Live Nation Entertainment owner Liberty Media got approval from the Department of Justice to dramatically increase its stake in iHeartMedia, over the objection of anti-monopoly advocates. Liberty, which already controls Sirius XM and Pandora in addition to its 33 percent stake in Live Nation and Ticketmaster, got approval to increase its shares in iHeartMedia – owner of over 850 AM and FM radio stations across the country – to 50% – 10 times its current 5% ownership stake.
The increased stake was opposed by at least six public advocacy groups – including Open Markets, Public Citizen, and the Center for Digital Democracy, who argued that the deal would be “likely catastrophic” on radio markets due to the enormous concentration of media in the hands of one company.
Traditionally, the Justice Department’s antitrust review of radio deals has focused on how the mergers will impact advertising. But a merger involving Sirius XM, Pandora and iHeart could likely raise concerns about programming, said David Kully, a partner at law firm Holland & Knight. “It seems plausible that Sirius XM and some large iHeart stations are competing for listeners and that’s something the antitrust enforcers aren’t going to be able to ignore,” said Kully, who until 2016 led the DOJ’s antitrust unit that examines radio deals.
Live Nation is itself no stranger to anti-monopoly criticism, including by the same Department of Justice anti-trust group that just greenlit its parent company’s move on iHeartMedia. After an investigation, the concert promoter agreed to an extension of a consent decree and appointment of a monitoring trustee due to allegations the company abused its market power with threats to withhold tour stops from venue operators who chose competing ticketing providers. Many argue the steps taken don’t go nearly far enough in reigning in the overwhelming market power held by the company relative to any competition in North America.
And the new acquisition by its parent company may be even more troubling. “This deal is on an even larger scale than the Ticketmaster and Live Nation deal,” according to music business attorney Steven Madoff.
Representatives for Liberty Media and the Justice Department have not responded to multiple outlets requests for comment as of Friday morning, and the timeline for the intended purchase of the increased stake is unclear.
