How much is Ticketmaster worth?

Ticketmaster is one of the largest ticket sales and distribution companies in the world. Founded in 1976, Ticketmaster sells tickets for concerts, sporting events, theater shows, and more. It operates in over 30 countries and sells tickets for clients across North America, Europe, Australia, and Asia. With its dominant position in the ticket sales industry, Ticketmaster processes over 500 million ticket transactions per year.

In this article, we’ll take a look at Ticketmaster’s business, revenue sources, competitors, and market valuation to answer the question – how much is Ticketmaster worth?

Ticketmaster’s Business Model

Ticketmaster operates primarily as an intermediary between event organizers and ticket buyers. Here is a quick overview of Ticketmaster’s business model:

• Ticketmaster signs exclusive contracts with venues and event organizers to sell tickets on their behalf. This could be for concerts, sports games, theater shows, etc.
• When customers want to buy tickets for an event, they go to Ticketmaster to purchase them instead of buying directly from the venue.
• For providing this service, Ticketmaster charges fees to both the event organizers and the ticket buyers.
• The fees charged to event organizers are negotiated in the contracts. This fee is typically a percentage of the ticket price.
• On the customer side, Ticketmaster charges per-ticket service charges, convenience fees, order processing fees and sometimes delivery fees.

This business model has made Ticketmaster an extremely profitable company by generating revenue from both sides of a ticket sale transaction. According to reports, Ticketmaster captures 25-30% of the full ticket price through its various fees charged to customers.

Ticketmaster’s Revenue Sources

Ticketmaster has two main revenue sources:

Service Charges from Customers

This includes the various fees charged to ticket buyers when they purchase tickets online or by phone. As mentioned earlier, Ticketmaster charges per ticket service charges, convenience fees, order processing fees and delivery fees on every ticket transaction.

These fees can add a significant amount on top of the ticket price. For popular events where tickets are in high demand, these fees alone can be over 20% of the base ticket price.

Commissions from Event Organizers

Ticketmaster also earns money through the commissions it charges event organizers and venues. These commissions are typically a percentage of the base ticket price and are negotiated in Ticketmaster’s contracts with venues/organizers.

The exact commission percentage can vary, but it’s usually within the 10-20% range for large venues and events. Ticketmaster also charges event clients various other fees for the ticketing services it provides.

Ticketmaster’s Operating Segments

Ticketmaster divides its business into two main operating segments:

Primary Ticketing

This segment involves Ticketmaster’s core ticketing operations – selling tickets online and by phone for events on behalf of its venue and event organizer clients. It generates revenue through fees charged to customers and commissions from organizers.

Secondary Ticketing

The secondary ticketing operations involve running ticket resale marketplaces, primarily Ticketmaster’s resale website TicketExchange. On TicketExchange, fans can resell event tickets they purchased earlier but can no longer attend. Ticketmaster charges commissions on every ticket resold through TicketExchange.

Ticketmaster’s Recent Financial Performance

Here are some key figures on Ticketmaster’s recent financial performance from its parent company Live Nation’s Q2 2022 earnings report:

• Revenue: $2.86 billion (+167% vs Q2 2019)
• Operating Income: $179 million
• Net Income: $187 million
• Ticketing Revenue: $456 million
• Ticketing Fee-Bearing GTV (Gross Transaction Value): $5.3 billion

The numbers show that Ticketmaster has rebounded strongly from the downturn during the pandemic, driven by the return of live events. Its ticketing fee-bearing GTV has already exceeded pre-pandemic levels.

Ticketmaster’s Main Competitors

Some of Ticketmaster’s major competitors in the event ticketing industry include:

• AXS – Owned by AEG, AXS sells tickets for major venues like Staples Center and O2 Arena. It has a growing U.S. market share.
• SeatGeek – An online ticket reseller that also provides primary ticketing services.
• Eventbrite – A self-service event ticketing platform popular with smaller/independent event organizers.
• Vivid Seats – A large ticket resale marketplace.
• StubHub – Owned by eBay, StubHub is one of the biggest ticket resale sites.

However, Ticketmaster still has a dominant overall market share in event ticketing sales. According to reports, Ticketmaster’s share of the primary ticketing market in North America is estimated to be 70-80%.

Ticketmaster’s Ownership Structure

Ticketmaster is a wholly owned subsidiary of Live Nation Entertainment (NYSE: LYV). Live Nation completed the acquisition of Ticketmaster in 2010 after receiving regulatory approval for the $2.5 billion all-stock deal.

Prior to the merger, Ticketmaster was a publicly traded company that first went public on the NASDAQ exchange in 1996 under the stock ticker TKTM.

The combined Live Nation-Ticketmaster entity operates as a vertically integrated music and events company spanning ticket sales, promotions, artist management, and venue operations.

Valuing Ticketmaster’s Business

Since Ticketmaster is now a wholly owned subsidiary of Live Nation, we cannot look at Ticketmaster’s market capitalization on its own to value its business. However, its estimated enterprise value within the Live Nation empire can provide a good approximate valuation.

According to valuation estimates, Ticketmaster’s enterprise value as of October 2022 is $15 billion. This values Ticketmaster at around 4.5x EV/LTM Revenues.

Here are some of the valuation assumptions behind the $15 billion estimated enterprise value:

• Live Nation has an overall enterprise value of around $33 billion currently.
• Ticketmaster makes up approximately 45-50% of Live Nation’s revenues and EBITDA.
• Applying that 45-50% ratio to Live Nation’s enterprise value gives Ticketmaster an estimated standalone valuation of $15 billion.

At $15 billion, that pegs Ticketmaster as one of the most valuable companies in the events services and ticketing industry globally. To provide some context, here is how Ticketmaster’s estimated $15 billion enterprise value stacks up against valuations of some of its key competitors:

Conclusion

Based on the valuation estimates, Ticketmaster is currently worth around $15 billion as part of Live Nation Entertainment. This valuation reflects Ticketmaster’s strong market leadership in the global events ticketing industry.

However, Ticketmaster faces increasing competition from tech-savvy ticketing rivals that could erode some of its market share over time. Its high ticket fees also remain acontentious issue with many consumers.

But despite those challenges, Ticketmaster still sells a vastly larger volume of tickets than any other ticketing company thanks to its broad network of exclusive venue and promoter partnerships.

Ticketmaster’s business continues to recover well from the pandemic downturn, as shown in its latest financial results. Its dominant position in ticketing bodes well for the company to maintain an enterprise value north of $10+ billion for the foreseeable future.