The proposed merger between Live Nation and Ticketmaster has been approved by the Competition authorities in the US and the UK. This creates a giant in the entertainment industry, “Live Nation Entertainment”, with interests spanning ticketing, promotion, venue management, merchandising and artist management.
But there has been concern at the impact on ticket prices of having so much market power concentrated in one organisation – and dismay from other elements of the Live Event supply chain.
Artists such as Bruce Springsteen have spoken out against the “monopoly” being created. Managers, independent promoters and venues have voiced misgivings that Live Nation Entertainment will be able to dictate terms for the ticketing and/or staging of live events – which other members of the supply chain will have to live with, even if they are uneconomic.
This creates a danger that such parties will approach future negotiations with Live Nation Entertainment, expecting to lose – which tends to be a self-fulfilling attitude. But is this really the only possibility?
From a negotiating point of view it is true that market power is a key source of bargaining power, but it is only one such source. In their own operations and in any negotiation with the merged company other players in the Live Events supply chain can at least make sure they level the playing field by maximising their other sources of bargaining power.
For example, competitors might create some of their own market power by operating in niches of music that Live Nation cannot reach. Ticketmaster supplies 40-50% of tickets sold in the UK and Live Nation puts on between 10-20% of the live shows. With dominance like that, the chances are Live Nation will be too big to cover all market niches.
Regulatory power is a source of bargaining power too, and this runs against Live Nation. In the UK, it has already pledged to stand by a previous agreement with Ticketmaster’s German rival, Eventim, to sell a proportion of tickets for Live Nation’s British events; and in the US Ticketmaster will have to license its ticketing software to competitors. So, deal partners would do well to bear in mind that Live Nation Entertainment will need to ensure it does not give them any excuse to complain about it to the regulatory authorities for fear that it might fall foul of the watchful eyes of the regulator.
Positional power is a source of bargaining power too, so deal partners may have an opportunity to deploy negotiating figures who are more senior than their Live Nation counterparts in individual transactions.
Likewise, expertise is a source of bargaining power. In dealings with Live Nation, deal partners should make sure they have plenty of appropriate experts on their side to help them negotiate – for example, accountants, lawyers, market-sector experts – or even former Live Nation or Ticketmaster employees.
What’s more, there is some evidence that size or numbers gives you an advantage at the negotiating table. Proposed deal partners of Live Nation should always turn up in groups, and it may be that using larger individuals might be helpful provided that they know how to use their size effectively!
Tactical use of referral power can sometimes give you a little extra bargaining edge. If you have the ability to refer back to someone in greater authority for approval for a deal this gives you the ability to come back and ask for something more.
Finally, all negotiators always have their personal power in any negotiation – their understanding of negotiation process, attitude and behaviour – to help them equalise their bargaining position even when the aces are stacked against them. So, deal partners negotiating with Live Nation will need to maximise their personal negotiating skills.
Using all the bargaining power alternatives at their disposal means that deal partners working with Live Nation can approach the negotiation with confidence of getting a “win/win” outcome, rather than going in with a “lose/win” attitude. This may help them secure a more successful outcome in the face of Live Nation Entertainment’s market power – and, like David against Goliath, come away with more than they bargained for.
Live Nation and Ticketmaster merger approved ...
The proposed merger between Live Nation and Ticketmaster has been approved by the Competition authorities in the US and the UK. This creates a giant in the entertainment industry, “Live Nation Entertainment”, with interests spanning ticketing, promotion, venue management, merchandising and artist management.
But there has been concern at the impact on ticket prices of having so much market power concentrated in one organisation – and dismay from other elements of the Live Event supply chain.
Artists such as Bruce Springsteen have spoken out against the “monopoly” being created. Managers, independent promoters and venues have voiced misgivings that Live Nation Entertainment will be able to dictate terms for the ticketing and/or staging of live events – which other members of the supply chain will have to live with, even if they are uneconomic.
This creates a danger that such parties will approach future negotiations with Live Nation Entertainment, expecting to lose – which tends to be a self-fulfilling attitude. But is this really the only possibility?
From a negotiating point of view it is true that market power is a key source of bargaining power, but it is only one such source. In their own operations and in any negotiation with the merged company other players in the Live Events supply chain can at least make sure they level the playing field by maximising their other sources of bargaining power.
For example, competitors might create some of their own market power by operating in niches of music that Live Nation cannot reach. Ticketmaster supplies 40-50% of tickets sold in the UK and Live Nation puts on between 10-20% of the live shows. With dominance like that, the chances are Live Nation will be too big to cover all market niches.
Regulatory power is a source of bargaining power too, and this runs against Live Nation. In the UK, it has already pledged to stand by a previous agreement with Ticketmaster’s German rival, Eventim, to sell a proportion of tickets for Live Nation’s British events; and in the US Ticketmaster will have to license its ticketing software to competitors. So, deal partners would do well to bear in mind that Live Nation Entertainment will need to ensure it does not give them any excuse to complain about it to the regulatory authorities for fear that it might fall foul of the watchful eyes of the regulator.
Positional power is a source of bargaining power too, so deal partners may have an opportunity to deploy negotiating figures who are more senior than their Live Nation counterparts in individual transactions.
Likewise, expertise is a source of bargaining power. In dealings with Live Nation, deal partners should make sure they have plenty of appropriate experts on their side to help them negotiate – for example, accountants, lawyers, market-sector experts – or even former Live Nation or Ticketmaster employees.
What’s more, there is some evidence that size or numbers gives you an advantage at the negotiating table. Proposed deal partners of Live Nation should always turn up in groups, and it may be that using larger individuals might be helpful provided that they know how to use their size effectively!
Tactical use of referral power can sometimes give you a little extra bargaining edge. If you have the ability to refer back to someone in greater authority for approval for a deal this gives you the ability to come back and ask for something more.
Finally, all negotiators always have their personal power in any negotiation – their understanding of negotiation process, attitude and behaviour – to help them equalise their bargaining position even when the aces are stacked against them. So, deal partners negotiating with Live Nation will need to maximise their personal negotiating skills.
Using all the bargaining power alternatives at their disposal means that deal partners working with Live Nation can approach the negotiation with confidence of getting a “win/win” outcome, rather than going in with a “lose/win” attitude. This may help them secure a more successful outcome in the face of Live Nation Entertainment’s market power – and, like David against Goliath, come away with more than they bargained for.