Like its potential merger partner Live Nation earlier this month, Ticketmaster Entertainment reported a large loss, totaling just over $1 billion, for the quarter ended December 31, 2008, due a drop in ticket sales, cost cutting measures and a goodwill charge because of its declining stock price.
The company’s revenues for the quarter still managed to rise to more than 9 percent to $384 million, and total 2008 revenues were up more than 17 percent to $1.45 billion because of the company’s acquisitions last year and an increase in ticket prices.
TicketsNow and Paciolan, two of Ticketmaster’s acquisitions in 2008, contributed a combined $38.1 million in the quarter, but the overall number of ticket sold was down about 9 percent to 35.1 million compared to the same period the year before. For the year, the number of ticket sold was flat at just under 142 million compared to 2007.
During a conference call with financial analysts, Ticketmaster Chairman Barry Diller lamented that the company has been made “the poster child for the entire industry” and its current ills, but that many of the misconceptions about the ticketing industry are not the fault of Ticketmaster. He reiterated that problems with TicketsNow and the secondary market were “mistakes of omission, not commission,” and that what the company has tried to do is move technology forward and give fans a wide “array of transparent options” for tickets.
“The better we sell tickets, the more unpopular we become,” Diller said.
Since being spun off from IAC/InterActiveCorp late in the summer of 2008, Ticketmaster (symbol: TKTM) saw its stock price drop precipitously from a high of $27 per share to the single digits by the end of the year, a few weeks before the announcement of the proposed merger with Live Nation. Net earnings for the quarter were only 16 cents per share, while analysts had expected earnings to be almost double at 29 cents per share.
That, and the loss for the quarter, overshadowed any bright spots for the company, and may help to bolster its argument that it needs to merge with Live Nation, in part because while the company would not offer guidance for 2009, it believes the current economic conditions could make matters worse.
The two companies have said they hope to realize at least $40 million in cost savings by merging.
Ticketmaster CEO Irving Azoff, who has been publicly critical of the secondary market in recent weeks, said the company next month at a shareholders meeting may take up the issue of whether to sell TicketsNow. “It’s a very volatile area,” he said of the secondary market.
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