Live Nation Deal Probed

Live Nation Deal Probed

Live Nation Entertainment Inc. is aggressively expanding its global operations, but a government investigation has slowed its bid to buy one of the world’s biggest concert promoters.

Ireland’s Competition and Consumer Protection Commission announced that they are probing the purchase by London-headquartered LN-Gaiety Holdings Ltd., a Live Nation subsidiary, of MCD Productions Ltd., a Dublin-headquartered concert promoter.

The commission stated earlier this month that, following a preliminary probe, a “phase two” investigation is required to see if the acquisition might lead to a “substantial lessening of competition.”

“A phase two investigation into an acquisition is always serious,” said Andre Barlow, a Washington, D.C., antitrust lawyer who formerly worked for the U.S. Justice Department’s antitrust division. “Most transactions in Ireland are approved in phase one investigations.”

Live Nation declined to answer questions on the MCD Productions acquisition investigation.

The Beverly Hills headquartered company would also not answer questions about the global expansion plan of its business, which already controls about 80 percent of the U.S. primary ticketing market through subsidiary Ticketmaster Entertainment, and about 60 percent of the U.S. concert promotion industry.

“I will never understand why the LABJ would cover an issue in Ireland with a company subsidiary,” Live Nation spokeswoman Carrie Davis said in an email.

Ambitions in Ireland, England

LN-Gaiety is one of Live Nation’s most longstanding subsidiaries, operating under the company since 2005.

LN-Gaiety is 51 percent owned by Live Nation and 49 percent controlled by Denis Desmond – who is also the owner of MCD Productions.

The London Times in March called Desmond “one of the most powerful figures in the global music industry.”

Trade publication Pollstar ranked MCD Productions as the ninth biggest promoter in the world as based on total tickets sold to shows booked by each promotion company.

Desmond had called the deal, announced in August for undisclosed terms, a “logical extension” of his partnership with Live Nation.

The commission has yet to detail what specific concerns it has with the purchase; it will publish a report sometime before March 2 on why the deal is being investigated.

The commission is already investigating Ticketline Unlimited Co., Ireland’s largest ticketing agent and another Live Nation subsidiary, in a probe it launched in 2017.

“The investigation is focused primarily on potentially anti-competitive conduct” by Live Nation, emailed Aine Roddy, a commission spokeswoman, including “exclusive arrangements, rebates, and high service charges in providing tickets and ticketing services.”

In addition to its ownership of Ticketline Unlimited Co., Live Nation owns 3Arena, a 13,000-seat indoor amphitheater in Dublin, and manages multiple theaters in Ireland.

Live Nation is not currently facing anti-competitive investigations in England, home to LN-Gaiety.

The U.K. Competition and Markets Authority did conduct a 2017 probe into LN-Gaiety’s purchase of the Isle of Wight Festival.

The agency determined that Live Nation’s acquisition did not restrict competition in the outdoor festivals market and let the deal proceed.

Global grab

With the company’s grip on the U.S. ticket and concert promotion markets, Live Nation has increasingly focused on strengthening its share of the international market.

Live Nation now has more international subsidiaries, 254 companies spread across 46 countries, according to its 2017 annual report, than U.S. subordinate companies, of which there are 221.

Live Nation’s recent international acquisitions include a December purchase of Argentinian concert promoter, DF Entertainment.

Michael Rapino, Live Nation’s chief executive, said during a July earnings call he believes the company is “somewhere in the 20 percent to 30 percent global market share” for concert promotions, meaning there is a “huge opportunity” for the company to grow further.

Government investigations of anti-competitive behavior could slow some of this growth, Barlow said.

“Given Live Nation’s dominance in certain markets, its acquisitions and conduct will continue to draw scrutiny by regulators across the globe,” Barlow said.

Government intervention aside, Rapino voiced confidence during the July earnings call that there are few capital limits to Live Nation’s growth.

“We don’t see any real capital constraints,” Rapino said. “There has never been an acquisition or a bolt-on or something that we want to do that our balance sheet hasn’t afforded us.”

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