ETM Entertainment Going Public for Expansion

ETM Entertainment Network Inc., which produces automated ticket sales systems for concerts and sporting events, is planning to offer stock to the public for the first time.

The company, which attracted attention last summer when the popular rock band Pearl Jam began using ETM’s high-tech system to sell tickets as part of an ill-fated boycott of industry giant Ticketmaster Corp., is hoping to offer 2.5 million shares at an initial price of $10 per share.

ETM said it plans to use proceeds from the $25-million offering to complete the development of its automated ticket sales system, including computerized kiosks, according to a registration statement filed with the federal Securities and Exchange Commission.

“You need several million dollars to bring a ticket sales operation into place,” said Peter Schniedermeier, ETM co-founder and senior vice president. “We decided to go to the public to get it.”

The company’s registration statement acknowledges, however, that ETM could face an uphill battle in a field dominated by much larger companies, including Ticketmaster, which hold exclusive rights to many major concert and sports venues.

ETM, which was established in April 1994, lost nearly $4.4 million through the end of 1995, while generating revenue of $473,000, according to the SEC filing. The lack of revenue and other factors prompted the company’s outside accountants to question whether ETM could continue as a going concern, the SEC statement noted.

Currently, ETM has one client, the Palm Springs Suns, a triple-A baseball team. But ETM is in negotiations to line up other contracts, spokesman Steven R. Seiler said.

Schniedermeier said his company received thousands of letters supporting the new ticket sales system last year after Pearl Jam, the Seattle-based grunge rock band, hired ETM to sell concert tickets exclusively after the band got into a bitter dispute with Ticketmaster.

“We decided to go after the public after the Pearl Jam brouhaha,” Schniedermeier said.

“People want selection,” he added. “Would you want one box of cereal?”

Pearl Jam eventually abandoned its boycott of Ticketmaster after the band found it difficult to line up adequate venues not affiliated with Ticketmaster, the nation’s largest ticketing agency. The reconciliation left ETM without its only major client.

“They certainly have the lion’s share of the marketplace,” Schniedermeier said of Ticketmaster.

Under the new system, which Schniedermeier hopes to have operating by Aug. 1, patrons can order tickets by dialing an 800 number and reserve seats by credit card or by sending a check or money order to ETM, which will then send tickets to homes by mail.

The company also plans to place kiosks at locations throughout Southern California where fans can purchase tickets through an ATM-type machine. The firm’s shares will be traded on the Nasdaq market.