CTS Eventim

Live Nation, the main competitor of CTS Eventim, was found guilty by a federal jury of illegally monopolising the live-event ticketing market in the US.

According to the plaintiff, Live Nation would control 86% of the primary ticketing market for live events in the US, a level made possible by its famous flywheel strategy, which controls the entire value chain, from venues to ticketing, passing through artist promotions.

This is clear positive news for CTS Eventim in the short term, which is still a challenger on this market and is now a focus for the group, as Live Nation could be broken up following this judgment. Over the long term, though, it questions the strategy of CTS Eventim of replicating this strategy by investing in venues, although the focus is on Europe for now; this judgment could increase scrutiny on a global scale, in our opinion.

Overall, we still expect a slight positive reaction for CTS Eventim this morning, which has been overly suffering from fears of lower returns on capital linked to its investment in venues, although this vertical integration strategy could improve and protect its competitive positioning, underpinning our positive recommendation.

Expert Opinion:
Following the massive drop in CTS Eventim, we see significant upside in the name. A more significant presence in the U (now a definite possibility) would be a plus for the share price. Still a BUY in my book. 

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