February 10, 2009 2:18 PM

Latham, Wachtell on Controversial Ticketmaster-Live Nation Deal

Posted by Zach Lowe

The good news: Latham & Watkins guided the concert promoting giant Live Nation to its $400 million takeover of Ticketmaster (repped by Wachtell, Lipton, Rosen & Katz) to create a concert-promoting, ticket-selling behemoth worth about $2.5 billion. 

The bad news: Lawyers on both sides are probably not done with this transaction, since high-profile critics from Bruce Springsteen to U.S. senator Charles Schumer have called for a rigorous antitrust investigation of the deal, according to Reuters and Bloomberg. Given this level of attention, it's not surprising that lawyers on the deal weren't exactly ready to gush about it when contacted by The Am Law Daily. 

We spoke briefly with James Beaubien, cohead of Latham's corporate department in Los Angeles, where he's worked closely with Live Nation's in-house chief, Michael Rowles, for nearly three years. The two met through mutual friends, and Latham has been doing Live Nation's deal work ever since. 

Beaubien says it's unusual to get to work on a "merger of equals," in which both parties come from positions of strength and can make demands for representations from each other on a level basis.

As for the antitrust issues, Beaubien won't comment, except to say that he loves Bruce Springsteen.

"I don't want him criticizing our deal," he says with a laugh.

Pamela Seymon, the lead Wachtell corporate partner representing Ticketmaster, did not immediately return a call seeking comment. Seymon has long represented Barry Diller, the media mogul who owns (among other things) Ticketmaster parent IAC, an Internet conglomerate that also includes Expedia and the Ask.com search engine (formerly Ask Jeeves).  Seymon advised Diller and IAC during a buying spree in 2002 and 2003 that included the acquisition of Ticketmaster, according to this 2003 story from Corporate Counsel, an Am Law Daily sibling publication.

We also reached out to Wachtell antitrust partners Joseph Larson and David Schwartz because of the scrutiny this deal seems likely to get from the Federal Trade Commission and perhaps the Department of Justice.

The key concern, especially among smaller ticket-sellers and some artists: the merged company will be able to bypass traditional ticket-sales methods and sell tickets to Live Nation shows directly via Ticketmaster's auction resale system, TicketsNow, Wired reports.

It was precisely this practice that aroused Springsteen's ire last week, when he learned that Ticketmaster had shut his fans out of buying tickets through its regular system and had instead steered them to TicketsNow, where seats with a face value of $95 were being offered for up to $2,000. Ticketmaster already faces one lawsuit in Canada in connection with TicketsNow and a second in Los Angeles in which it is accused of trying to monopolize the ticket resale market, Bloomberg reports.

Larson did not immediately return a message and Schwartz declined to comment. 

Another interesting antitrust nugget, courtesy of Bloomberg: The deal will give Live Nation access to some internal records of its main promotions rival, Anschutz Co.'s AEG Live, since Anschutz uses Ticketmaster's sales platform. 

In the deal, Ticketmaster shareholders will receive 1.384 shares of Live Nation stock for each Ticketmaster share they own. That values Ticketmaster at about $403 million, an 11 percent premium on yesterday's closing price, Reuters says.

The new combined company will be called Live Nation Entertainment. 

Other Wachtell partners on the deal included: Adam Shapiro (executive compensation and benefits) and T. Elko Strange (tax).

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