CTS Eventim Four Artists Merger Denied In Germany

Germany’s antitrust authority, the Bundeskartellamt, denied the takeover of Four Artists by CTS Eventim.

Both companies had announced the deal in March. As reported, the acquisition was still subject to clearance by the authorities.

The approval was not granted. Andreas Mundt, president of Germany’s cartel office reasoned that CTS Eventim, being the country’s biggest ticketing system by a long shot, was already dominating the market. The company has integrated many promoters into its corporate structure in the past, and the acquisition of Four Artists would not only give CTS control over “additional, relevant ticket contingents,” but also “further expand its market position.”

– Eventim

Around 60 to 70 per cent of all tickets sold in Germany are distributed via CTS Eventim’s systems.

“The other vendors are significantly smaller, mostly only present regionally and partly dependent on cooperating with CTS,” the cartel office argues.

The fact that CTS Eventim owned and had exclusivity deals in place with many promoters led to such a high overall market volume and a clear advantage over the competition when it came to competition-relevant customer data.

Four Artist promotes some 300 German and international acts in Germany, including David Guetta, Rea Garvey, Die Fantastischen Vier and Marteria.

The cartel office believes this would add between 500,000 and 1 million tickets per annum to the ticket contingent CTS Eventim controls, which would weaken the potential for expansion of competing ticketing systems.

A CTS Eventim rep told Pollstar that the company took note of the cartel office’s decision and is currently examining its explanation.

“We principally take the view that the takeover of Four Artists is approvable and reserve the right to take legal steps against the decision.”

Alex Richter, managing director and shareholder of Four Artists, told Pollstar: “For us the decision is incomprehensible, and we’re currently considering taking legal action against the decision.”

CTS Eventim’s ticketing business boosted the company’s financial results in the first nine months of this year. Ticketing revenues rose by 10.7 per cent year-on-year to €265.9m, normalized EBITDA climed by 19.5 per cent to €98.4m.

The group claims to have sold more than 30 million tickets, which marks a first in the Q1-Q3 period. While traditional home markets performed well, the company’s expansion in South America and Scandinavia helped.

Thanks to the group’s recent acquisitions, the most prominent of which was the takeover of a majority stake in FKP Scorpio last year, CTS Eventim’s live entertainment segment grew significantly by 43.3 per cent to €487.6m year-on-year.

An increased number of tours compared with last year’s period as well as events attracting large audiences, such as the premiere of New Horizons, contributed to the revenue growth too. However, EBITDA in the live entertainment segment decreased by 14.2 per cent to €21.8m. The reason for this are “investments in establishing new festival brands, combined with higher advance costs for future events resulted in temporary impacts on earnings,” according to the company.

Overall group revenues rose by 29.4 per cent year-on-year to €745.6m. Normalized group EBITDA increased by 11.7 per cent to €120.3m.

CTS Eventim’s lates acquisitions include Italian promoters Vertigo and Friends & Partners.

CEO Klaus-Peter Schulenberg said, “the trend in recent months has shown that we are making excellent progress in implementing our growth strategy and making CTS Eventim more digital and international. We expect higher revenues and stronger earnings for the year as a whole, compared to 2016.”