Anticipated acquisition of Mean Fiddler Music Group by Clear Channel Entertainment (Music) Limited and Gaiety Investments Limited

Affected market: Concerts and music festivals

No. ME/1680/05

Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction, jurisdiction, third party views, assessment and decision.

The OFT's decision on reference under section 33(1) given on 17 June 2005. Full text of decision published 27 June 2005.

PARTIES

Mean Fiddler Music Group plc (Mean Fiddler) is a music company active in the provision of festivals, live music venues and touring and promotion services. For the financial year ending 1 January 2005 Mean Fiddler generated a turnover of £48 million.

Clear Channel Entertainment (music) UK Limited (Clear Channel) is a wholly owned subsidiary of Clear Channel Communications, a diversified media company listed on the New York Stock Exchange. In the UK, Clear Channel has interests in various sectors including music, sports talent management and theatre. For the financial year ended 31 December 2004 the UK turnover of Clear Channel Entertainment was £197 million, £122 million of which was accounted for by the music division.

Gaiety Investments Limited (Gaiety) is a limited company registered in Ireland and owned by Mr Dennis Desmond. It has interests in concert promotion (67 per cent of DF Concerts) festivals (67 per cent of T in the Park, 33 per cent of V festivals and 35 per cent of the Isle of Wight festival) and venues (12.5 per cent of the Academy Music Group). Its subsidiary, MCD Productions Limited, owns 24.3 per cent of Mean Fiddler. For the financial year ending 31 March 2004 Gaiety had a turnover of £14 million in the UK.

TRANSACTION

A joint venture company owned 50.1 per cent by Clear Channel and 49.9 per cent by Gaiety has been formed for the purpose of acquiring the entire issued share capital of Mean Fiddler.

The administrative deadline is 17 June 2005.

JURISDICTION

As a result of this transaction Mean Fiddler, Clear Channel and Gaiety will cease to be distinct. The parties overlap in the supply of popular music festivals ('festivals') and the share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met. The OFT therefore believes that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation.

THIRD PARTY VIEWS

With the exception of the vertical issue addressed above third parties generally raised no concerns about the merger.

ASSESSMENT

The parties overlap in the supply of touring and promotion services, live venues and festivals.

No concerns arise in relation to touring or promotion services, where the merger creates a small increment to a relatively low share and there remain several other large players. Similarly, on live venues the overlap is limited and the parties are not close competitors in the locations where they do overlap.

The parties exercise sole or joint control major festivals accounting for 45 per cent of festival revenue in 2004. The extent to which these festivals actually compete is not clear cut, with much evidence pointing to a limited overlap in practice due to differences in timing, location and artists. In addition, there is a wide variation in pricing which, the evidence suggests, is set by reference to upfront costs rather than in response to competitive pressure from other festivals. Nevertheless, irrespective of the degree to which the parties' festivals are substitutable for sufficient marginal consumers, the merged entity would face sufficient constraints from threatened or actual expansion or entry by its rivals to eliminate material competition concerns.

Furthermore, it is not considered plausible that the merged entity would be in a position to foreclose rival venues as a result of the increased vertical integration which results from this merger.    
 
Consequently, the OFT does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.

DECISION

This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.

Back to top