Thursday, August 23, 2007

Concert Business Threatened Soon?

Ticketmaster Halts Live Nation Talks

August 23, 2007; Page B3 (WSJ)

A long-simmering feud over one of the music industry's last remaining reliable revenue sources boiled over yesterday, as Ticketmaster, the nation's dominant ticket seller, halted talks to reach a new long-term agreement with the biggest concert promoter, Live Nation Inc.

The situation threatens to create an acrimonious war over who will sell tickets for a big portion of the U.S. live-entertainment industry. A memo circulated within IAC/InterActiveCorp's Ticketmaster, which controls the ticket inventory to nearly all major concert and sporting events in the U.S., said the ticketing company no longer expects to renew its agreements to sell seats for events at buildings owned by Live Nation, its largest client. Events at venues owned by Live Nation and its House of Blues subsidiary generated 17% of Ticketmaster's roughly $1 billion revenue last year.

Talks between the two sides have grown acrimonious during the past year and a half, according to people close to the situation. Live Nation Chief Executive Michael Rapino has threatened to start his own ticketing operation rather than renew with Ticketmaster. The concert-promotion business has notoriously thin margins; Live Nation reported net income of $9.9 million for the quarter that ended June 30, on revenue of $1.04 billion; it lost money in 2005 and 2006. Having its own ticketing could be seen as a way to increase profitability. Live Nation didn't respond to a request for comment.