Live events, ticketing
In provisional findings, the UK’s Competition Commission (CC) has ruled against the proposed merger between Live Nation and Ticketmaster Entertainment, predominantly because it would hinder German ticketing company CTS Eventim’s entry into the UK market. The opposition is the first against a US merger since the CC was given the power to oppose mergers in 2003.
The merger, which was announced in February and would create one of the world’s largest entertainment companies with annual sales of about $6 billion and interests in concerts and tours, venues, ticketing, artist services and merchandise, is also the focus of investigation in the US. Live Nation also has a number of so called 360 degree deals with artists including U2, Madonna, Shakira, Jay-Z and Nickleback. Since it’s 2008 merger with Irving Azoff’s Frontline Management which saw Azoff installed as CEO at TM, the combined TM portfolio now includes the management of the Eagles, Christina Aguilera, Jimmy Buffet and Neil Diamond amongst another two hundred acts and alongside the world’s biggest ticketing operation. In a separate move TM also recently acquired a majority stake in Nashville based DS management whose roster includes Alison Krauss and Union Station amongst others
CC deputy chairman Christopher Clarke says: “The merger with Ticketmaster means that Live Nation will have every incentive to inhibit a significant potential rival from entering the UK market and, given the significance to CTS of its agreement with Live Nation in deciding to enter the UK market, we believe that Live Nation would be able to do so. We believe that, if the merger proceeds, Live Nation will seek to limit its relationship with CTS, with the effect of putting CTS’s future prospects in the UK in considerable doubt.” In order for the ruling to be reversed, the CC has listed several possible remedies which include the divestments of Live Nation’s promotion and venue division, Ticketmaster’s ticketing operation and Live Nation moving a majority or all of its tickets through a third party ticketing company. Clarke added: “We also looked at how the combination of Live Nation, as a promoter and venue operator, with Ticketmaster might adversely affect ticketing agents other than CTS, promoters and venue owners. However, we concluded that it was unlikely that the merged company would have both the ability and incentive to harm them significantly, either by Live Nation restricting the availability of its tickets to other agents or by Ticketmaster refusing to sell tickets for other promoters and venues.
A joint statement issued by Live Nation and Ticketmaster said that it respected the CC’s analysis of the merger and would continue to cooperate fully, but that, “we must be clear about the challenges of the music industry, which is at a decisive crossroad. The recording industry is a shell of its former self. Where the recording industry was once the economic engine for the music business, it is live entertainment that is now the future of the music industry.” The statement went on to add, “We firmly believe that our merger achieves an important and much needed public interest, and remain optimistic that it will ultimately be approved.”
In July, Senator Herb Kohl, a Wisconsin Democrat, and a bipartisan group of House members asked the U.S. Justice Department to determine whether the combination would lead to higher concert prices or harm competition in the music industry. The companies have testified before the U.S. Congress that the combination will benefit fans by giving them more choices in seating and price flexibility. At a U.S. senate antitrust subcommittee hearing on Febuary 24th TM Boss Irvng Azoff said “The fierce competition we face in our businesses will continue to thrive,” and that the combined company will benefit fans.
The CC will now consider responses from all interested parties before publishing its final report by 24 November.
Greg Parmely writing at www.ilmc.com