The Office of Fair Trading (OFT) has decided to refer the proposed merger between Live Nation Inc and Ticketmaster Entertainment Inc to the Competition Commission under the Enterprise Act 2002. The two companies operate at different levels of the music industry in the UK, with Live Nation acting as a promoter and venue operator for live music events and Ticketmaster as a ticketing agent. Ticketmaster has traditionally been Live Nation’s principal ticket agent, currently under a deal due to expire in December 2009. Prior to the proposed merger, Live Nation entered into an agreement with another ticketing agent, CTS Eventim (CTS), whereby CTS would begin providing ticketing services to Live Nation, in effect replacing Ticketmaster.
The OFT has referred the proposed merger to the OFT on the basis that there is a realistic prospect of a substantial lessening of competition due to the risk that CTS - having been expected to provide a new competitive dynamic to the live music market – would in fact withdraw from the market. Even if CTS were to remain in the market, there is a risk that its competitive strength could be significantly reduced without the benefit of its agreement with Live Nation. The Competition Commission is expected to report on whether the proposed merger should be allowed to proceed by 24 November 2009.