For more crisp and insightful business and economic news, subscribe to The Daily Upside newsletter. It's completely free and we guarantee you'll learn something new every day.
How do you say "astronomical ticket fees" in Spanish?
Live Nation, America's largest concert promoter and the bane of music fans' wallets, said Monday it has reached an agreement to acquire Mexico's largest concert promoter OCESA Entretenimiento for $450 million. It's a sign that concerts are back, and good old price gouging, too.
Live Nation intended to acquire OCESA last year. Terms were agreed, Mexican regulators gave the go-ahead. But then the Covid-19 pandemic hit, the Biebers and the Beyonces of the world retreated to their palatial estates, and live touring was wiped out almost overnight.
Live Nation walked away from the deal and the global concert industry went on to lose $30 billion in 2020, according to Pollstar.
More than a year later, the deal is on again. Live Nation will receive a 51% stake in one of its biggest competitors and a dominant position in the Latin American market just as concerts return:
- After a terrible pandemic year for live music, Live Nation revenues grew $502 million, or 677%, to $576 million in the second quarter, up from $74 million in Q2 2020.
- The promoter of some of the world's most lucrative touring acts — including Coldplay, Paul McCartney, and U2 — OCESA gives Live Nation control over an average of 3,100 events with 6 million attendees in Mexico and Colombia every year. It also comes with subsidiary Ticketmaster Mexico, which sells 20 million tickets a year. (Live Nation already owns Ticketmaster in the US).
About Those Fees: The loser here might be fans. Live Nation has been accused by politicians, musicians, venue owners, and competitors of anticompetitive practices, notably charging exorbitant fees and demanding venues use its Ticketmaster subsidiary. In 2018, Ticketmaster was caught running its own secret scalper program to jack up prices.
Live Nation agreed to an undisclosed settlement with the Justice Department in 2019 over some violations but, earlier this year, House Democrats urged the department to launch a full probe into whether the company is an anti-competitive monopoly.