LN Tells Eventim To Compete

Live Nation has told the UK Competition Commission that it’s not its proposed merger with Ticketmaster potentially blocking CTS Eventim’s entry to the UK market – it’s the German company’s inability to attract other business.

The company says Eventim isn’t being excluded from the competitive process, it’s just that potential customers in the UK have chosen not to use the Munich-based company’s services.

The submission to the CC points out that – regardless of the prospective merger with Ticketmaster – Live Nation will honour its undertaking to provide Eventim with all the tickets it agreed under the letters of intent signed at the end of 2007. It says Eventim’s problem is that it hasn’t been able to secure agreements to sell tickets for other promoters and venues.

“The fact that these customers may not currently express a desire to use CTS therefore reflects the normal competitive process, not ‘foreclosure’ from that process,” the submission explains.

Major UK promoters including AEG and SJM Concerts have made submissions to the CC saying they were not prepared to supply the business that would underwrite Eventim’s entry into the UK market.

AEG does partner with Eventim in Germany and in August 2008 the companies announced an exclusive ticketing deal estimated to be worth more than 1 million ticket sales per year.

It covers major arenas including the O2 World in Berlin and Hamburg Color Line Arena, as well as Anschutz-owned ice hockey teams Eisbären Berlin and Hamburg Freezers.

If the LN-TM merger goes through, AEG is likely to look for another global ticketing solution rather than extend its relationship with the German company.

LN’s submission is part of its response to the CC’s provisional ruling published Oct. 8 that said it believed that, if the LN-TM merger proceeds, “Live Nation will seek to limit its relationship with CTS [Eventim], with the effect of putting CTS’s future prospects in the U.K. in considerable doubt.”

Live Nation chief Michael Rapino confirmed in March that its long-term alliance with CTS Eventim would remain in full effect and wouldn’t be impacted by the U.S. company’s planned merger with Ticketmaster.

“This removes all speculation,” said Eventim chief Klaus-Peter Schulenberg in a statement, apparently happy with the way Rapino re-affirmed the arrangement. “We have never doubted the contractual fidelity of Live Nation.”

Bob Angus of London-based Metropolis Music, which runs national tours and the Chelmsford leg of the 80,000-capacity V Festivals, was another promoter puzzled by the CC’s concerns over Eventim.

“[The CC] stopped a deal going through because some German company wants to come to this country. I can’t believe they have done that,” he said at the time of the provisional decision. “I could have understood it if it had been for other reasons.”

In its most recent submission to the CC, Live Nation detailed “important factual and analytical errors” in the ruling that shot down the TM-LN merger as well as “two fundamental flaws” in its legal analysis that are fatal to its provisional conclusions.

It points out that the CC has acknowledged that Live Nation has only between 15 and 20 percent of the market, which isn’t enough to give it the power to block out Eventim.

In Germany Eventim owns a 50 percent share of The Medusa Group, a handful of the country’s major promoters that includes Marek Lieberberg, Peter Reiger and Folkert Koopmans, but has failed to establish a tie with a UK-based promoter.

Live Nation says there is nothing about the TM merger that blocks Eventim from competing for other UK promoters’ business in the same way as it successfully competed for the LN business.

The deadline for the completion of the Competition Commission inquiry has been extended to January 19, 2010.

Pollstar revealed details in October of at least a couple of occasions in the last two years when Eventim could have bought into the UK market as a major force but either passed up on the chance or apparently didn’t bid enough money.

At the beginning of 2008 there was an opportunity to acquire See Tickets – the UK’s second-largest ticket agency – before Dutch giant Stage Entertainment 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.

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

The ticket-selling operation for the 18 theatres that the US company has just hived off to Ambassador Theatre Group for about £100 million ($164 million) was maintained as a separate entity. Eventim bid for the theatre ticketing business but appears to have come up short. The Ambassador deal is under investigation by the Office Of Fair Trading.

Apparently, when the Eventim deal was done, LN was already thinking of focusing on a live music-driven future and contemplating putting its UK theatres on the block.

Live Nation UK music and venues president Paul Latham confirmed that CTS Eventim will begin selling his company’s tickets in the UK as of Feb. 1.

The deal was originally set to begin Jan. 1 but has been delayed for a month because of reported computer and software issues.