OFT grounds for referring merger of London music venues

OFT decision (14 pages, PDF) to refer to the Competition Commission the proposed merger of the owners of live music venues including Hammersmith Apollo, Brixton Academy, Shepherd's Bush Empire, The Forum and The Astoria. The OFT agreed with concerns that the merger could lessen competition in the supply of live music venues with capacities around 2,000 and around 5,000. It rejected the parties' arguments that other venues would provide a continuing competitive constraint, agreeing instead with third-party views that differences in ambiance or limited availability prevented effective competition. It also rejected the parties' assertion that there was sufficient countervailing buying power (if only because "not all agents manage artists with such considerable buyer power"), or that the parties' charges would be constrained by their wish to allow low ticket prices to maximise attendance and spending on refreshments and merchandise.

Besides horizontal issues (which are sufficient to trigger the referral), the OFT notes some concerns about the links between the merged venue operator and major promoters, in particular the possibility that the merger may enable unfair exclusion of independent promoters from the market and/or possible collusion between promoters.

The Competition Commission's initial deadline for submissions (2 pages, PDF) expired before the publication of the OFT's decision. The Commission is expected to report by Friday 2 February 2007.

Filed under Competition Commission, Media, Merger control, OFT.

Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.

About Reckon