In 2009, Ticketmaster and Live Nation merged to become the world’s largest live entertainment company. This merger combined the largest ticketing company, Ticketmaster, with the largest concert promoter, Live Nation. The merger has had a significant impact on the live entertainment industry, despite initial concerns from regulators and consumers.
The Companies Before the Merger
Before the merger, Ticketmaster and Live Nation were the two dominant players in different aspects of the live entertainment business.
Ticketmaster
Ticketmaster was founded in 1976 as a ticket distribution service based in Phoenix, Arizona. It initially focused on selling tickets to events in Arizona but soon expanded nationally in the US. By 2008, Ticketmaster sold over 141 million tickets per year and grossed $1.2 billion in revenue. It operated in 20 global markets and controlled a large majority of primary ticketing services.
Ticketmaster’s leading position was strengthened in the 1990s when it purchased several of its major competitors like Ticketron. This left Ticketmaster with very few direct competitors in primary ticket sales. It’s online ticketing service, ticketmaster.com, was also a market leader making it convenient for consumers to purchase tickets.
Live Nation
Live Nation was formed in 2005 after Clear Channel Communications spun off its live entertainment division as a separate publicly traded company. Live Nation promoted, operated, and managed events for over 2500 artists around the world. In 2008, Live Nation sold 51 million tickets and generated $4.1 billion in revenue.
Live Nation owned, operated, or had exclusive booking rights at around 175 venues globally. These included famous venues like House of Blues and Fillmore chains. Live Nation also owned production companies and had contracts with many high profile musicians for tour promotion. This allowed Live Nation to consolidate more of the live music process under one roof.
Why Did the Two Companies Merge?
By merging together, Ticketmaster and Live Nation hoped to create synergies and cost savings between their complementary businesses.
Goals of the Merger
The combined company aimed to provide a streamlined vertically integrated service. Specific benefits touted by the merged company included:
- Lower costs by sharing ticketing platforms, venues, and other infrastructure.
- Offer bundled ticketing and concert promotion services to teams, venues, and bands.
- Use data to better cross-promote events and target marketing efforts.
- Expand internationally by leveraging their combined networks.
- Compete against other entertainment options like professional sports teams.
Benefits to Each Company
The merger also offered specific advantages to each company:
Ticketmaster Benefits
- Gain exclusive ticketing rights at Live Nation owned or operated venues.
- Sell more tickets as Live Nation funnels fans to Ticketmaster platforms.
- Share Live Nation’s artist relationships and data.
Live Nation Benefits
- Avoid paying Ticketmaster high service fees on tickets sold.
- Use Ticketmaster’s technology to grow online ticket sales.
- Access Ticketmaster’s client list to earn new promotion business.
Details of the Merger
Ticketmaster and Live Nation formally announced their merger intentions in February 2009. However, approval of the merger took around a year due to antitrust concerns. Some important dates and details:
- February 2009 – Merger deal announced valuing the combined company at $2.5 billion.
- January 2010 – DOJ (Department of Justice) approves merger with certain conditions to address competitive concerns.
- January 2010 – Merger deal amended to address DOJ requirements including:
- 10 year agreement preventing Ticketmaster from punishing venues that don’t renew contracts.
- Distributing tickets for competitors AEG and Comcast-Spectator.
- Licensing ticketing tech to Anschutz Entertainment Group (AEG).
- January 2010 – Live Nation and Ticketmaster officially merge and trades as LYV.
- October 2010 – Michael Rapino appointed CEO of the new Live Nation Entertainment company.
- June 2010 – UK regulators approve merger after Live Nation sells secondary ticketing companies.
Ownership Structure
The merged company Live Nation Entertainment trades on the New York Stock Exchange under the symbol LYV. Key ownership details:
- Merged entity valued around $2.5 billion.
- Former Live Nation shareholders got about 50.01% ownership of LYV.
- Former Ticketmaster shareholders got 49.99% ownership of LYV.
- Both companies contributed cash to pay down the other’s debt.
Key People Involved in the Merger
There were a few key executives that were instrumental in orchestrating the Live Nation / Ticketmaster merger.
Michael Rapino
Michael Rapino was the CEO of Live Nation before the merger. He successfully convinced Ticketmaster CEO Sean Moriarty to merge with Live Nation. Moriarty resigned shortly after the merger was announced. Rapino was then appointed CEO of the new Live Nation Entertainment company in 2010. He remains CEO today guiding the combined company’s strategy.
Irving Azoff
Irving Azoff was the Executive Chairman of the Board at Ticketmaster and had a long career in artist management. He helped broker the merger with Live Nation where he took on the role of Executive Chairman of the Board of Live Nation Entertainment. He led integration efforts between the two companies before stepping down in 2013.
Sean Moriarty
Sean Moriarty was CEO of Ticketmaster before the merger after taking over from predecessor John Pleasants. Moriarty worked with Irving Azoff to negotiate the merger with Live Nation. Once the merger was announced, he resigned his CEO position feeling the company now needed new leadership.
Effects of the Merger
The Live Nation / Ticketmaster merger significantly impacted the live music and entertainment industries.
Government Reactions
The merger prompted scrutiny from government regulators in the US and Europe concerned about impacts to competition. Lawmakers did not block the merger but did impose certain conditions to get approval.
- US Department of Justice (DOJ) got a 10 year agreement governing Ticketmaster’s contracts with venues.
- UK regulators forced Live Nation to sell secondary ticketing companies.
- Some US and Canadian lawmakers called for investigations into potential antitrust issues.
Venues and Event Promoters
Venues and event promoters now had fewer options for ticketing services after Ticketmaster and Live Nation combined.
- Independent venues were concerned about pressure to use Ticketmaster instead of competitors.
- Some locked into long-term Ticketmaster contracts were unhappy.
- AEG, the 2nd largest promoter, got a DOJ mandated deal to license Ticketmaster’s software.
Artists
The merger gave Live Nation Entertainment stronger relationships with more artists and bands:
- Live Nation could now bundle event promotion, venues, ticketing, merchandise, etc.
- Provided artists with more options for live shows and fan marketing.
- Some artists worried about negotiating leverage with the combined company.
Consumers
Fan groups and consumers were concerned about potential impacts from the lack of ticketing competition:
- Monopoly fears around pricing, fees, and services.
- Restricted access to tickets due to exclusive contracts.
- Loss of choice for primary and secondary ticket services.
Financial Performance
The merged Live Nation Entertainment has seen strong growth despite early challenges from the recession:
- Generated $24 billion in revenue and $6 billion gross profit over the past decade.
- Total shareholder return of 250%+ since January 2010 IPO.
- Operating income improved from a $203 million loss in 2010 to $306 million profit in 2018.
- Stock price declined initially but now trades at 4x the initial $12 IPO price.
Conclusion
The Live Nation and Ticketmaster merger combined the world’s top concert promoter with the leading event ticketing company. This consolidation initially raised significant competitive concerns but ultimately created a stronger vertically integrated company in the live entertainment space. Despite early challenges, the merger proved successful in building Live Nation Entertainment into a live event giant reporting strong growth and profits.
