Business | Economy
Job losses mean less cash to blow on song and dance
Ticketmaster Entertainment, the world's largest ticketing company, expects the recession to reduce prices for live entertainment in 2009, CEO Sean Moriarty said.
- Bloomberg
- Published: 23:38 January 7, 2009
San Francisco: Ticketmaster Entertainment, the world's largest ticketing company, expects the recession to reduce prices for live entertainment in 2009, CEO Sean Moriarty said.
"You would expect there to be some adjustment of pricing for an economy where people have less money in their pocket," Moriarty, 38, said in an interview.
The slowdown comes as Ticketmaster begins to compete with Live Nation, once its largest customer. Live Nation, which stages more than 16,000 concerts a year and has exclusive deals with Madonna and U2, has begun using its own ticket system.
The promoter accounted for 17 per cent of Ticketmaster's 2007 sales.
Ticketmaster, based in West Hollywood, California, began to feel the slump around August, just when it was spun off from IAC/InterActiveCorp, Barry Diller's Internet company, Moriarty said.
"The conditions that I would expect in 2009 are going to feel like the conditions in the back half of 2008," Moriarty said.
The challenges of being a newly independent company and general economic conditions have contributed to a 70 per cent drop in the stock since it came public, in addition to the loss of Live Nation, said Moriarty, who speaks today at a Citigroup Inc investor conference in Phoenix.
Ticketmaster had more than a year to prepare for the loss of Live Nation contracts, which began expiring at the end of 2008.
"The loss of Live Nation and the emergence of them as a competitor certainly introduces some risk and some concern" for investors, Moriarty said.
Another Ticketmaster customer, SMG, a manager of 216 facilities in the US, including arenas and stadiums, signed an exclusive agreement in September with Live Nation, which also operates the House of Blues venues.
In its first report as a public company, Ticketmaster's net income fell 76 percent to $9.62 million, or 17 cents a share, on higher marketing and interest costs. Sales in the third quarter rose 16 per cent to $339.2 million on acquisitions and more cash per ticket.
To make up for the lost Live Nation revenue, Ticketmaster in October expanded into artist management, buying a controlling stake in Front Line Management Group, which represents about 200 artists, including the Eagles, Jimmy Buffett and Aerosmith.
The company is also getting sales from the $265 million January 2008 purchase of TicketsNow, the second-largest online reseller behind EBay's StubHub. The resale market may feel the pinch of falling prices most, Moriarty said.
"We've substantially replaced the revenue that Live Nation represented to our business, and the challenge for us is driving comparable profitability for that new revenue," Moriarty said.
With Live Nation and Ticketmaster each having exclusive relationships with artists and controlling some venues, the company may not handle ticketing entirely for its acts.
"If the best thing for a particular artist is to play a building or buildings that don't happen to be Ticketmaster buildings, it's perfectly appropriate that we do what's best for the artists because they are a client," Moriarty said.
Ticketmaster gained 16 cents to $7.06 on Tuesday on the Nasdaq market.
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