Live Nation posts 4th-quarter results showing losses shrink; Ticketmaster operating profit
Higher ticket fees and the lack of large impairment charges helped fourth-quarter losses abate at concert and ticketing powerhouse Live Nation Entertainment.
The company reported results for the first time Thursday after the merger of concert promoter Live Nation and ticketing company Ticketmaster Entertainment last month.
Live Nation is now the most powerful force in the live music business, with an artist roster that includes U2, Madonna, Jay-Z and the Eagles. Its operations span more than 30 countries. The companies have said music fans will benefit through lower ticket prices because the merged company can earn money in ways that separate companies could not.
Investors are focused more on how the new company plans to grow its business than on the quarterly results.
Conditions imposed by the Justice Department as part of the merger’s approval will crimp the growth of the combined concert and ticketing company this year, with adjusted operating profits seen flat to down in 2010.
Among other things, regulators required Ticketmaster to license its ticketing software to a competitor and sell a subsidiary that handles tens of millions of tickets a year. Consumer groups, ticket resellers and some politicians had expressed concerns that the combined company would control too much of the concert experience.
The conditions will cost $20 million this year.
That, plus $15 million restructuring costs and other expenses this year will more than offset the $40 million in synergies the companies hoped to achieve by combining.
Irving Azoff, Live Nation’s executive chairman, said the headwinds are temporary.
“We would not have agreed to conditions that would have severely hampered what we could do in the future,” Azoff told analysts.
Paperless ticketing, dynamic pricing where consumers can pick the seat they want on an interactive map, and selling music and merchandise with tickets will boost sales going forward, he said.
“Right now everything revolves around the ticket, but yet we’re selling nothing along with the ticket,” he said. “You should look at a lot of new business opportunities from us.”
The company reported its two units separately.
Live Nation’s revenues fell 5 percent to $854 million, due to lower attendance at concerts in North America, partly offset by the opening of the O2 arena in Dublin. Its operating losses shrank to $64 million from $323 million.
Ticketmaster’s revenue grew 7 percent to $409 million, mainly helped by growth in its Front Line artist management business. It turned a $35 million operating profit, reversing a loss of $1.07 billion.
Shares of Live Nation Entertainment Inc. fell 8 cents to $12.50 in extended trading after the release of results. Earlier Thursday, the stock closed up 7 cents at $12.58.