starbucks tried to force everyone to buy coffee at the shops that people didn’t want to go to, by lowering their prices storewide. The reduction in overall profit would far outweigh whatever they made by getting people to go to the underperforming shops.

But I can’t control or change them. Well, maybe. We’ll see.

Seth Hurwitz


I gave up after watching the officials we elected conduct the steroids hearings.  It was so embarrassing that I wrote to one of the Senators and told him I was ashamed to be an American after their total display of ignorance and grandstanding.  

BTW, I’m happy to see that you’re subconsciously adopting my view of antitrust.  Eventually all so-called monopolies become bureaucracies and some clever entrepreneur takes their business away.  Some day long after I’m dead, the government will disband the Antitrust divisions of the FTC and the Justice Department and stop wasting the taxpayers’ money on this nonsense.  

I remember that at the end of the semester in my Law and Economics class I looked back through all the seminal cases involving the government setting aside mergers as anticompetitive.  As I leafed through the case names, I realized that the common thread of all the companies on the other side of the v. (you know, where it says The United States v. Schwinn, White Trucks, Sears Roebuck, Continental Airlines, etc.) was that they ALL went bankrupt.   The government blocked the "anti-competitive" merger that turned out to be their last remaining hope of solvency.  A few years later the companies tanked because they couldn’t compete.  It would be really nice if the legislators passing all these dumb laws had even the vaguest concept of economics.

Peter Paterno

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