Eventim Sours LN Relationship

Regardless of whether CTS Eventim’s appeal against the UK Competition Commission’s approval of the Live Nation-Ticketmaster merger is successful, the German company has likely soured its relationship with the world’s biggest concert promoter.

Its chances of success have also taken a huge hit by the merger being approved in the US – unless Eventim wants to challenge that as well.

After reversing its original decision to block the merger in the UK, the British competition authority – even if it’s forced to reconsider the matter – is likely to stick with its decision, particularly as it now has the lead given by its American counterpart.

One London-based Live Nation exec told Pollstar the appeal suggests the German company must have a different view of the word “partnership,” referring to the 10-year ticketing deal his company signed with Eventim at the end of 2007.

Live Nation UK president Paul Latham says LN fervently believes the appeal is “without foundation” and will be no more than “a fleeting annoyance.”

He also said it’s disappointing that one of his company’s partners has chosen to take this action “at a time when our respective teams are working so hard, and in close unison, to ensure the successful launch of our new ticketing platform.”

Under that agreement, Eventim should have started selling Live Nation tickets in the UK as of Jan. 1. But glitches with its software have delayed the launch for a month.

Eventim’s appeal has possibly exacerbated the frustration many UK-based Live Nation execs already felt toward the German outfit.

The CC originally provisionally turned down the merger because it would impede the German company’s entry into the UK market, but later reversed that decision because the merger would “make little difference to the prospects of Eventim’s success in the UK.”

A source reportedly close to the process told The Independent the CC was a bit surprised by the submissions received after the initial ruling, which indicated the market was more diverse than it originally thought.

The CC’s U-turn effectively means Eventim’s UK market position depends on its fulfillment of the Live Nation contract, as the monopoly authority isn’t affording it any further leverage. Eventim needs to start delivering on the UK side of that contract because its position isn’t being hammered home by the CC.

The width of the rift that appears to be opening between Eventim and Live Nation will likely hinge on just how far the German company is prepared to take the issue. At the moment, Eventim’s appeal seems to be the only obstacle to global clearance.

If it fails to block the merger, Eventim chief Klaus-Peter Schulenberg may fear his company will lose a huge slice of business to the newly merged LN-TM company when its Live Nation contract runs out in about seven years.

Under UK antitrust law, the Competition Appeal Tribunal can review and reopen decisions by the Competition Commission. If Eventim loses the appeal, it can still continue its effort to derail the deal by taking its case to the Court of Appeal.

It wasn’t possible to get comment from Live Nation chief Michael Rapino on how or why Eventim is trying to stall his TM merger plans in the UK. He said he was happy to leave that side of things to his London office.

Eventim legal and communications head Rainer Appel greeted the CC’s approval of the LN-TM merger by saying his company continues “to look forward to our co-operation” with Live Nation. But Eventim’s position now is that the commission denied it the right to a fair hearing, thereby depriving it of a reasonable opportunity to respond intelligently to the main reasons for the commission reversing its view.

“The commission erred in its assessment of the effect of the merger on the market,” the Bremen-based company complained in a note to the Competition Appeal Tribunal. At press time, Appel hadn’t responded to requests for a revision of his pre-Christmas comment.

Prior to the deal being given approval in the US, Live Nation and Ticketmaster released a joint statement saying the UK appeal is without merit and that they are confident the tribunal will uphold the commission’s ruling.

“The Competition Commission has definitively decided that the transaction does not raise issues that would harm competition,” the statement said.