The Stage

ATG’s Live Nation purchase cleared by OFT

Published Wednesday 10 February 2010 at 16:49 by Alistair Smith

Ambassador Theatre Group’s £90 million purchase of Live Nation’s UK theatres has been cleared by the Office of Fair Trading and will not be referred to the Competition Commission.

The OFT has been investigating the merger since the end of last year and, following extensive consultation with the industry, has concluded that “there is no realistic prospect of theatregoers losing out through higher prices or an overall reduction in choice of productions or theatres.”

According to the OFT, it investigated the completed acquisition following a complaint from a concerned third party.

A number of additional parties also raised concerns during the OFT’s investigation. These concerns were that, after the purchase, ATG would face less direct competition, giving it the ability to increase prices to producers, foreclose rival theatres by cross-selling a portfolio of theatres to producers, and foreclose rival producers by restricting access to its enlarged portfolio of theatres.

However, the OFT found that the concerns were unfounded.

It claims that it did not receive convincing evidence that ATG and Live Nation theatres competed closely pre-merger and that, given the way that producers purchase theatres for tours, ATG would not have the ability and incentive to cause independent rival theatres to close.

It also found that ATG would not have any ability and incentive to foreclose other producers given that it has only a very limited presence in theatre production and that rival producers provide the vast majority of high quality musical content to regional theatres.

Alastair Mordaunt, OFT director of mergers, said: “This acquisition creates a very sizeable organisation at the core of this culturally important industry, and a number of producers and theatre operators were concerned about the effects this may have on audiences.

“The OFT undertook a rigorous examination of the market, and we are confident that the merger will not result in a drop in the standard of performances or higher ticket prices for theatregoers.”

The merger clearance means that ATG can now move forward and fully integrate the two businesses.

Howard Panter, ATG’s joint chief executive and creative director, said: “We are pleased with the outcome of the OFT review. We firmly believe that the transaction is of real benefit to theatregoers in the UK and for the theatre industry in general.”

ATG will now manage more than 11,000 seats in the West End - more than any other theatre operator - and nearly 38,000 seats outside London. The next largest theatre operator in the regions - HQ Theatres - will control only around 8,000 seats by comparison. In total ATG will manage nearly 50,000 seats across the country, making it by far the largest theatre operator of the last half century. It now operates venues including the Apollo Victoria and Lyceum Theatres in London, as well as the Edinburgh Playhouse, Sunderland Empire and Bristol Hippodrome.

For more on this story, see next week’s print edition of The Stage