Live Nation has found a way to pump its value — ticketing — after Wall Street reacted negatively last year to its plan to create “shared rights” deals with musical artists.
Live Nation’s Thursday announcement that it has inked the first significant client for its ticketing service drove its stock price up 6.5% to $16.90.
SMG, a venue management company with 75 arenas, nine stadiums, 52 performing arts centers and 66 convention centers under its purview, has inked a seven-year deal with Live Nation Ticketing that begins in late 2009.
Agreement gives Live Nation Ticketing the exclusive right to sell tickets at SMG’s venues as their current ticket agreements expire. Pact is expected to be completely in place by 2011. Among SMG’s venues are Soldier Field in Chicago and the Bill Graham Civic Auditorium in San Francisco.
The concert company’s ticketing service, which starts operating on Jan. 1, is expected to handle more than 10 million tickets for Live Nation venues alone. Live Nation anticipates that the SMG deal will eventually boost its ticket totals by 25%.
SMG manages a significant number of venues in secondary and tertiary cities that are crucial for touring artists, especially on the second and third legs of tours. It’s likely that the ticketing connection will give SMG venues a leg up when multiple promoters or venues are in competitive bidding for an act.
Live Nation stock has been rising since early July, soon after signing a similar deal with Nickelback and clarifying the management structure. After Live Nation announced that it had booked a deal with Madonna to handle her touring, merchandise and recordings for 10 years, the stock spiraled down from $23.36 on Oct. 10 to $9.62 on Jan. 23.
SMG president Wes Westley said in a statement that the alliance “will enhance our ability to drive content to our venues while combining technology and distribution to help our clients maximize attendance and build their business.”
Live Nation has touted its ticketing service as a crucial link between its concert promoters and the fans, opting not to renew its contract with Ticketmaster, which expires at the end of the year.