CTS Plans A Turkey Shoot

There’s increased speculation that CTS Eventim is on the verge of acquiring TicketTurk, the Istanbul-based ticketing agency locked in a dispute over performance fees allegedly owed to U.S. rock acts Megadeth and Garbage.

A May 18th ad hoc press notice announcing the Munich-based company had bought a 43 percent stake in Italy’s TicketOne ended by saying, "Turkey and Spain are among the next acquisition targets."

Ticketmaster snapped up Biletix, Turkey’s biggest ticketing company with a 75 percent share of the market and at least 90 percent of the contemporary live music market, for US$17 million about six months ago. TicketTurk, the country’s second biggest, could likely be the next target.

Even before the Ticketmaster-Biletix deal made headlines, the national papers’ business pages had suggested TicketTurk was being eyed by CTS and the Dogan group, the country’s leading media conglomerate, with operations in newspaper, magazine and book publishing, television and radio broadcasting, printing and new media.

CTS chief Klaus-Peter Schulenberg won’t confirm his interest in TicketTurk, but if he is to acquire a ticketing company, it’s hardly likely to be any of the others.

Determining the third- or fourth-biggest ticket supplier in Turkey is a matter of conjecture that would hardly seem worth the bother because their market shares are so small.

But an alternative strategy could be for CTS, which has a major hold on the Balkan countries to the north, to acquire or enter into an arrangement with one of the region’s major promoters.

Pozitif Productions, a major promoter with outdoors including Efes Pilsen One Love Festival and Rock ‘N’ Coke Istanbul Festival, is a major content provider, but has a long-standing relationship with Biletix.

Other possibilities could be Can Tanca’s FG radio – a popular national station that’s turned to promoting – and Purple Concerts, the Istanbul-based company Marcel Avram set up after splitting with Peter Schwenkow and DEAG.

Avram has a track record for promoting top talent internationally and has spent much of his working life based in Germany.

He’s also a former colleague of Marek Lieberberg, whose Frankfurt-based company is half-owned by CTS, although their 16-year partnership at Mama Concerts reportedly ended somewhat heatedly.

Avram certainly has the potential to provide more contemporary live music content than TicketTurk, whose main promoter in that market (Rock Istanbul) is penniless.

It’s in court with Megadeth and Garbage because it denies it’s responsible for paying their fees for Rock Istanbul 2005. The dispute hangs on whether TicketTurk managing director Gulseren Onanc’s written undertakings to settle the festival’s outstanding debts to the acts are valid under Turkish law.

Much of the bands’ evidence is based on e-mail correspondence, although that’s not considered admissible in court unless both parties agree that it can be submitted. Eckmecki & Karakus, TicketTurk’s lawyers, are showing no signs of agreeing.

"There is no agreement signed between the authorized persons of our client TicketTurk and Garbage and Megadeth groups, and there is no written declaration of guarantee which may be deemed valid pursuant to the Turkish laws," Dogan Karakus wrote to Pollstar May 22.

The next hearing in the Megadeth case is due at the Asliye Ticaret Mahkemesi (commercial court) on June 14.

Because it no longer has such strict government controls on foreign companies wanting to invest or expand, Turkey has become an easier place to do business.

However, 2007 ticket sales are down on previous years. Many promoters are blaming current political unrest, which has led to protests in the streets over the way the next president is chosen, although the same promoters admit having trouble explaining why there should be any direct correlation between politics and ticket sales.

Turkey’s a huge market and growing fast. A 2005 survey had the population at 72.6 million and expanding at 1.5 percent per annum.

It’s arguably a decade away from full membership of the European Union, but it’s expected to have an 80 million-plus population and be the biggest member state – about level with Germany – by the time it does join.

It’s also a relatively young population, with 25.5 percent falling within the 0-15 age bracket.

As for Spain, where CTS will also find Ticketmaster waiting, it’s hard to see Schulenberg looking beyond the Caixa Bank-owned Servi Ticket.

Along with Tick Tack, which the U.S.-based giant acquired a year ago, it dominates the contemporary music market and the two companies share the major promoters. Gay Mercader’s Gamerco, now part of Live Nation, is a Servi customer, while Neo Sala’s Doctor Music uses Tick Tack.

CTS has no problems funding expansion, largely because of a few years’ worth of solid returns and an Internet ticketing business that’s grown 50 percent since last year.

First quarter figures show the company’s portals shifted 1.5 million tickets between January 1 and March 31, compared with the 1 million it did 12 months ago.

The market is hardly likely to balk at the fact year-on-year revenues and earnings are down as last year’s figures were boosted by ticket sales for the 2006 World Cup soccer.

Both are down by more than one-third, with income dropping from euro 88.1 million to euro 73.5 million and pre-tax profits (EBIT) falling from euro 16.9 million to euro 10.5 million.

Although its live entertainment sector, the six-promoter Medusa Group comprising Argo Konzerte, Dirk Becker Entertainment, FKP Scorpio, Marek Lieberberg, Peter Rieger and Dieter Semmelmann’s Semmel Concerts, made 36.5 percent less than it did last year, it was still the second-best Q1 figure it had achieved since the company went public in February 2000.

Revenues were down 8.1 percent from euro 61.7 million to 56.7 million, while EBIT fell from euro 8.4 million to euro 5.4 million.