CC May Face Conundrum

The deadline for making submissions to the U.K. Competition Commission regarding the proposed Live Nation-Ticketmaster merger passed Oct. 29, which means the U.K. press can only speculate on what the monopoly authority will rule at the end of the month.

Speculation has also centered on what rival promoter AEG will do for a ticketing partner, if the global promoter goes ahead with its intention of leaving Ticketmaster if the LN merger goes through.

There’s been the obvious suggestion that AEG could partner with CTS Eventim, should the Bremen-based company find the merger leaves it a long way short of the U.K. business it would have expected Live Nation to deliver from the contract the two companies signed in 2007.

LN chief Michael Rapino has said his company intends to honour the deal and Eventim chief Klaus-Peter Schulenberg said he’s satisfied with the American company’s “contractual fidelity.”

The speculation regarding AEG and Eventim appears to have come from the section of the CC report that says the German company’s position regarding U.K. market entry might be remedied if it could find an alternative content provider.

Whatever the speculation, there seems little real evidence that AEG – which sells 5.5 million concert tickets per year through Ticketmaster – is likely to step into the gap.

Although the AEG submission isn’t detailed on the CC Web site, the authority’s preliminary report suggests the company would rather see the merger turned down so it could stick with Ticketmaster in the U.K., leaving its global rival to pick up the pieces of its deal with the Germans.

AEG has had an exclusive deal with Eventim in Germany for just more than a year, which the German company expects to be worth 1 million in annual ticket sales. But AEG doesn’t seem to have indicated that it’s prepared to help ease its mainland European partner’s way into the U.K. market.

Even the CC conceded that it was “very unlikely” that AEG would sponsor or “significantly encourage” Eventim’s entry into the U.K. market “in the foreseeable future.”

This makes it somewhat harder for the CC to find a remedy that means the merger won’t affect Eventim’s position, given that neither AEG nor SJM Concerts, another promoter with enough ticket volume, shows any interest in coming to its rescue by partnering with the German company.

If no remedy can be found, the CC may find it difficult to do anything other than block the merger. But that’s by no means an easy option, particularly if the U.S. Department Of Justice allows the merger in America.

The softer and clearly more expedient solution to the CC’s conundrum may be delaying the decision from the end of November to the end of January. The CC is legally entitled to ask for another eight weeks, provided it can show good reason why it’s so far been unable to reach a verdict.

The eight-week delay may be enough time for the CC to get a clearer direction from the U.S., where Ticketmaster and LN are both based.

The odds on the CC taking that course of action may grow shorter as the end of November looms closer.