The Competition Commission (CC) has formally cleared the completed
acquisition by AEG Facilities UK (AEG) of the contract to manage Wembley Arena.
In its final decision, the CC has
concluded that the merger would not result in a substantial lessening of
competition in the markets for the provision of venue space to promoters,
provision of sponsorship opportunities or the provision of other event-related
services such as catering, confirming the Commission's preliminary ruling,
published in July.
Wembley Arena was previously operated by Live Nation
Entertainment. AEG is the current operator of three indoor live entertainment
venues in London: The O2 Arena, the Hammersmith Apollo, and IndigO2, and has
been recently awarded a five-year contract to deliver summer concerts at Hyde
Park. Following the merger, AEG will operate the two largest London indoor
venues: The O2 Arena and Wembley Arena. AEG is also a promoter, AEG Live (UK)
Limited, and owns a ticketing service, AXS.com.
Martin Cave, CC Deputy Chairman and Chairman of the AEG/Wembley
Inquiry Group, commented: ‘AEG’s opportunity to increase venue hire prices would be limited
because factors such as capacity, availability, brand, reputation and personal
preference are more important to acts booking the venue. Negotiation on the
venue hire price takes place after the venue booking has been confirmed. We
also considered whether AEG would have an incentive to reduce the quality of
the venue after the merger and found that doing so could damage AEG both in
financial terms and also in relation to its reputation at its other venues.’
The CC also stated that, while the merged entity might have the
ability to use its position as a promoter, ticket and venue operator to harm
its competitors in different parts of the supply chain, either by reducing the
supply of its services to its competitors or by supplying its services on worse
terms, it would not have the financial incentive to do so.
Specifically, the CC has found that, if the merged entity tried to
harm its competitors in these ways, it would suffer significant short-term
losses in pursuit of very uncertain long-term gains.
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