Eventim Moving On

CTS Eventim isn’t dwelling on its court defeat at the hands of Live Nation, preferring to focus attention on company growth and its improving financials.

On June 12 the arbitration court said Live Nation validly terminated its ticketing software license agreement with the German ticketing giant and doesn’t have to pay any compensation.

Before merging with Ticketmaster, Live Nation entered an agreement with Eventim to license the company’s ticketing software for shows in North America, with Eventim largely handling the UK and Europe markets for Live Nation shows. 
The deal fell apart when, following failed onsales, Live Nation announced its merger with Ticketmaster.

Eventim chief Klaus-Peter Schulenberg filed suit in 2010, claiming Live Nation broke its agreement and seriously damaged Eventim’s ability to get a foothold in the UK. The ruling, originally expected at the end of last year, came June 12 in favor of Live Nation.

A note on Eventim’s website said it had “not succeeded in the legal dispute against Live Nation” and that it would accept the ruling “without further comments.”

Eventim is now “able to fully concentrate on its operational business again,” a business that continues to do very well.
The recently announced Q1 figures showed group revenues were up 6.3 percent to euro 121.1 million ($161 million) and earnings before interest and tax improved by 14.7 percent to euro 23.0 million ($30.6 million).

Eventim investors didn’t seem rattled by the ruling. A couple of days after the news, the company’s stock – largely owned by Schulenberg – rose nearly 4 percent on the Frankfurt exchange. 

However, the rise had been much steeper in the days leading up to the ICC ruling, suggesting the market was anticipating an Eventim victory, much like many in the business.

When the LN-Eventim deal was announced in December 2007, Schulenberg said it was worth $100 million per year to his company. He was believed to be asking for as much as $2 billion in compensation.

LN countered by claiming the Eventim system broke down when faced with heavy onsale demand, citing its failure on major shows in the U.S., the UK, The Netherlands, Finland and Sweden.

Many close to the ticketing and promoting business are curious to know how arbitration went so pear-shaped for Schulenberg’s outfit.

Prior to the ruling, Eventim execs were confident of victory, expecting a payment of between $50 million and £100 million. Now, Eventim won’t get a bean. In fact, the only thing the Bremen-based firm gets out of a three-year battle is a heavy legal bill.

What’s worse is that by saying LN was valid to breach the agreement, the arbitration court may be perceived to be endorsing the U.S.-based promoter’s view of the Germans’ ticketing platform – that it’s “not fit for purpose.”

In Q2 2010 Eventim disclosed legal costs of euro 10 million, but that was at a time when nobody in the industry believed the legal fight would last three years.

If Live Nation has been making a contingency against the possibility of having to pay compensation, then LN chief Michael Rapino may even be sitting on a pot of funds he may be able to release for further international expansion, or whatever.

In the hour following the announcement of the arbitration court’s decision, he’d also seen his company’s stock take a $2 jump (8 percent), although it dropped close to 5 percent the next day in what can only be assumed as investors locking in gains after seeing the stock rise close to 80 percent over the last 12 months.