Nov. 2 (Bloomberg) -- Anschutz Entertainment Group, owner of Staples Center in Los Angeles and London’s O2 arena, is exploring ticket partners to replace Ticketmaster Entertainment Inc., which is merging with competing promoter Live Nation Inc.

AEG is reviewing systems by Cleveland-based Veritix Inc., Major League Baseball’s Tickets.com and others, according to two people with knowledge of the discussions. The company also may build its own for $30 million or more, one of the people said.

Before proceeding, AEG is waiting to see whether the U.S. Justice Department approves the Ticketmaster-Live Nation merger, said the people, who sought anonymity because deliberations are private. The organizer of Michael Jackson’s comeback tour, AEG is Ticketmaster’s largest music client. Its plans may alter the ticketing landscape and affect regulators’ view of the deal.

“They have the ability to instantly become a viable competitor,” said Gary Bongiovanni, editor-in-chief of Pollstar, an industry publication.

A spokesman for West Hollywood, California-based Ticketmaster and Live Nation, based in Beverly Hills, California, declined to comment, as did Michael Roth, a spokesman for Los Angeles-based AEG. Chaeli Walker, with Costa Mesa, California-based Tickets.com, didn’t respond to requests for comment.

The maneuvering shows that Ticketmaster’s effort to create a new music-industry model, combining ticketing with promotions, venues and artist management, is roiling clients. Concert organizers in San Francisco, Chicago and Washington have criticized the tie-up.

Escape Clause

The Ticketmaster-Live Nation deal would combine the world’s largest ticketing and artist-management company with the biggest concert promoter and venue operator. Ticketmaster investors are to receive 1.384 shares of Live Nation for each they now own. The two companies have a combined market value of $1.1 billion.

AEG, owned by billionaire Philip Anschutz, 69, owns or operates almost 100 locations, and has sports holdings including the NHL’s Los Angeles Kings. The company accounts for less than 10 percent of Ticketmaster’s sales, according to a Feb. 26 regulatory filing.

AEG has organized tours for Paul McCartney, Bon Jovi, Prince and Justin Timberlake, and sold 5.5 million concert tickets worldwide this year through June 30, according to Pollstar. Live Nation sold 12.9 million.

AEG’s Ticketmaster contract expires in July 2012, one person said. The company can get out sooner if the Live Nation deal is completed, AEG Chief Executive Officer Tim Leiweke said in a letter to Ticketmaster CEO Irving Azoff this year. AEG also may decide to stay with Ticketmaster, the person said.

‘Potential Entrant’

How a rival company may respond to a merger is important to U.S. regulators reviewing the Ticketmaster-Live Nation deal, said Andre Barlow, an antitrust attorney for Doyle Barlow & Mazard in Washington.

“The government talks to any potential entrant regarding their future plans,” said Barlow. “What DOJ would want to know is how difficult would it be for AEG to create a ticketing service.”

The decision to look for alternatives came after Ticketmaster and Live Nation announced in February that they planned to merge, according to two people with knowledge of the situation. Earlier, AEG and Ticketmaster negotiated their own tie-up, including an exchange of equity stakes, those people said. AEG’s talks with Ticketmaster followed Live Nation’s decision, announced in December 2007, to start a ticketing system, one person said.

According to a Ticketmaster filing, the company held discussions on a joint venture transaction with an unnamed live- entertainment company before deciding to pursue a transaction with Live Nation.

Client Data

Justice officials are giving Live Nation and Ticketmaster time to propose solutions to resolve the antitrust division’s concerns, according to a person familiar with the matter. A decision hinges on those proposals, said the person, who declined to be named because the discussions are private.

A Live Nation-Ticketmaster combination would mean AEG’s biggest rival may have access to closely guarded sales information used to formulate bids to win touring business.

“Coca-Cola or Pepsi wouldn’t want the other to be their distributor,” said Jerry Mickelson, chairman of Jam Productions Ltd., an independent promoter in Chicago. “You can’t do that. It’s just not part of what competitors would ever go for.”

Mickelson’s contract with Ticketmaster expires in 2011. He hasn’t decided whether to hire another service because Ticketmaster is superior.

“I haven’t seen any other ticket company that has the technological capabilities,” Mickelson said in an interview.

Ticketmaster rose 5 cents to $9.70 4 p.m. New York time in Nasdaq Stock Market trading. Live Nation gained 2 cents to $6.68 in New York Stock Exchange composite trading.

Ticket Options

The Justice review of Ticketmaster and Live Nation focuses on whether the combined company would gain too much control over prices, according to people with knowledge of the deliberations. Of particular interest are large venues, such as arenas where Ticketmaster has exclusive contracts, one person said.

The U.K. competition committee provisionally ruled against the deal in October, saying it would “severely inhibit” a new ticketing competitor in the U.K. market.

Veritix is owned by Dan Gilbert, chairman of mortgage lender Quicken Loans and owner of the Cleveland Cavaliers basketball team. His system is used at Quicken Loans Arena where the Cavaliers play, as well as arenas in Denver, Salt Lake City and Houston, its Web site says.

Tickets.com, bought by Major League Baseball in 2005, operates a Web-based service that’s used by 16 teams, including the New York Mets, Boston Red Sox and San Francisco Giants, according to its Web site.

Before announcing its Ticketmaster deal, Live Nation introduced a competing ticketing system with CTS Eventim AG, the leader in Europe. If Live Nation walks away from that deal as a result of the merger, AEG could partner with CTS, Barlow said.

“Everybody is waiting to see whether the merger actually happens,” Bongiovanni said.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

Last Updated: November 2, 2009 16:09 EST