Hogan Lovells Plays key Role in Competition Commission Clearance of AEG's Wembley Deal
02 September 2013
LONDON, 2 September 2013 – Hogan Lovells has acted for AEG in obtaining phase 2 merger control clearance from the Competition Commission (CC) for AEG Facilities' acquisition of the contract to manage Wembley Arena. The CC provisionally cleared the deal in July and has since been seeking comments from interested parties. In its final report, published today, the CC has concluded that the merger would not result in a substantial lessening of competition for the provision of venue space to promoters, the provision of sponsorship opportunities or the provision of other event-related services.
AEG currently owns and/or operates arenas across the world, including The O2 Arena in London, and owns sports franchises and live entertainment production and promotion companies. The Wembley Arena deal was referred to the CC by the Office of Fair Trading (OFT) in March due to preliminary concerns that the merger might reduce competition between large indoor entertainment venues in London and might lead to higher costs for promoters and higher ticket prices. The CC has now found that the merger has not had and is not expected to have such an impact.
Competition partner Angus Coulter led the Hogan Lovells team representing AEG. He commented:
"This was a unique CC investigation and there were no previous similar acquisitions in the market to refer to by analogy. However, the CC found after a rigorous analysis that the merger would not lead to increased venue hire prices or ticket prices.
"The CC found that the choice of venue is usually made by a performer based on venue-specific factors such as capacity, availability, brand, reputation and personal preference rather than price. Putting the two venues together would therefore not lead to an increase in price.
"The CC also found that it would not be in AEG's interest to over-charge for the use of their London venues or to reduce the quality of the venues since doing so could damage AEG both in financial terms and also in relation to its reputation at its other venues.
"We are pleased to have helped AEG in bringing their experience and reputation as a successful operator of live entertainment venues to Wembley Arena."
The CC decision can be found here: www.competition-commission.org.uk/our-work/directory-of-all-inquiries/aeg-wembley-arena .