Isle of Wight Acquisition Greenlighted

The UK Competition and Markets Authority has cleared the merger between Live Nation and Isle of Wight Festival on the grounds that Live Nation’s existing festivals attract different audiences.   

Isle of Wight Festival 2016
– Isle of Wight Festival 2016

“The evidence collected indicates that the Isle of Wight festival and Live Nation’s existing festivals were not competing particularly closely for customers,” CMA stated.

Festivalgoers were still able to choose between Live Nation festivals and those offered by the competition, the explanation published Sept. 14 continues.

It also states “the fact that festival goers also choose between going to a festival and other activities will also ensure that Live Nation continues to face sufficient competition.”

The CMA also addressed concerns raised by third parties such as the UK’s Association of Independent Festivals, which had conducted market research of its own and came to the conclusion that a successful acquisition of Isle of Wight Festival would give Live Nation a 25 percent share in the UK festival market above 5,000 capacity.

However, according to the CMA, evidence indicates that “the merger will not materially strengthen Live Nation’s position in booking artists, and that a sufficient range and quality of artists will continue to be available for rival organizers of live music events.”

The authorities therefore decided not to launch an in-depth phase 2 investigation.

CMA states it consulted with “a number of sector experts, including other organizers of live music events and industry bodies, as well as festival goers.

“A survey was sent to several thousand customers of the Isle of Wight festival to gain insight into what drives their choice between different festivals (or other activities, such as going to a concert or on holiday).”

Paul Reed, the general manager of the AIF, commented: “Firstly, I want to make it clear that we didn’t start the fire – AIF decided to conduct some research looking into festival market share once the investigation was in motion. We were surprised by the results, with a single transnational entity headed rapidly towards ownership of 25 percent of festivals in the UK over 5,000 capacity.

“It is disappointing that the CMA has not taken the opportunity to broaden the scope of the investigation into Live Nation’s overall position. That said, I think the research AIF published shines a light on the current and future structure of the live music market and the genuine concerns from grassroots independent festival organizers around consolidation and Live Nation’s vertical integration, with tentacles across all aspects of the business.

“The question is, how many festivals do Live Nation need to acquire before the CMA take this seriously and give the issues the proper scrutiny they deserve?” Reed said.

Pollstar also reached out to Isle of Wight boss John Giddings and Live Nation UK for comment.