Ticketmaster and Live Nation Inc. announced on Tuesday (February 10) that they will combine forces to create one of the largest live entertainment companies on the planet, to be called Live Nation Entertainment.

The merger combines ticket provider Ticketmaster, which sells tickets for more than 80 percent of the major arenas and stadiums in the United States, with Live Nation, the world's leading concert-promotion company, into a company whose value is an estimated $2.5 billion.

The deal still has to face major hurdles that could delay it as regulators launch an antitrust review to ensure that the new company does not represent a monopoly. The merger comes after Live Nation cut ties with Ticketmaster earlier this year and attempted to launch its own rival ticketing service. Minutes after the deal was announced, New York Senator Charles Schumer, who sits on the Senate Judiciary Committee, quickly criticized it, according to the New York Times.

"This merger would give a giant, new entity unrivaled power over concertgoers and the prices they pay to see their favorite artists and bands," the senator said in an e-mailed statement. "It must be viewed skeptically and scrutinized with a fine-toothed comb by the Justice Department and the Federal Trade Commission."

Both services have endured bad publicity over the past few weeks. Ticketmaster got slammed by Bruce Springsteen's manager for allegedly redirecting fans trying to buy tickets for the singer's upcoming tour to a secondary resale site it owns called TicketsNow, where they were forced to pay premium prices for seats. Ticketmaster apologized to Springsteen and his fans, according to the Los Angeles Times. But on Monday, Bloomberg.com reported that a $500 million lawsuit had been filed in Canada against the company for allegedly selling tickets at inflated prices.

Phish fans were also outraged recently when tickets for the beloved jam band's reunion shows went on sale and, according to Billboard.com, Live Nation's new ticketing system crashed due to the high volume of requests.

[article id="1584696"]Live Nation[/article] has been preparing its ticketing system for over a year, all the while making mega-million-dollar [article id="1576838"]deals with artists[/article] including [article id="1603334"]Jay-Z[/article], [artist id="1098"]Madonna[/artist], [artist id="1022"]U2[/artist], [artist id="504144"]Shakira [/artist] and [artist id="760446"]Nickelback[/artist] for those acts' touring, merchandising and, in some cases, recording rights.

In addition to its holdings in the U.S., which encompass nearly 120 venues including 39 amphitheaters, as well as a number of major regional concert promoters, Live Nation controls businesses that print artist-related T-shirts and merchandise and run fan clubs.

The deal comes as the music industry is mired in a continuing downturn, with Nielsen Soundscan reporting that album sales slipped 14 percent in 2008, marking the fourth straight year of significant declines in CD sales.

Meanwhile, touring revenues were up slightly in 2008, and the business remains one of the most consistently profitable parts of the music industry.

In a release announcing the deal, Ticketmaster and Live Nation promised that they would attempt to give fans better access and more options for buying tickets, improve pricing schemes, invest in better ticketing technology such as paperless ticketing and mobile delivery of tickets, and increase attendance at events.

While the merger has led some to fear that the new company could unilaterally raise the average price of a concert ticket and leave fans without a second option, Ray Waddell, Billboard magazine's concert tour reporter told CNN that he doesn't expect ticket prices to "just blow up" should the merger be approved.

"Traditionally, when there's competition taken out of the marketplace, it really doesn't do a lot for lowering prices, but both these companies are very sensitive to the market and what the fans can pay," he said, adding the caveat that a combined company would control "everything before, during and after a concert takes place over the course of an entire tour, and that's pretty sizable."