LN Makes Splash In Germany

Live Nation has sold its 20 percent stake in German promoter Marek Lieberberg Konzertagentur to majority shareholder CTS Eventim, in what may be a further indication of Live Nation’s frustration with the ticketing giant.

However, LN will not lose its exposure to the German market, with the announcement it’s acquiring Hamburg-based promoter Johannes Wessels’ Music Pool and opening its own office in the country.

The Music Pool acquisition will likely come as a surprise, given that many of the acts Music Pool works with have come via Wessels’ close business relationship with rival promoter AEG’s Rob Hallett. Acts include Beyoncé, Justin Timberlake, The Backstreet Boys, R. Kelly and Leonard Cohen.

It’s not known if AEG was also making a play for Wessels’ company, but on March 10 LN confirmed it had appointed him managing director of Live Nation Germany.

It wasn’t possible to get comment from Music Pool or Live Nation after office hours. Wessels’ first shows for Live Nation Germany will be Lady Gaga’s May dates in Berlin, Hamburg and Oberhausen.

Although Music Pool isn’t as big as Lieberberg’s Frankfurt-based MLK, Wessel has promoted major acts and the deal will give LN the major platform it’s sought in Germany for nearly a decade.

The sale of its interest in Lieberberg appears as a note in the last set of LN accounts published at the end of February. It may be nothing more than another example of the widening rift between Live Nation and Eventim.

For six years the US-based company had held the stake in MLK with the idea of growing it until it had majority control, but the current state of relationships between LN and Eventim have put a block on that happening in the foreseeable future.

LN appears to have been unhappy about having a minority stake in a company where Eventim is and likely to want to remain as the major shareholder.

LN international chief exec Alan Ridgeway said the deal with Lieberberg’s company, which was done by Clear Channel Entertainment in December 2003, still reamined “a good investment.”

Lieberberg told Pollstar he felt the six-year partnership with Live Nation worked extremely well and he was disappointed the US company and Eventim couldn’t have found a way of continuing the relationship.

He said he offered to act as a mediator between the two companies but it seems they have drifted too far apart.
It’s not known how much CCE paid Lieberberg for his shares, but the resale to Eventim has been estimated at being worth somewhere between euro 6 million and 8 million.

In 2003 it was a strategic acquisition by Clear Channel Entertainment, overseen by current LN chief Michael Rapino. The company didn’t own a German promoter and the Lieberberg share deal provided it with at least a partner in the territory, something Rapino found helpful when pitching for global and European tours.

Since the signing of the 10-year ticket deal the two companies agreed to in December 2007, relations between LN and Eventim have cooled to the point of being a grudging mutual toleration.

When that deal was done, Eventim chief Klaus-Peter Schulenberg said the “alliance between two market leaders” would boost its 60 million annual sales to 100 million “within only a few years.”

A year ago, shortly after the news of the planned LN-Ticketmaster merger broke, Rapino said during an earnings call that LN would honour its contract with Eventim.

Schulenberg said Rapino’s comments removed all speculation about the deal, although he said he never doubted Live Nation’s contractual fidelity.

A year later and Rapino said during a similar earnings call Feb. 25 that he was he was less than thrilled with Eventim and was switching back to Ticketmster in the US.

There was no official response from Germany, only off-the-record references to the fact Rapino already appeared to be creating a platform on which he could justify dumping Eventim.

Part of the German company’s successful appeal against the UK Competition Commission’s approval of the LN-Ticketmaster merger was that the monopoly authority hadn’t paid sufficient attention to the possibility that LN would try to wriggle out of its commitment to Eventim.

If that really is Rapino’s line of attack, the irony is that the shortcomings in Eventim’s software appear to be supplying him with the ammunition for it.

At the beginning of March, Live Nation UK president Paul Latham told Pollstar the company expected there would be teething problems with the launch of the system in Great Britain. But, having seen that launch delayed by a month and then experienced software problems over the first month of operation, he’s now looking to see some improvement.

Another problem is said to be Eventim’s lack of profile in the UK, which appears to be causing Brit ticket-buyers to visit other sites with more familiar names.

Latham fears one of the consequences may be that Live Nation venues operating the Eventim platform may not sell as quickly as other venues on the same tour.

He said he has a duty to promoters within LN and those from outside, who supply 80 percent of the company’s content, to maintain the standard of service that they’ve previously been used to.