Watchdog opposes Ticketmaster and Live Nation firms merger
Oct 8 2009 By Huddersfield Examiner
COMPETITION authorities today provisionally ruled against the controversial mega-merger of ticketing giant Ticketmaster with the world’s largest concert promoter Live Nation.
The Competition Commission said the tie-up could lead to higher prices and lower quality of service as it would encourage Live Nation to "inhibit a "significant potential rival" from entering the UK market.
Ticketmaster and Live Nation - whose acts include Madonna, Coldplay and U2 - announced the planned merger in February, sparking a competition inquiry in the US.
In the UK, the competition watchdog said it believed a deal would stop the world’s second largest ticketing firm, CTS Eventim, from gaining a foothold.Live Nation signed an agreement with CTS for ticketing of its live music shows and venues in the UK shortly before the merger with Ticketmaster was announced.
The Competition Commission said the deal would have given CTS a way into the UK market.
Christopher Clarke, the watchdog’s deputy chairman, said: "The merger with Ticketmaster means that Live Nation will have every incentive to inhibit a significant potential rival from entering the UK market and, given the significance to CTS of its agreement with Live Nation in deciding to enter the UK market, we believe that Live Nation would be able to do so.
"We believe that, if the merger proceeds, Live Nation will seek to limit its relationship with CTS, with the effect of putting CTS’s future prospects in the UK in considerable doubt."
The potential deal is thought to have attracted the anger of some major artists, including Bruce Springsteen, over fears of a near-monopoly on global live music ticketing.
In today’s findings the regulator said it was unlikely the combined company would have both the ability and incentive to harm ticketing agents other than CTS, or other promoters.
Both Ticketmaster and Live Nation are based in the US, so the Competition Commission could not act to stop the merger.
But the watchdog is considering moves such as forcing the firms to sell off one of their UK businesses or measures to ensure CTS or another third party retailer can act as an agent for many of Live Nation’s tickets.
The Competition Commission will publish its final ruling on November 24.
It said it is working closely with its counterpart in the US and it is possible the American authorities could decide to stop the tie-up.
Live Nation and Ticketmaster released a joint statement in which they pledged their continued co-operation with competition authorities, but insisted they were committed to the merger.
The firms said the music industry was at a "decisive crossroad", with the recording sector "a shell of its former self".
"Where the recording industry was once the economic engine for the music business, it is live entertainment that is now the future of the music industry," the statement read.
"We believe this merger will build a more efficient and effective company moving forward, and that working together we will be able to help achieve needed change that will strengthen a flagging music industry."
The pair said they had listened to varying views on the challenges facing the industry from fans, artist and others.
They added: "We firmly believe that our merger achieves an important and much needed public interest, and remain optimistic that it will ultimately be approved."