Ambassador Theatre Group’s £90 million purchase of Live Nation’s UK theatres is being investigated by the Office of Fair Trading, in a move that will prevent the two businesses being fully integrated until early 2010.
The OFT has issued ATG with “initial undertakings” – a binding agreement which means it has to continue to operate the Live Nation venues as a separate entity, while the OFT investigates any issues which might have arisen from the acquisition.
During the process, the OFT will canvass comment and opinion from the theatre industry as to whether the purchase has led to a “substantial lessening of competition” within the market. It is understood that, with a purchase of this scale, the OFT’s involvement is customary and does not imply that it feels there are monopoly problems with the acquisition. While OFT does not have the power to prevent the transaction, it can decide to refer the purchase to the Competition Commission, which could enforce conditions on the sale.
Whatever the outcome of its investigations, the process is likely to take until mid-January at the earliest. This will include a 40-day period in which members of the industry are invited to comment.
It is understood that ATG remains confident the OFT will not raise any issues regarding the sale, as its portfolio of 40 venues still only represents a small proportion of the nearly 1,000 across the UK.
ATG chief executive Howard Panter told The Stage: “There are three basic points about the OFT. One, in a transaction of this scale, we were anticipating talking to the OFT. Two, we’re very content to be in dialogue with the OFT, as we are at the moment. And three, we’re very confident that no adverse competition issues will emerge from our discussions and meetings with the OFT.
“We’re advised that this process could take as long as until the middle of January. We know the procedures we need to adopt in the intervening period, which we are doing. [The procedures] are as OFT and we would like them to be.”
The news follows concerns raised by producers in last week’s issue of The Stage that ATG’s purchase of Live Nation’s 14 regional venues could create a near monopoly of the touring market outside London. Following the purchase, ATG will control 11,000 seats in the West End – roughly on a par with Delfont Mackintosh and the Really Useful Group – while outside London it will manage more than 38,000 seats. By comparison, HQ Theatres, the next largest regional theatre operator, manages around 8,000 seats.
For a full interview with Howard Panter about the purchase, see next week’s issue of The Stage