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Live Nation Entertainment to switch ticketing from CTS Eventim to Ticketmaster
Disappointed by the way the operation has progressed over the past year, Live Nation Entertainment announced Thursday that it was dropping CTS Eventim for ticketing in North America and replacing it with Ticketmaster, which Live Nation merged with last month.
Michael Rapino, president and CEO of Live Nation Entertainment, made the announcement during a conference call to announce the company's fourth quarter and year-end results, but he did not offer specific examples of the failings of the Eventim ticketing system. Before Live Nation announced its plan to merge with Ticketmaster in early 2009, the company launched its own ticketing operation which was built by Eventim, the German company that is the leading primary ticketer in Europe.
"We haven't been satisfied or thrilled by the results," Rapino said of the Eventim operation, adding that Ticketmaster offers "a superior system." Live Nation had been Ticketmaster's largest client before announcing its intention to create its own ticketing infrastructure.
Soon after the launch of its ticketing system, Live Nation experienced a major headache with it when the system froze during onsales for Phish tickets, and in the UK where Eventim is also working with Live Nation for ticketing, there have been "a number of operational issues" with that system, but Rapino declined to elaborate.
Dropping Eventim from North American ticketing is within Live Nation's rights per its contract, Rapino said, and the company will continue to pay Eventim's fees. The move will not affect the two companies' relationship in the UK, and Rapino would not rule out working with Eventim again when Live Nation tries to expand into Japan, Australia and even Germany in the coming years. The move into Germany, Eventim's backyard, will occur "with or without" the European ticketing giant.
In approving the Ticketmaster/Live Nation merger last month, the U.S. Department of Justice did not place any conditions on what Live Nation could do with Eventim, instead requiring Ticketmaster to sell its Paciolan ticketing operation to Comcast-Spectacor and licence its ticketing software to concert promotions rival AEG.
The relationship between Eventim and Live Nation has been strained since the announcement of the merger, and Eventim worked against Live Nation and Ticketmaster to have the UK Competition Commission reconsider its approval of the merger.
On the financial front, Live Nation Entertainment's revenues dropped to $854 million for the fourth quarter, and overall revenue for the combined company was nearly $5.7 billion for the year, the first time the two companies reported combined sales.
Ticketmaster's revenues for the quarter grew to $409 million, and the division generated $35 million in operating profit. Live Nation's fourth quarter operating loss was $64 million, a significant improvement over an operating loss of $323 million for the same period the year before.
"In the months ahead, we will concentrate our efforts on integrating our operations, building efficiencies and driving innovation across the products and services we provide to artists, fans and sponsors," Rapino said in a statement. "As we seek to maximize the performance of our combined operations, we are focused on eliminating redundancies and capturing at least $40 million in synergies this year. Our goals for 2010 also include further enhancing and growing our two premier e-commerce store fronts, Ticketmaster.com and LiveNation.com, continuing to test advanced ticketing technologies and distribution channels, and evaluating our options with regard to reducing our debt and strengthening our financial position."
Added Irving Azoff, executive chairman of Live Nation Entertainment, "Our merger with Ticketmaster allows us to accelerate the execution of our vision and strategy to build a live music company that delivers a full service connection between the artist and fan. We believe our combined platform will create a more diversified and stronger enterprise with the resources to develop new products, expand access and improve transparency and choice in the ticketing process, while generating incremental free cash flow and increased returns to shareholders."