Live events industry
The UK’s Competition Commission (CC) has cleared the Live Nation/Ticketmaster merger, removing the last obstacle in the creation of the world’s largest live entertainment company. After reversing its initial approval in December, the Commission’s findings follow a fresh round of submissions, after which it concluded that “the merger would not result in a substantial lessening of competition in the market for live music ticket retailing or in any other market in the UK, including live music promotion and live music venues.”
The merger of Ticketmaster and Live Nation was completed (subject to conditions) in the USA on 25 January, following approval from the Department of Justice. In the UK, a key sticking point in the CC’s original decision was the effect it would have on Germa ticketer CTS Eventim, which is contracted to provide ticketing services to Live Nation as part of a ten-year international deal. Eventim challenged the first approval of the deal, arguing that the merger would hinder their entry into the UK market.
In summary, however, the CC said: “The CC has found that the merger will make little difference to the prospects of Eventim’s success in the UK. On the basis of its agreement with Live Nation alone, Eventim will be a small-scale retailer of live music tickets in the UK and its prospects of becoming a large-scale retailer and competing effectively with the large incumbent ticket retailers will not be affected significantly by the merger.”
“Under their agreement, Eventim will continue to receive a fee for every Live Nation ticket sold and Live Nation will continue to be obliged to allocate a minimum number of tickets to Eventim. Both parties have stressed their commitment to honouring their obligations under their agreement.”
The CC also reiterated that, while the merged entity might have the ability to use its position as a ticket retailer, promoter and venue operator to harm its competitors in different parts of the supply chain, either by reducing the supply of its services or by supplying its services on worse terms, it would not have the financial incentive to do so. Specifically, the CC has found that, if the merged entity tried to harm its competitors in these ways, it would suffer significant short-term losses in pursuit of very uncertain long-term gains.
CC deputy chairman Christopher Clarke says: “We did not believe that, in the absence of the merger, Live Nation would have allocated significantly more of its tickets to Eventim or sponsored or supported Eventim’s entry into the UK as a ticket retailer in any other way.
“If Eventim is to establish itself in the UK market as a large-scale ticket retailer, in keeping with its presence in other countries, this will depend on its own efforts and abilities in attracting consumers and obtaining tickets from other promoters and venue operators, and will not be affected significantly by the merger.”
Relations between Live Nation and Eventim have continued to sour of late, and the ticket specialist recently filed for arbitration with the International Court for Arbitration, claiming that Live nation has breached the terms of its contract.