Live events sector
The UK’s Competition & Markets Authority has approved Live Nation’s acquisition of the Isle of Wight Festival, concluding that the live giant’s latest expansion of its festival portfolio does not raise any competition issues. The deal was concluded through the LNE-Gaiety joint venture between Denis Desmond’s Gaiety and Live Nation. Desmond is also non-executive Chairman of LNE.
Prior to the decision, the UK’s festival trade association, the Association of Independent Festivals (AIF) had written to the Competition and Markets Authority (CMA) urging the CMA to widen its investigation into the acquisition of Isle of Wight Festival to include an inquiry into global promoter’s “position in the [UK] market overall”. AIF published a report that showed that Live Nation either owns or holds a majority stake in nearly a quarter (23%) of all UK events with a capacity of over 5,000. In total, Live Nation controls 28 UK festivals, including eight of Britain’s largest outdoor events (Download, V Festival, Reading/Leeds, Parklife, Creamfields, Lovebox and Wilderness) but whilst this excludes Glastonbury, it is almost three times more than its nearest competitor, Global, which AIF says has a 8% marketshare. Rival AEG promotes the 65,000 capacity British Summer Time. Live Nation has divisions operating in tour and festival promotion, venue management, primary and secondary ticketing, and artist management and continues to be acquisitive, not least in the UK where it has bought into a number of touring, festival and venue companies in recent years.
AIF’s general manager, Paul Reed, said: “For the sake of its future health and diversity, it is vital that the UK’s live music sector remains open and competitive.” and that AIF had significant concern over “Live Nation’s “deep-rooted influence across the live music sector, from venue and festival ownership” highlighting exclusivity deals with artistes as a major issue.
In a statement the CMA said: “The evidence collected indicates that the Isle Of Wight Festival and Live Nation’s existing festivals were not competing particularly closely for customers. After the merger, people will continue to be able to choose between festivals owned by Live Nation and a variety of competing festivals. The fact that festival-goers also choose between going to a festival and other activities will also ensure that Live Nation continues to face sufficient competition”.
CMA did address AIF’s concern over booking talent, saying: “Following concerns raised by third parties, the CMA also investigated whether the merger would enable Live Nation to stop rival organisers of live music events – both festivals and concerts – from being able to book the range and quality of artists that they need to provide a competitive proposition” concluding: “The evidence indicates that the merger will not materially strengthen Live Nation’s position in booking artists, and that a sufficient range and quality of artists will continue to be available for rival organisers of live music events”.
Responding to the CMA ruling, AIF’s Paul Reed said: “Firstly, I want to make it clear that we didn’t start the fire – AIF decided to conduct some research looking into festival market share once the investigation was in motion. We were surprised by the results, with a single transnational entity headed rapidly towards ownership of 25% of festivals in the UK over 5,000 capacity” adding “It is disappointing that the CMA has not take the opportunity to broaden the scope of the investigation into Live Nation’s overall position. That said, I think the research AIF published shines a light on the current and future structure of the live music market and the genuine concerns from grassroots independent festival organisers around consolidation and Live Nation’s vertical integration, with tentacles across all aspects of the business” adding “The question is, how many festivals do Live Nation need to acquire before the CMA take this seriously and give the issues the proper scrutiny they deserve?”
Audience Magazine, Issue 212, September 2017.