The Competition
Commission (CC) has decided to clear the proposed merger of
Ticketmaster and Live Nation in the UK.
Both Ticketmaster and Live Nation operate in the live music and
entertainment industry in the UK. Ticketmaster is a ticketing
agent, whilst Live Nation is a live music promoter and venue
operator. Both Ticketmaster and Live Nation are headquartered in
the USA, and the merger is also being investigated by the US
competition authorities.
In its final report, published today, the CC has concluded
that the merger will 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.
Prior to the proposed merger, Live Nation signed an agreement
with Ticketmaster’s largest global competitor, CTS Eventim
(Eventim), headquartered in Germany, consequent to which Eventim
is planning to enter the UK for the first time. Under the
agreement, Eventim will provide Live Nation with ticketing
software and services, enabling Live Nation to sell its own
tickets. Eventim will also be allocated a proportion of Live
Nation’s tickets to sell to consumers.
The CC has found that the merger will make little difference
to the prospects of Eventim’s success in the UK. Although Live
Nation’s incentives will change as a result of the merger, the
merged entity will have little scope to affect Eventim as, under
the 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.
In clearing the merger, the CC’s conclusion has changed from
its provisional decision, published for consultation in October,
in which it expressed concern that the merger could inhibit the
entry of Eventim into the UK. In response to this consultation,
the CC received significant new evidence and arguments. When
considered alongside the existing evidence, the CC found, among
other things, that prior to the announcement of the merger Live
Nation had never intended to support Eventim’s entry into the UK
beyond its obligations under the agreement, which would remain
unchanged by the merger.
The CC has also concluded that, where 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 and Chairman of the Inquiry Group,
Christopher Clarke said:
"Our analysis has focused on the effects of the
merger between Ticketmaster and Live Nation on the ability of
their competitors and potential competitors to compete as live
music ticket retailers, promoters and venue operators in the UK.
"We have found that Live Nation would not have
provided Eventim with any additional support to establish its
position in the UK beyond the obligations specified in the
agreement between them. The agreement itself was entered into well
before the announcement of the merger and is binding on Live
Nation and Eventim whether or not the merger goes ahead. Rather,
we found that Live Nation always saw its agreement with Eventim as
a way for Live Nation to become the principal retailer of its own
tickets, through the use of Eventim’s managed ticketing services.
Given that the agreement will remain in place, we have concluded
that the merger is unlikely to make any significant difference to
the fees Eventim receives from Live Nation or to the number of
tickets Eventim is likely to be allocated by Live Nation.
"We concluded that the extent of Eventim’s success
in the UK will be determined principally by its own efforts and
abilities, and will not be affected significantly by the merger.
"We also looked at how the combination of
Ticketmaster and Live Nation might affect other ticketing agents,
and the promoters and venues which put on and host live music
events. We examined how the merged entity might attempt to shut
out competitors, for example by Live Nation restricting the
availability of tickets for its events to other ticket agents or
by Ticketmaster refusing to sell tickets for other promoters and
venue operators. However, we found that, in most of these cases,
the merged entity would suffer significant and immediate losses,
with very uncertain prospects for long-term gain. Therefore, we
concluded that it was unlikely that the merged entity would harm
other ticketing agencies, promoters and venues in these ways.
"Our decision today differs from our provisional
findings in October, which is unusual but not unique. The very
purpose of publishing our provisional conclusions is to provide
all parties with the opportunity to review them and to put forward
new evidence or arguments. In this case, when we considered the
totality of the evidence, arguments and analysis, we reached the
conclusion that the merger will 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 final report is available on the CC website at: www.competition-commission.org.uk.
Notes to Editors
1. The CC is an independent public body, which carries out
investigations into mergers, markets and the regulated industries.
2. The Enterprise Act 2002 empowers the Office of Fair
Trading to refer to the CC completed or proposed mergers for
investigation and report which create or enhance a 25 per cent
share of supply in the UK (or a substantial part thereof) or where
the UK turnover associated with the enterprise being acquired is
over £70 million.
3. The members of the Ticketmaster/Live Nation Inquiry Group
are: Christopher Clarke (Chairman), John Longworth, Jeremy Peat
and Richard Taylor.
4. The CC has a 24-week period in which it is required to
publish its report, which may be extended by no more than eight
weeks if it considers that there are special reasons why the
report cannot be published within that period. In this case the CC
found it necessary to extend the inquiry period by eight weeks,
giving a revised deadline of 19 January 2010 for the publication
of our report.
5. Further information on this inquiry, including the terms
of reference and other key documents, as well as on the CC and its
procedures, including its policy on the provision of information
and the disclosure of evidence, can be obtained from the CC
website at: www.competition-commission.org.uk.
6. Enquiries should be directed to Rory Taylor on 020 7271
0242 (email rory.taylor@
cc.gsi.gov.uk).
Contacts:
Rory Taylor
Phone: 0207 271 0242
Rory.Taylor@cc.gsi.gov.uk