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Live Nation settles class-action lawsuit over fees, reduces earnings estimate

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Live Nation Entertainment, the Beverly Hills events promoter, on Wednesday said it had settled a class-action lawsuit over fees charged by its subsidiary, Ticketmaster.

The lawsuit, originally filed by two individual plaintiffs in Los Angeles Superior Court in 2003 and granted class-action status in September, accused Ticketmaster of misleading customers when it tacked on $14.50 to $25 in delivery fees. The suit alleged that Ticketmaster suggested that the fees simply covered the cost of delivering the tickets, but were in fact designed to boost the company’s profit.

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Live Nation, which merged last year with Ticketmaster to create an entertainment powerhouse, agreed to settle the lawsuit in December, setting aside $22.3 million to pay for legal fees and issue refunds to affected customers. It reduced its expected fourth-quarter earnings by the same amount, plus $4.9 million to ‘restructure its North American concerts business,’ according to a report filed Wednesday with the U.S. Securities and Exchange Commission.

As a result, Live Nation said it expects its fourth-quarter operating income to be $362 million, down from its previous estimate of $389 million. The company is expected to report its earnings Feb. 28.

The company, which is suing its insurance carrier for not covering more than $4 million in legal expenses incurred in the case, admitted no wrongdoing, but said Ticketmaster would ‘make certain changes to disclosures on its website.’

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-- Alex Pham

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