Competition Commission clears AEG Wembley Arena deal

October 2013

Live events sector


The Competition Commission (CC) has formally cleared the completed acquisition by AEG Facilities UK (AEG) of the contract to manage Wembley Arena. In its final decision,  the CC has concluded that the merger would not result in a substantial lessening of competition in the markets for the provision of venue space to promoters, provision of sponsorship opportunities or the provision of other event-related services such as catering, confirming the Commission’s preliminary ruling, published in July.

Wembley Arena was previously operated by Live Nation Entertainment. AEG is the current operator of three indoor live entertainment venues in London: The O2 Arena, the Hammersmith Apollo, and IndigO2, and has been recently awarded a five-year contract to deliver summer concerts at Hyde Park. Following the merger, AEG will operate the two largest London indoor venues: The O2 Arena and Wembley Arena. AEG is also a promoter, AEG Live (UK) Limited, and owns a ticketing service,

Martin Cave, CC Deputy Chairman and Chairman of the AEG/Wembley Inquiry Group, commented: ‘AEG’s opportunity to increase venue hire prices would be limited because factors such as capacity, availability, brand, reputation and personal preference are more important to acts booking the venue. Negotiation on the venue hire price takes place after the venue booking has been confirmed. We also considered whether AEG would have an incentive to reduce the quality of the venue after the merger and found that doing so could damage AEG both in financial terms and also in relation to its reputation at its other venues.’

The CC also stated that, while the merged entity might have the ability to use its position as a promoter, ticket and venue operator to harm its competitors in different parts of the supply chain, either by reducing the supply of its services to its competitors 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.

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