TV Appearance Has Ticket Vendor Sitting Pretty

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Investors liked what they heard last week from concert promoter and Ticketmaster parent company Live Nation Entertainment Inc. of Beverly Hills.

Live Nation Chief Executive Michael Rapino made an appearance on CNBC on Sept. 26 to discuss his company’s performance, and he took the opportunity to hype Ticketmaster’s new service, a competitor to the secondary ticket market operated by StubHub of San Francisco.

John Tinker, an analyst who follows Live Nation at Maxim Group in New York, said the cable TV appearance gave a wide audience insight into Live Nation’s growth story, helping the stock tick up 9 percent to close at $19.08 for the week ended Oct. 2, making it one of the biggest gainers on the LABJ Stock Index. (See page 28.)

“He did a good job of, in a succinct manner, explaining why they were well positioned,” Tinker said. “They’re going to be able to take on StubHub. That’s all very positive.”

Shares of Live Nation have risen 130 percent over the past year.

The new service, TM+, allows third parties, or, if you will, scalpers, to post tickets for sale for events that are sold out, even right next to available tickets listed at face value on the Ticketmaster site.

Ticketmaster will recoup fees from those secondary ticket transactions. This expands a revenue stream to Live Nation that had been previously dominated by StubHub. The service was reported in August.

The other reason the TV appearance was helpful, Tinker said, was in illustrating how Live Nation’s low-margin concert promotion business, which produces shows for artists such as Jay Z and Lady Gaga, is feeding the higher-margin ticketing and sponsorship businesses. For example, concert sponsors pay Live Nation for display of their name.

Also, Live Nation might get an indirect benefit from the Michael Jackson verdict. On Oct. 2, Live Nation’s largest competitor in the concert promotion business, AEG Live of downtown Los Angeles, was absolved in the performer’s death. AEG could have been made to pay as much as $1.5 billion in damages if found guilty.

That ruling, said Richard Tullo, an analyst who follows Live Nation at Albert Fried and Co. in New York, was favorable for the concert promotions business. He believes that promoters will be more careful in the future as a result of the suit but that the verdict will discourage future litigation.

“It’s a positive for the industry,” he said.

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