New unit to be called Live Nation Entertainment
Concert promoter Live Nation and ticketing giant Ticketmaster Entertainment confirmed their merger plans Tuesday and got right to work addressing antitrust concerns that have taken centerstage.
Ticketmaster chairman Barry Diller, who would be chair of the new company — to be called Live Nation Entertainment — sought to dispel the notion that the deal would lead to higher ticket prices.
“Ticketmaster does not set prices. Live Nation does not set ticket prices. Artists set the prices,” he said, without mentioning the ticket surcharges Ticketmaster relies on for much of its revenue.
Under the deal announced Tuesday, Ticketmaster shareholders would receive 1.384 shares of Live Nation stock for each share of Ticketmaster they hold. Ticketmaster shareholders would hold 50.01% of the new company, while Live Nation shareholders would have 49.99%. Live Nation chief exec Michael Rapino would be the company’s CEO.
The companies estimated the value of the combined business at $2.5 billion and said the deal would help them save about $40 million annually. Assuming the deal receives approval from antitrust authorities, the companies hope to complete the merger in the second half of the year.
Live Nation and Ticketmaster argue that together they could better withstand the recession, sell more tickets and improve service to fans by bringing together their expertise in promotions and ticketing.
However, the merger comes just as Ticketmaster is under fire for recently redirecting people buying tickets to a Bruce Springsteen show from its regular website to its reselling subsidiary, TicketsNow. That site had more expensive seats above face value, even though face-value tickets were still available. New Jersey’s attorney general launched an investigation, and a class-action lawsuit in Ontario claims Ticketmaster made a similar up-selling move in November for a Smashing Pumpkins concert.
Diller blamed the Springsteen incident on a “technical glitch” by a credit card company and said the Canadian lawsuit was “without merit.”
Analysts believe the Ticketmaster-Live Nation combination could lower some ticket prices because the two companies could present a united front to artists when negotiating business deals surrounding tours. The companies are also seeking to fill more venue seats that are going empty.
Ticketmaster sells tickets for more than 80% of the major arenas and stadiums in the U.S., according to concert tracking firm Pollstar. Live Nation is the world’s No. 1 concert promoter and owns more than 140 venues. It has comprehensive rights deals covering the tours of such artists as Madonna, Jay-Z, U2 and Shakira.
In January, Live Nation launched its own ticketing service. That brought it and Ticketmaster closer to an all-out scramble for ticketing deals.
Diller said Tuesday the tough economy has increased the urgency to put the companies together.
Ticketmaster CEO Irving Azoff, who would be executive chairman of the new company, told analysts on a conference call that other artist promoters would be given a fair shake in dealing with the new entity.
“We think that it will be a more level playing field, and there’s no real barrier of entry for anybody to expand their promotion areas,” said Azoff, the longtime manager of the Eagles. “The goal of this company is going to be to get more artists to work and fill more venues and fill more seats.”
Live Nation shares closed down 8.9% to $4.82 Tuesday, while Ticketmaster shares dipped 6.4% to $6.15.
— Associated Press