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Ticketmaster and Live Nation Ticketmaster and Live Nation A report on the completed merger between Ticketmaster Entertainment, Inc and Live Nation, Inc 7 May 2010 © Competition Commission 2010 Website: www.competition-commission.org.uk Members of the Competition Commission who conducted this inquiry Christopher Clarke (Chairman of the Group) John Longworth Jeremy Peat Richard Taylor Chief Executive and Secretary of the Competition Commission David Saunders The Competition Commission has excluded from this published version of the final report information which the inquiry group considers should be excluded having regard to the three considerations set out in section 244 of the Enterprise Act 2002 (specified information: considerations relevant to disclosure). The omissions are indicated by []. iii Completed merger between Ticketmaster and Live Nation Contents Page Summary .............................................................................................................................. 3 Findings .............................................................................................................................. 10 1. The reference ................................................................................................................ 10 2. The industry and the companies ................................................................................... 10 Live music industry ........................................................................................................ 10 Supply chain ............................................................................................................. 11 Live Nation .................................................................................................................... 14 Ticketmaster ................................................................................................................. 17 3. The merger ................................................................................................................... 18 Outline of the merger ..................................................................................................... 18 Rationale for the merger ................................................................................................ 19 Live Nation’s rationale for the merger ....................................................................... 19 Ticketmaster’s rationale for the merger ..................................................................... 20 Significance of the companies’ UK activities in the merger ....................................... 21 4. Jurisdiction .................................................................................................................... 21 Interim measures .......................................................................................................... 22 5. The markets .................................................................................................................. 22 Primary retailing of tickets for live music events ............................................................ 22 Consumer preferences ............................................................................................. 22 Competition between ticket agents ........................................................................... 23 Geographic market definition .................................................................................... 24 Product market definition .......................................................................................... 24 Market shares ........................................................................................................... 26 Competition between existing primary retailers of live music tickets ......................... 27 Barriers to entry and expansion in the primary retailing of live music tickets ............. 28 Assessment of competition in the market for the primary retailing of live music tickets in the UK .................................................................................................... 35 Promotion of live music events ...................................................................................... 35 Market definition ....................................................................................................... 35 Market shares ........................................................................................................... 35 Barriers to entry and expansion ................................................................................ 36 Bargaining power of promoters ................................................................................. 36 Market power of Live Nation as a promoter .............................................................. 36 Venues used for live music events ................................................................................ 37 6. The counterfactual ........................................................................................................ 38 Live Nation’s agreement with Eventim ........................................................................... 38 Terms of the LOI relevant to the UK .............................................................................. 39 Live Nation controlled tickets under the LOI .................................................................. 40 Other tickets influenced by Live Nation ..................................................................... 42 Live Nation’s use of different retail channels ................................................................. 43 Live Nation’s objectives as a promoter and venue operator ...................................... 43 Live Nation’s financial incentives to sell through different retail channels .................. 43 Live Nation’s corporate objectives to sell through its own retail channel ................... 44 Eventim’s projections ................................................................................................ 45 Live Nation’s use of Eventim and other retail channels ............................................. 47 Summary of our assessment of Live Nation’s use of different retail channels ........... 51 Effect of Eventim’s entry on the UK market for the primary retailing of live music tickets ........................................................................................................................ 53 Live Nation’s views ................................................................................................... 53 Opportunities in the market ....................................................................................... 54 1 Partnership with Live Nation ..................................................................................... 55 Eventim as a distinctive new entrant ......................................................................... 56 Eventim’s success under the LOI in other geographic markets ................................. 58 Eventim’s future market share .................................................................................. 60 Conclusions on the counterfactual ................................................................................. 61 7. Competitive effects of the merger in the market for the primary retailing of tickets for live music events ....................................................................................................... 62 Horizontal effects of the merger .................................................................................... 62 Vertical effects of the merger ......................................................................................... 63 Efficiencies ............................................................................................................... 64 Effects on other ticket agents due to Live Nation’s position in the markets for live music promotion and live music venues ..................................................................... 64 Foreclosure of Eventim ................................................................................................. 65 Eventim’s position in the UK and the factors affecting its success ............................ 65 Possible ways in which the merged entity could foreclose Eventim .......................... 66 Limiting the total number of Live Nation-controlled tickets ........................................ 67 Limiting Eventim’s allocation of Live Nation controlled tickets for sale ...................... 69 Inhibiting Eventim’s growth in other ways ................................................................. 73 Limiting Eventim’s revenues from Live Nation .......................................................... 73 Effect of allocating tickets to other ticket agents ........................................................ 74 Additional incentives for the merged entity to foreclose Eventim if it results in Eventim exiting the market .................................................................................... 75 Conclusions on Live Nation’s ability and incentive to foreclose Eventim ................... 75 Effects of the foreclosure of Eventim ........................................................................ 75 Conclusion on the foreclosure of Eventim ................................................................. 81 Foreclosure of other competing ticket agents ................................................................ 81 Ability .......................................................................................................................
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