Universal Music uses star power for merger hearing

Thu Jun 21, 2012 5:49pm EDT
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By Diane Bartz

WASHINGTON (Reuters) - Universal Music Group brought out big-name allies as it made its case on Thursday before U.S. lawmakers for its much-criticized deal to buy a chunk of rival EMI.

Irving Azoff, the executive chairman of Live Nation Entertainment, which faced its own regulatory rough ride in its controversial merger with Ticketmaster in 2010, told a congressional hearing that increased competition in digital music will make the mega-music merger less worrisome.

"With services like iTunes, CD Baby, Top Spin, Reverb Nation, Pro Tools, Facebook, Spotify - you name it - artists can do everything themselves on their own very professionally," he told the Senate Judiciary Committee's antitrust subcommittee.

Live Nation and Universal have a partnership to promote musicians and ticket sales.

Universal, owned by Paris-based Vivendi SA, also used its in-house star power to woo lawmakers, getting multiple artists including Mary J. Blige and Peter Frampton to write letters urging support for the transaction.

Lawmakers do not have any formal bearing on the Federal Trade Commission's review of the deal, but they do have the ability to shape public opinion.

Universal, with stars like U2 and Rihanna on its roster, said in November that it would buy EMI's recorded music catalog from Citigroup for $1.9 billion. Sony Corp is buying the other portion, EMI Music Publishing.

The companies have argued that they are weakened giants worn down by the forces of big retailers and piracy which have pressured the price of CDs and digital downloads. Industry revenue fell from about $13 billion in 2002 to $6.5 billion last year.   Continued...

A man enters EMI offices in west London August 18, 2010. REUTERS/Toby Melville