Live events sector
The Office of Fair Trading is to formally investigate plans to award AEG the management contract at the Wembley Arena, particularly in light of its continued management of the O2 Arena, and competition issues raised by its recent award to stage concerts in London’s Hyde Park and its purchase of the Hammersmith Apollo in the capital. A deal to manage Wembley Areana would put the company in control of London’s two main arena venues, as well as the Apollo, often the ‘stepping stone venue’ for bands and comedians looking to move from theatres to arenas.
The OFT investigation will look at whether the proposed Wembley deal will lead to a “substantial lessening of competition” within London’s live music market. If the OFT decides there are legitimate concerns, it could refer the AEG/Wembley deal to the Competition Commission. AEG’s main rival Live Nation’s growth in London caused concerns at the OFT back in 2007 when it acquired a slice of the Academy Music Group, the Competition Commission decided that the proposed acquisition of a controlling interest in Academy Music Holdings Limited (Academy) by Hamsard 2786 Limited (Hamsard) would lead to a substantial lessening of competition in relation to certain live music venues in London, resulting, in particular, in rentals at the venues concerned being higher than would otherwise be the case and forced the live music firm to sell the Hammersmith Apollo and London Forum (both to MAMA) in order to get approval for their AMG deal so that Live Nation could still retain ownership of the Shepherds Bush Empire and the Brixton Academy. Live Nation’s indirect ownership of the Astoria was discounted, as that venue then faced closure because of rail developments.
Commenting on the new concerns about AEG’s dominance in London, one live industry source told The Guardian: “If AEG have control of the management of the two biggest venues there is of course the issue that they could look to impose ticket price increases, and exert more control over the artists and types of events”.
See The Competition Commission’s final report into the London venue market is published http://www.musiclawupdates.com/?p=2613 and see Will MAMA sale herald a new competition query? http://www.musiclawupdates.com/?p=4774