Diller Role in Live Nation Deal Draws Investor Ire

Live Nation Inc.’s largest shareholder may oppose the proposed merger with Ticketmaster Entertainment Inc. if Barry Diller has a leadership role in the new company.

“I’m very much against going into business with Mr. Diller” because of poor returns from companies he leads, said Sam Shapiro, chairman of Shapiro Capital Management. The investment firm owns a 15% stake in Live Nation, according to Bloomberg data.

Diller is chairman of Ticketmaster and would hold that title at the new company, to be called Live Nation Entertainment. If Diller accepts diminished authority, Shapiro said, he may support the deal.

He’ll wait to see regulatory filings with those details, he said, “because that will outline everyone’s role.”

The investor’s concerns are the latest obstacle to the proposed merger that was announced Tuesday and is under U.S. antitrust investigation. Shapiro’s comments prompted Live Nation Chief Executive Michael Rapino, who would be CEO of the new company, to organize a conference call defending the deal.

Through a spokesman, Diller, 67, declined to comment. Larry Solters, a spokesman for Ticketmaster, had no immediate comment.

West Hollywood-based Ticketmaster, the world’s largest ticketing company, began trading in August after Diller split IAC/InterActiveCorp into five independent companies. Before the separation, IAC shares declined 61% from a July 2003 high. Ticketmaster shares have fallen 79% since then, amid the general economic downturn.

Shapiro Capital Management owns 11.9 million shares of Beverly Hills-based Live Nation, according to Bloomberg data.

The combined company would control the world’s largest ticketing service and artist-management firm through Ticketmaster.

Live Nation is the largest concert promoter and venue operator.

Live Nation shares fell 32 cents, or 8.3%, to $3.53 on Friday. Ticketmaster shares fell 45 cents, or 9.1%, to $4.50.