Universal Music uses star power for merger hearing
* US Senate panel to examine Universal-EMI merger deal
* Deal would make industry leader Universal even bigger
* Live Nation chief says record label power has diminished
* Mary J. Blige backs proposed Universal deal with EMI
* Critics fear higher music prices for consumers
WASHINGTON, June 21 (Reuters) - Universal Music Group is trotting out a roster of big-name allies as it makes its case on Thursday before U.S. lawmakers for its much-criticized deal to buy a chunk of rival EMI.
Irving Azoff, the head of Live Nation Entertainment, which faced its own regulatory rough ride in its controversial merger with Ticketmaster in 2010, plans to tell a congressional hearing that increased competition in digital music will make the mega-music merger less concerning.
"With services like iTunes, CD Baby, Top Spin, Reverb Nation, Pro Tools, Facebook, Spotify - you name it - artists can do everything themselves very professionally," he said in written testimony prepared for the Senate Judiciary Committee's antitrust subcommittee.
Universal, owned by Paris-based Vivendi, is also using its in-house star power to woo lawmakers.
In advance of the hearing, singer Mary J. Blige wrote a letter to subcommittee Chairman Herb Kohl to urge support for the transaction, saying "they will lead EMI brilliantly and empower EMI artists."
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 in its catalog, said in November that it would buy EMI's recorded music catalog from Citigroup for $1.9 billion.
Critics have argued the merger would create a music behemoth capable of controlling the future of digital media by withholding content from digital music startups.
But regulators must also weigh the counterargument - that the major recording companies are weakened giants worn down by the forces of big retailers and piracy that put downward pressure on the price of CDs and digital downloads.
Azoff, who led Ticketmaster since 2008 and is now executive chairman of Live Nation, pushed that argument in his testimony. He also said EMI's extended and very public financial difficulties had made it difficult for the company to sign new acts.
Universal Music Group Chairman and Chief Executive Lucian Grainge pledged that his company would support EMI as a "distinct business."
He reiterated in his written testimony that piracy had curtailed sales, cutting revenues for the recording industry from about $13 billion in 2002 to $6.5 billion last year.
Grainge argued that concern that Universal would hamstring digital startups by demanding high fees was misplaced, noting that the company has 123 active U.S. digital music deals.
Universal is the biggest music company at 30 percent of the U.S. market, Sony is second at about 29 percent, Warner third at 19 percent and EMI at 10 percent, according to 2011 data from Nielsen SoundScan.
Other witnesses expected at the hearing are EMI Group Chief Executive Officer Roger Faxon and deal critics Warner Director Edgar Bronfman, Jr., Beggars Group Chairman Martin Mills and Gigi Sohn, president of the public advocacy group Public Knowledge.
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