U.K. OKs Ticketmaster, Live Nation merger
Firms 'optimistic' about similar ruling in U.S., CanadaLONDON -- Ticketmaster and Live Nation have welcomed the Competition Commission's (CC) decision to clear the proposed merger of the companies in the U.K.
The CC concluded Tuesday that the merger will not result in a substantial lessening of competition in the market for live music ticket retailing in the U.K., nor will it affect competition in live music promotion and live music venues.
A joint statement from Ticketmaster and Live Nation welcomed the ruling and said they were "optimistic there will be a successful outcome" in the U.S. and Canada. Authorities in Norway and Turkey have also approved the deal.
The CC said it had been in touch with other anti-trust authorities where the proposed merger is being investigated, but the U.K. ruling does not have a direct impact on other investigations.
"Today's clearance is an important milestone in the regulatory review process, and brings the companies a step closer to creating a new kind of live entertainment business," said Chris Edmonds, managing director of Ticketmaster U.K., in a statement.
Paul Latham, COO and head of U.K. operations for Live Nation, added: "During the course of this merger process, we have listened to our fans, artists and other parties. And we have reassured them that by combining the resources of these two companies, we will deliver a better live music experience for the entire sector."
The U.K. decision is a reversal of the provisional CC ruling in October 2009, which found that the merger could inhibit the entry into the U.K. of German ticketing company CTS Eventim, which had signed an agreement with Live Nation before the merger proposal.
There were concerns this arrangement would be affected by the merger, but the CC has found that the merger will make little difference to the prospects of Eventim's success in the U.K. In a statement, the CC said that 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." The CC said the deal was binding regardless of what happened with 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," said a CC statement. "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."
"We have found that Live Nation would not have provided Eventim with any additional support to establish its position in the U.K. beyond the obligations specified in the agreement between them," added Christopher Clarke, CC deputy chairman and chairman of the inquiry group, in a statement. "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."
Clarke said that Eventim's U.K. success will be "determined principally by its own efforts and abilities, and will not be affected significantly by the merger."
He said the CC found that any effort by the merged entity to restrict tickets to other ticket agents or refusing to sell tickets for other promoters would result in "significant and immediate losses, with very uncertain prospects for long-term gain."
"Our decision today differs from our provisional findings in October, which is unusual but not unique," said Clarke. "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."
Secondary ticketing service Seatwave has questioned the ruling today. "We continue to believe this merger will lead to higher ticket prices for fans although the Competition Commission disagrees with our position - and their own initial ruling," said founder and CEO Joe Cohen. "The onus is now on Ticketmaster and Live Nation to demonstrate tangible, financial, consumer benefit, and we certainly hope they do. The Competition Commission have given them an early Christmas present and now we'll wait to see if the U.S. Department of Justice choose to stand up for fans or give them a lump of coal."
The CC's decision could be appealed, but such appeals usually come from the main parties, who in this case are satisfied with the outcome. Any third party would have to prove they were sufficiently affected by the decision.
The Office of Fair Trading referred the proposed merger to the Competition Commission in June 2009. The Commission is an independent public body, which investigates mergers, markets and the regulated industries.