Six “artist and consumer rights groups,” citing “reports” made by some media organizations, believe the U.S. Department of Justice “could act any time” on the potential acquisition of iHeartMedia by John Malone’s Liberty Media.
As such, these groups, which include the Artist Rights Alliance, have written to both Assistant Attorney General Makan Delrahim and the respective House and Senate Judiciary Committees, in opposition of such a deal.
There’s one big reason why they want approval of the supposed deal nixed.
The “reports” the six groups cite is a Dec. 29, 2019 New York Post article that claims DOJ “is mulling whether to meddle with” what the tabloid calls a “Sirius-iHeartRadio merger.”
The story was a follow up to news first shared by RBR+TVBR in February 2018. At the time, Liberty Media revealed a plan that would see it and subsidiary Sirius XM take a combined 40% minority stake in iHeartMedia.
There’s just one thing essentially important with respect to that offer: it was part of a Chapter 11 reorganization offer presented to key iHeart lenders and noteholders, prior to iHeartMedia’s successful emergence from bankruptcy protection.
Still, an iHeart deal with Malone could still be in the cards for iHeart, which still has billions of dollars in debt — albeit several billion dollars less than in it prior to its Chapter 11 reorganization.
That’s why the American Economic Liberties Project, the Institute for Local Self-Reliance, Open Markets, Public Citizen, the Center for Digital Democracy and the aforementioned Artist Rights Alliance are urging Delrahim “to reject this massively overreaching effort to monopolize music radio in this country.”
It takes aim at Liberty’s controlling stake in Sirius XM, which attracts some 10% of all audio consumers in the U.S., and Pandora, the once-dominant audio streaming service that the groups claim has 70 million monthly active users.
Also at issue: Liberty’s 33% stake in Live Nation/Ticketmaster, which the groups claim also gives Liberty “substantial influence in the live performance and ticketing sector.”
“In sum, with its current holdings, Liberty already has amassed monopoly control of the satellite radio market, substantial control over the concert/live performance market, and ownership of one of the top three music streaming companies,” the groups note.
The combination of Sirius Satellite Radio with XM Satellite Radio ultimately saved the entire pay-for-radio business model, with the two companies fiscally unable to compete side-by-side.
Should iHeart be taken by Malone’s Liberty, “The potential impact on radio markets is evident and likely catastrophic, removing competitive discipline across multiple market segments,” the groups claim.
It points out that iHeart is the single-largest licensee of radio stations in the U.S.
The groups also offer the following claim: “Up and coming talent will face an even greater challenges cracking through shrinking nationalized playlists. This challenge will be more daunting if a new Liberty music conglomerate gives preferential airplay and venue access/promotion to its own signed artists. Such preferential treatment would disfavor everyone else and squeeze more diverse voices off digital, AM/FM, and satellite distribution … This unacceptable new proposal will put a broad array of music creators at a massive disadvantage in an arena that is already massively stacked against them.”
