Friday, December 21, 2007

TicketMaster and Live Nation

In an interesting move things are moving forward with Live Nation controlling its ticketing and disolving the TicketMaster partnership according to this story in the Wall St. Journal today.

Live Nation to Drop TicketMaster for German Rival
December 21, 2007; Wall St. journal Page B5

Moving to take control of a key part of its business, concert-promotion
giant Live Nation Inc. said it plans to sell tickets to most of its
events with the help of Germany-based CTS Eventim AG when its agreement
with TicketMaster expires at the end of next year.

The announcement comes four months after TicketMaster said that it and
Live Nation had reached an impasse in talks to extend their 10-year

Details of the new arrangement have yet to be worked out, but its broad
strokes appear to offer Beverly Hills, Calif.-based Live Nation
important logistical and financial concessions it couldn't get from
TicketMaster. Under the new agreement, Live Nation's tickets are to be
sold primarily through, and Live Nation will have control
over customer data. Live Nation said it also plans to sell tickets to
events being staged by third parties -- positioning itself as a direct
competitor to TicketMaster. It also is likely to give up less money in
transaction fees than it does under its deal with TicketMaster, which
typically takes half the "convenience charge" assessed on each ticket sale.

"We will provide the infrastructure and technology required to reshape
how Live Nation consumers access ticket inventory." CTS Eventim Chief
Executive Officer Klaus-Peter Schulenberg said in a statement.

It is unclear whether service fees are to be levied on tickets sold
under the new Live Nation-CTS Eventim regime, and how any fees would be

Such issues were the main stumbling block in Live Nation's talks with
TicketMaster. Live Nation wanted to change the system so that people
attending the company's events would buy tickets primarily through, rather than through TicketMaster's Web site. Live Nation
also wanted to control data about customers' buying habits and other
information. TicketMaster didn't want to cede that control.

The development comes as Live Nation has been trying to reposition
itself as a player with broader ambitions than promoting concerts, which
is minimally profitable. It recently struck a 10-year, $120 million deal
to represent pop star Madonna in nearly every aspect of her professional
life, including sale of recorded music and licensing of her image.

Live Nation has said it plans to sign as many as three dozen other
artists to similarly wide-ranging contracts. It also has acquired
companies that run online fan clubs and manufacture and sell merchandise
such as T-shirts.

Selling tickets is an important piece of what Live Nation Chief
Executive Michael Rapino recently described as a three-year
transformation of his company, whose stock price has sunk since the
October announcement of the Madonna pact, amid broader market problems
and concerns the deal is overpriced. The shares rose 10 cents to $14.12
in 4 p.m. composite trading on the New York Stock Exchange.

Write to Ethan Smith at ethan.smith@wsj.com1

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