The proposed merger between ticketing and live music giants Ticketmaster and Live Nation could hinge on how far the two are willing to concede in order to gain Department of Justice (DOJ) acceptance, according to a report in the The Wall Street Journal.

Those concessions could include the selling off of Ticketmaster Entertainment CEO Irving Azoff’s baby, the artist management colossus Front Line Management, which sources told the Journal could be a deal breaker.

But one thing seems almost certain, to court the favor of the DOJ, the two companies may have to give in until it hurts to avoid more delays and a DOJ lawsuit to block the deal. This became even more true following the preliminary findings of the UK Competition Commission, which last week came out against the proposed merger.

Representatives from both companies are said to be mulling over potential scenarios of what assets to sell off, close or change, but they are apparently receiving little or no guidance from DOJ officials on what to do, according to the Journal. Ticketmaster and Live Nation hope to close on the deal before the end of the year, but there is no indication that that will happen, and there is reportedly an exit clause that could kill the deal if Front Line must be sold.

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Other possibilities for divestiture include Live Nation’s ticketing operation, which the company launched early this year, or some of the more than 125 venues or amphitheaters Live Nation owns or operates. On the Ticketmaster side, it may have to part with its TicketsNow secondary ticketing subsidiary, which Azoff has already said he would consider selling.

What continues to be an issue for the two companies is the fact that they will have a lock on virtually all aspects of ticketing and concerts from the artists to the fans, and as such could set ticket prices at whatever levels they want and potentially force artists to only deal with a single entity in order to book shows.

The two companies have spent a combined eight figures as part of the due diligence on the deal, and considering they were initially expecting annual savings of close to $50 million they will likely push ahead with the $2.5 billion merger until the bitter end.

When reached today, neither Ticketmaster nor Live Nation would comment on the report or the status of the merger.

“Today’s report in the Wall Street Journal gives us a hint that perhaps the anti-trust officials at the U.S. Department of Justice have been as concerned about the Ticketmaster-Live Nation merger as me and my numerous congressional colleagues,” U.S. Rep. Bill Pascrell, Jr. said in a statement. Pascrell has been a vocal critic of the planned merger, and has introduced legislation to regulate the ticketing industry.

“To date, the Justice Department has not taken any official action, and I continue to call upon them to block this deal that will only result in a consumer-forsaking monopoly. It’s true that changes could be made to the merger’s conditions,” Pascrell continued. “I am not concerned about accommodating the two companies with terms that will allow them to make their deal. If the Justice Department approves the deal after carving out a couple of nominal prohibitions from taking total control of the primary ticketing market, the merger will still lead to tremendous amount of control of the live entertainment industry. Since February, my focus has been on the protection of the consumer. If the merger is less monopolistic but still results in unaffordable ticket prices and no viable competition to this behemoth then we haven’t accomplished anything for the people who fill the seats at their shows and events.”

Last Updated on October 17, 2009