Opinion: the ownership of the festival shows how major parts of the global live music industry have ended up in the control of a single company
With the Electric Picnic just around the corner, the eyes of the Irish music industry turn once again towards Stradbally Hall in Co Laois. Now in it's 15th year, the festival is a major success story and weekend tickets sold out long ago.
But as we find is so often the case in the global music industry today, the Irish festival is now part of the portfolio of the world's largest live entertainment company. The story of how Live Nation came to be involved in the Electric Picnic shows the US multinational corporation’s history of takeovers and mergers using subsidiary companies, joint ventures and investment vehicles. It also highlights the gradual process which has resulted in major portions of the global live performance industry ending up in the hands and control of a single entity.
Live Nation began life as a traditional concert and stage performance promoter called SFX Entertainment. Started in 1996 by a New York businessman named Robert F. X. Sillerman, the company was sold in 2000 to Clear Channel Communications (now iHeartMedia Inc). Five years later, the company (then called Clear Channel Entertainment) was spun off as an event promoter called Live Nation.
From CNBC, an interview with Live Nation CEO boss Michael Rapino about the company's growing share of the live music market, the move to digital tickets and regulation
From the very beginning, Live Nation pursued an expansion policy of mergers and acquisitions, buying up smaller promotions companies and venues at a tremendous rate. After its spin-off from Clear Channel, the company began signing deals with major artists such as Madonna, Shakira, U2 and Jay-Z, with the intent of not only controlling the live performance side, but also becoming involved with the record side of the business as well.
Although Live Nation eventually dropped its interest in recording, they continued to buy up promoters, venues, festivals and merchandise companies, quickly gaining control of nearly every aspect of the live performance market. For example, the company bought eight major festivals worldwide in 2016 and has a stake in about 20 UK festivals, including Download, Reading and Leeds though subsidiary companies like Festival Republic.
Live Nation as we know it today really came about after a massive merger in 2010, when Live Nation and Ticketmaster joined forces to become Live Nation Entertainment. This merger created a good deal of concern at the time, since it combined the world’s largest concert promotor and the world’s largest ticket seller. Since Ticketmaster was used by many of Live Nation’s direct competitors, the opportunities for conflicts of interest and anti-competitive problems were numberless.
A 2009 US Senate hearing on the merger between Live Nation and Ticketmaster
Many artists, perhaps most notably Bruce Springsteen, voiced concern over the impact of this merger on the live music industry. A coalition of consumer rights and anti-trust groups attempted to divert the merger, citing the companies’ "unprecedented control over pricing and access" to live shows and ticketing data. Despite this opposition, the merger was approved with relatively few conditions in territories across the globe, and Live Nation became the single most powerful live entertainment company in the world.
This merger was perhaps the biggest episode in Live Nation’s past, though it is far from the only time the company has come under scrutiny from trade regulators. For example, its 2016 takeover of the Isle of Wight festival was scrutinised, but ultimately allowed by the UK’s Competition and Markets Authority .
Its mooted purchase of Ireland’s biggest live music company MCD Productions was cleared by Irish regulators earlier this year. However, the UK authorities have called for further investigation, citing concerns over how the deal relates to the Northern Irish music market and Live Nation’s ownership of Ticketmaster.
From RTÉ 2fm's Dave Fanning show, an interview with Mean Fiddler founder Vince Power
The relationship between Live Nation and MCD goes back to 2005 and a joint venture originally called Hamsard, where 50.1% of the entity was owned by Live Nation and 49.9% by MCD. This was set up in order to buy Vince Power’s Mean Fiddler music group, a company since rebranded as Festival Republic.
Now known as as LN-Gaiety Holding, the joint venture and investment vehicle co-owned by the US company and MCD owners Denis Desmond and Caroline Downey has become a significant player in the Irish, UK and European live business. Desmond has been chairman of Live Nation UK and Ireland for the past few years.
Live Nation’s business interests in Ireland now includes the Electric Picnic, the Co Laois festival founded in 2004 by the late John Reynolds from POD Concerts. Through its Festival Republic subsidiary, Live Nation first became involved in the festival in 2009 and took full control of the event in 2013.
From RTÉ News, tributes are paid to concert promoter and Electric Picnic founder John Reynolds who died in October 2018
If its purchase of MCD goes through, Live Nation will have this festival to add to its long list of other Irish interests, including management and operation of venues like Dublin’s 3Arena, Bord Gáis Energy Theatre and Olympia Theatre.
As a result, concerns have been voiced once again about the potential for the creation of a monopoly by the company, which also controls such a large amount of the event ticketing business. Competition authorities warn that the buyout of an Irish-owned promotions company may lead to higher ticket prices.
It also raises issues for Live Nation’s remaining competitors, many of whom rely on Ticketmaster to sell their tickets and on Ticketmaster data to market their events. Even those who do not rely on Ticketmaster may suffer, as finding venues to host their events becomes more difficult and artists are pressured to use Live Nation venues for their full tour.
But as it seems unlikely that any of these concerns will impact on Live Nation's latest deal, what will this mean for future ticket prices and festival goers? Looks like we’re going to find out.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ