Posted by chicagomedia.org on February 10, 2009 at 13:49:33:
Live Nation, Ticketmaster Agree On Merger
February 10, 2009 | FMQB
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The boards of Live Nation and Ticketmaster have agreed to a merger deal that would create one company called Live Nation Entertainment. The merger would create a combined enterprise valued at $2.5 billion and Ticketmaster shareholders will receive 1.384 shares of Live Nation stock for each share of Ticketmaster they own, in what is billed as a tax-free, all-stock merger of equals. Shareholders in each company would own half of the equity in Live Nation Entertainment, and the two former rivals would each have seven representatives on a 14-person board.
If the merger becomes official, it would put under one roof some of the country's biggest concert venues, its dominant ticket sales company, the Front Line artist management division, and wide-ranging recording and promotion deals with artists such as Madonna, Shakira and Jay-Z. By eliminating duplication in their ticketing, marketing, data centers and back-office functions, the two companies expect to save $40 million a year. Such a deal will likely garner intense regulatory scrutiny over anti-trust concerns. However, the companies are poised to argue that consumers will benefit from the merger.
Live Nation CEO Michael Rapino said, "This combination will drive measurable benefits to consumers and accelerate the execution of our strategy to build a better artist-to-fan direct distribution platform. As every industry observer knows, too many tickets go unsold and too many fans are frustrated with their ticket-buying experiences. The current inefficiencies in the system result in higher costs and confusion over access to seats. Together, we will work to simplify the ticketing process and ultimately increase attendance at live events. This is also a logical step in the evolution of our business model, creating a more diversified company with a stronger financial profile that will drive improved shareholder value over the long term."
"It was less than two months ago that Ticketmaster ended its 10-year partnership with Live Nation, and I'm extremely glad we could reunite with this combination," added Ticketmaster Chairman Barry Diller. "No different from any other industry, the challenges are all around every aspect of live entertainment. Being able to put Live Nation and Ticketmaster into an equal partnership will allow the companies to get through this difficult period and be able to expand live entertainment options to audiences throughout the world."
Ticketmaster CEO Irving Azoff commented, "This merger, and the resources of these combined companies, will create a new dynamic and unique creative platform of choice for fans across all levels of the live entertainment experience. There is nothing more magical than the bond and the intimate relationship of fans to artists. It is truly an experience that needs to be embraced and nurtured with both integrity and respect. One of the mandates of the combined company will be to develop that bond to unsurpassed levels. Additionally, the Live Nation and Ticketmaster relationship will allow the live entertainment community and their respective venues to reach fans on unparalleled platforms."
In related news, Ticketmaster was hit with a $500 million lawsuit in Canada on Monday, alleging that the company broke the law by reselling tickets at inflated prices. A Toronto man who tried to buy two tickets to a November 2008 concert by Smashing Pumpkins alleges that Ticketmaster's website said none were available, but redirected him to the website of TicketsNow, the company's resale unit. The tickets had a face value of $66.50 each, but plaintiff Henry Krajewski ended up paying a total of $533.65 for the pair because he had to buy them through TicketsNow, according to Reuters. The suit, which seeks to be declared a class action, alleges that Ticketmaster violated an Ontario law against ticket scalping and says the court should order the company to pay damages equal to the amount of the overcharges.
Fans in the U.S. complained of similar issues recently when Bruce Springsteen tickets went onsale and fans were redirected from the Ticketmaster site to the TicketsNow site, where the seats were available at much higher prices. Springsteen then posted an angry letter to Ticketmaster on his website, prompting Azoff to issue a public apology. Azoff said the redirection "only occurred as a choice when we could not satisfy fans� specific search request for primary ticket inventory... While we were genuinely trying to do the right thing for fans in providing more choices when the tickets they requested from the primary on-sale were not available, we clearly missed the mark."