Eventim’s U.K. Opportunities

While CTS Eventim had been widely reported as being potentially one of the main sufferers from the proposed LN-TM merger, the U.K. hadn’t previously appeared to be a territory the acquisition-prone German giant seriously targeted.

Now some feel the Competition Commission is rolling out a red carpet and holding the door open for it.

The Bremen-based company – with an acquisition strategy that has seen it become the No. 1 ticket-seller on the European mainland – has appeared a little more reticent when it comes to U.K. expansion.

There were at least a couple of occasions in the last two years when Eventim could have bought into the U.K. market as a major force, but either passed up on the chance or apparently didn’t bid enough.

A year ago this month, while Eventim was paying euro 5 million for a 70 percent stake in Finnish ticketing company Lippupiste Oy, Dutch investment and financial services company ING Group was buying 60 percent of Holland’s Stage Entertainment’s ticketing business.

The Dutch deal cost 50 times as much as Eventim’s Finnish acquisition, but it did include Ticket Online Germany, Poland and Austria; TopTicketLine Germany, Netherlands, France, Spain, Russia; Belgian ticketing organization sherpa.be and the U.K.’s See Tickets.

Their combined annual revenues came to about euro 320 million in 2007 – about euro 100 million less than Eventim will bring in this year – although the individually branded collection didn’t have the business profile of a company like Eventim.

Since ING came on board, the companies have started switching to the See Tickets brand.

If a slice of Stage Entertainment’s ticket business was too big a purchase for the German company, at the beginning of 2008 there was an opportunity to acquire See Tickets – the U.K.’s second-largest ticket agency – before the Dutch company snapped it up.

It was owned by Andrew Lloyd Webber’s Really Useful Group and the Germans were widely rumoured to be interested but ultimately a little too slow on the draw.

Stage Entertainment chief executive Henk Kivits said the acquisition of See Tickets was to strengthen his company’s position in the U.K. market.

More recently there looks to have been another opportunity for Eventim to enter the U.K. market by bidding for the biggest slice of Live Nation’s U.K. ticket-selling that isn’t already in its hands.

The ticket-selling operation for the 18 theatres that the U.S. company is in the process of hiving off to Ambassador Theatre Group for about £100 million ($164 million) was maintained as a separate entity. Apparently, when the Eventim deal was done, LN was already thinking of focusing on a live music-driven future and contemplating putting its U.K. theatres on the block.

The theatre ticket business is worth about 5 million sales per year, largely thanks to long-running shows such as “The Lion King” and “Wicked.”

The likely ticket sales to be generated from its Live Nation deal, which also excludes Wembley and Sheffield arenas, Festival Republic shows including the Reading, Leeds and Latitude festivals and the Academy Music venues, will likely be worth a little more than a third of that.

When the theatre ticket business was put up for sale, Eventim apparently wasn’t interested or prepared to stump up enough money to make its own footprint in the U.K.

ATG will now take LN’s theatre ticket business as part of a job-lot that comes with the theatres, even though the company already has its own ticketing arrangement.

The German company has told the CC that it has soft-pedaled on U.K. expansion since the LN-Ticketmaster proposals were announced.

Eventim has also told the commission that, in order to enter a new geographic territory, it needed a significant base of ticket inventory.

The CC may feel that allowing the merger will lead Live Nation to “limit its relationship” with Eventim, but – regardless of what happens with Ticketmaster – there are grounds for questioning whether LN can be particularly happy with the way its 2-year-old deal with the Germans is working out.

The letter of intent Live Nation and Eventim signed in December 2007, which was expressed as a binding agreement, said the German company would “provide a managed ticketing system” in the U.K. by January 2010. Industry insiders doubt it’ll be ready in time.

In the U.S. and on mainland Europe, where the deal rolled out at the beginning of this year, there have been some computer glitches on high-profile shows.

The Swedish and Finnish national press reported that the breakdown affected top shows – including Madonna’s summer show in Helsinki – and resulted in online buyers not being able to access tickets.