OT: TicketMaster aquires Azoff's Front Line Mgt
Posted: Fri Oct 24, 2008 6:24 ami wonder how this will affect the industry & the fans.
http://online.wsj.com/article/SB1224730 ... lenews_wsj
Ticketmaster Inc. has reached an agreement to acquire what is widely regarded as the music world's most powerful artist-management company and install the management company's boss at the helm of the combined company, a bid to find a new business model for an industry undergoing seismic shifts.
The complex transaction would combine the world's largest ticketing company with its most influential gatekeeper for talent. Irving Azoff and his company, Front Line Management Inc., handle the affairs of scores of the world's biggest singers and musicians, including Christina Aguilera, the Eagles, Jimmy Buffett and Neil Diamond. Ticketmaster could use a close affiliation with such artists to persuade concert venues to continue using its ticketing services.
The combination stands to give Ticketmaster new leverage in a battle for supremacy in the concert business with Live Nation Inc. Until recently, Live Nation was a concert promoter whose sole business involved staging live events. In the past year, however, it has announced plans to start a ticketing service to compete with Ticketmaster. And it has begun signing artists such as Jay-Z and Madonna to lucrative long-term deals in which Live Nation will oversee a wide array of the acts' business interests, including touring, ticketing, merchandising and, in some cases, recording.
Ticketmaster is now trying to outmaneuver its rival. Under the terms of a deal announced Thursday, Ticketmaster expects to acquire a majority interest in Front Line, creating an entity called Ticketmaster Entertainment Inc. Mr. Azoff is to be named chief executive of the new entity. Ticketmaster's current management, led by Chief Executive Sean Moriarty, is to report to Mr. Azoff, who is also to continue overseeing Front Line.
Placing a talent manager in charge of the dominant ticketing system raises the potential for various conflict-of-interest issues. Mr. Azoff, in particular, is known for using the leverage his stable of artists provides to procure favorable terms in an array of deals.
Mr. Azoff said he wouldn't attempt to use the combined resources of the new company to give his clients an advantage in the market for concertgoers' dollars. "All artists will benefit," he said, "whether they're Front Line artists or not."
Ticketmaster already owns a minority interest in Front Line, a stake it inherited from Ticketmaster's former parent, IAC/InterActiveCorp, from which Ticketmaster was spun off in August. To attain a majority in Front Line, Ticketmaster is to pay about $123 million to Warner Music Group Corp. for the roughly 30% stake that Warner has owned since last year.
In an interview, Barry Diller, chief executive of IAC and chairman of Ticketmaster, said: "Ticketmaster is obviously going to expand in the things that it does, in the areas that it provides services, and having it led by the force that is Irving Azoff gives Ticketmaster a really good chance to continue to be successful."
Mr. Azoff is expected to trade an unspecified portion of his Front Line holding for about 4.5% of Ticketmaster's total shares, a stake worth at least $35 million that would make Mr. Azoff one of Ticketmaster's largest shareholders. Mr. Azoff is to retain a "sizable" minority interest in Front Line, Ticketmaster said.
The deal highlights the degree to which the live-entertainment business, like the record industry before it, is consolidating as it faces challenges brought on by the Internet and, more recently, the economic downturn.
Ticketmaster for decades maintained a near-monopoly on sales of tickets to major concert and sporting events, allowing it to dictate terms. That has sometimes alienated fans, the most vocal of whom have complained about the service charges that are tacked on to the face value of tickets.
The game has changed dramatically in recent years, however, with the rise of a new secondary ticketing market -- anchored by companies such as eBay Inc.'s StubHub -- that has enabled easy buying and reselling of tickets that are often originally purchased through Ticketmaster. The new market has forced Ticketmaster to play catch-up by building its own resale service.
The announcement of Live Nation's ticketing service posed a new challenge. Live Nation -- at this point Ticketmaster's largest client, generating 17% of Ticketmaster's $1.2 billion in revenue last year -- plans to issue its own tickets for the venues it owns and has poached arenas and stadiums that had been longtime Ticketmaster clients. In so doing, Live Nation has touted its direct relationships with artists, whose concerts it promotes and books.
Close new relationships between Ticketmaster and more than 100 of the biggest names in live entertainment could pose a challenge to Live Nation's nascent ticketing business.
By joining forces with Mr. Azoff and his numerous high-profile clients, Ticketmaster is trying to trump its rival. As one person close to the deal put it, "We'll see your Jay-Z and raise you Jimmy Buffett."
Certain aspects of the deal between Ticketmaster and Front Line needed the blessing of Cablevision Systems Corp., which owns 10% of Front Line. An objection from that front was never likely, however. Cablevision CEO James Dolan moonlights as a guitarist in a blues band called JD & the Straight Shot -- managed by Mr. Azoff.
Write to Ethan Smith at ethan.smith@wsj.com
http://online.wsj.com/article/SB1224730 ... lenews_wsj
Ticketmaster Inc. has reached an agreement to acquire what is widely regarded as the music world's most powerful artist-management company and install the management company's boss at the helm of the combined company, a bid to find a new business model for an industry undergoing seismic shifts.
The complex transaction would combine the world's largest ticketing company with its most influential gatekeeper for talent. Irving Azoff and his company, Front Line Management Inc., handle the affairs of scores of the world's biggest singers and musicians, including Christina Aguilera, the Eagles, Jimmy Buffett and Neil Diamond. Ticketmaster could use a close affiliation with such artists to persuade concert venues to continue using its ticketing services.
The combination stands to give Ticketmaster new leverage in a battle for supremacy in the concert business with Live Nation Inc. Until recently, Live Nation was a concert promoter whose sole business involved staging live events. In the past year, however, it has announced plans to start a ticketing service to compete with Ticketmaster. And it has begun signing artists such as Jay-Z and Madonna to lucrative long-term deals in which Live Nation will oversee a wide array of the acts' business interests, including touring, ticketing, merchandising and, in some cases, recording.
Ticketmaster is now trying to outmaneuver its rival. Under the terms of a deal announced Thursday, Ticketmaster expects to acquire a majority interest in Front Line, creating an entity called Ticketmaster Entertainment Inc. Mr. Azoff is to be named chief executive of the new entity. Ticketmaster's current management, led by Chief Executive Sean Moriarty, is to report to Mr. Azoff, who is also to continue overseeing Front Line.
Placing a talent manager in charge of the dominant ticketing system raises the potential for various conflict-of-interest issues. Mr. Azoff, in particular, is known for using the leverage his stable of artists provides to procure favorable terms in an array of deals.
Mr. Azoff said he wouldn't attempt to use the combined resources of the new company to give his clients an advantage in the market for concertgoers' dollars. "All artists will benefit," he said, "whether they're Front Line artists or not."
Ticketmaster already owns a minority interest in Front Line, a stake it inherited from Ticketmaster's former parent, IAC/InterActiveCorp, from which Ticketmaster was spun off in August. To attain a majority in Front Line, Ticketmaster is to pay about $123 million to Warner Music Group Corp. for the roughly 30% stake that Warner has owned since last year.
In an interview, Barry Diller, chief executive of IAC and chairman of Ticketmaster, said: "Ticketmaster is obviously going to expand in the things that it does, in the areas that it provides services, and having it led by the force that is Irving Azoff gives Ticketmaster a really good chance to continue to be successful."
Mr. Azoff is expected to trade an unspecified portion of his Front Line holding for about 4.5% of Ticketmaster's total shares, a stake worth at least $35 million that would make Mr. Azoff one of Ticketmaster's largest shareholders. Mr. Azoff is to retain a "sizable" minority interest in Front Line, Ticketmaster said.
The deal highlights the degree to which the live-entertainment business, like the record industry before it, is consolidating as it faces challenges brought on by the Internet and, more recently, the economic downturn.
Ticketmaster for decades maintained a near-monopoly on sales of tickets to major concert and sporting events, allowing it to dictate terms. That has sometimes alienated fans, the most vocal of whom have complained about the service charges that are tacked on to the face value of tickets.
The game has changed dramatically in recent years, however, with the rise of a new secondary ticketing market -- anchored by companies such as eBay Inc.'s StubHub -- that has enabled easy buying and reselling of tickets that are often originally purchased through Ticketmaster. The new market has forced Ticketmaster to play catch-up by building its own resale service.
The announcement of Live Nation's ticketing service posed a new challenge. Live Nation -- at this point Ticketmaster's largest client, generating 17% of Ticketmaster's $1.2 billion in revenue last year -- plans to issue its own tickets for the venues it owns and has poached arenas and stadiums that had been longtime Ticketmaster clients. In so doing, Live Nation has touted its direct relationships with artists, whose concerts it promotes and books.
Close new relationships between Ticketmaster and more than 100 of the biggest names in live entertainment could pose a challenge to Live Nation's nascent ticketing business.
By joining forces with Mr. Azoff and his numerous high-profile clients, Ticketmaster is trying to trump its rival. As one person close to the deal put it, "We'll see your Jay-Z and raise you Jimmy Buffett."
Certain aspects of the deal between Ticketmaster and Front Line needed the blessing of Cablevision Systems Corp., which owns 10% of Front Line. An objection from that front was never likely, however. Cablevision CEO James Dolan moonlights as a guitarist in a blues band called JD & the Straight Shot -- managed by Mr. Azoff.
Write to Ethan Smith at ethan.smith@wsj.com
