Ticketmaster expects to lose Live Nation pact

From Bloomberg News

Ticketmaster, the largest seller of U.S. sports and concert tickets, said it was likely to lose its contract with event promoter Live Nation Inc. after a year of negotiations. Live Nation shares surged.

“It is doubtful we will extend our agreement when it expires at the end of 2008,” Ticketmaster, a unit of Barry Diller’s IAC/InterActiveCorp, said in an internal memo to employees obtained Thursday by Bloomberg News. “They seem intent on a direction for their business that leaves us no viable way to work together.” IAC is based in New York.

Live Nation’s tickets account for 15% to 20% of Ticketmaster’s revenue, said Jeffrey Lindsay, a New York-based analyst at Sanford C. Bernstein & Co.


Live Nation, the world’s biggest event promoter, invested in its websites to increase sales directly to concertgoers, lessening its reliance on Ticketmaster.

“Live has been moving to be a stand-alone business and is keen to access any revenue growth it can,” Lindsay said.

“It was very unlikely they’d renew their agreement with Ticketmaster.”

IAC shares fell 28 cents to $27.19. Live Nation, based in Beverly Hills, rose 92 cents to $21.16.

“It’s a signal to Ticketmaster that there may be others to follow Live’s lead,” Lindsay said. “That could include sports teams.”

IAC said Ticketmaster’s second-quarter sales grew 3% from a year earlier after a 26% increase in the first quarter. U.S. sales declined 5% in the period.

The probable end of the Live Nation contract, when it expires, “frees us to focus energy and resources in other areas of the live entertainment business,” Ticketmaster said in the memo.


Live Nation has tried to boost revenue and profit margins by selling merchandise and services to music fans. Last year it acquired Trunk Ltd. and Musictoday. In the second quarter, Live Nation had an operating profit margin of 3.5% on sales of $1.04 billion.