Ticketmaster Entertainment and potential partner Live Nation both saw revenues rise for the quarter ended September 30, but while Ticketmaster’s third quarter profit also inched up, Live Nation’s dropped significantly, according to separate financial statements the companies released Monday.
Live Nation’s revenues grew about 14 percent to $1.81 billion for the quarter, but its net income shrank by nearly half to $69.2 million, down from $138 million for the same period the year before. Helping to drive the drop were merger-related expenses of nearly $8 million during the quarter as the company worked to court the favor of federal and UK officials to approve the deal to hook up with Ticketmaster.
Ticketmaster’s revenues climbed almost 3 percent to $348.5 million for the quarter, and the company’s net income reached $13.1 million, up from $9.6 million for the same period the previous year.
Irving Azoff, Ticketmaster Entertainment’s CEO, said in a statement that the solid quarter shows the company is “starting to build momentum” toward changing live entertainment.
“Paperless ticketing has been received enthusiastically, it’s working well and a growing number of accounts are embracing the technology,” Azoff said. “We’re rolling out a number of initiatives that enhance the fan experience, both online and at the shows, and that in the future will greatly improve the transparency of ticket pricing. In the meantime, we’re also generating pretty good financial results in a very tough economic environment, and we’re excited about the growing slate of concert tours in the planning stages for 2010.”
Despite the rosy outlook, some storm clouds could be brewing.
In an admission that their planned merger still requires a substantial amount of work, the two companies also said this week that they hope to finalize the deal in the first quarter of 2010, instead of by the end of this year. Last week, the UK Competition Commission, which already issued preliminary findings against the merger, said it was delaying its final report on the deal until the middle of January. The extension will allow the group to study more evidence and potential concessions the companies are believed to be willing to make in order to secure the deal.
While the U.S. Department of Justice has not said when it will report its findings, the federal agency also is believed to be discussing the various concessions the two companies might give up to help the deal along, but at least one, the possible sale of Ticketmaster’s TicketsNow ticket resale division, will be difficult to pull off.
Not only has Azoff criticized the secondary ticket market, Ticketmaster also saw its ticket resale business revenues drop by 24 percent during the quarter when compared to the same period the year before.
Live Nation President and CEO Michael Rapino was also pleased by his company’s performance.
“We generated robust organic growth from our operations during the third quarter as we focused on executing our fundamentals with excellence during the peak concert season. Our dedication to driving efficiencies across our core operations helped drive solid free cash flow of $123 million in the third quarter as we continue to focus on reducing our overall leverage. Our ability to generate strong attendance growth of 12 percent despite the worst economic climate in decades speaks to the strength of our concert platform and our ongoing focus on improving how we promote, price and distribute live music products to millions of fans globally,” Rapino said in a statement.
He continued, “The launch of our new e-commerce ticketing site has allowed us to start vertically integrating into a high-growth sector and improve our core business of selling more tickets directly to fans. There is more that we want to do, but Livenation.com is already a highly ranked music destination attracting millions of fans daily, seeking tickets and information on their favorite concerts. Despite a challenging advertising environment, we have also grown our sponsorship revenue by almost 5 percent year-to-date which illustrates our ability to connect brands, concerts and music fans. With these growth levers, along with our disciplined approach to cost management, we believe that we are well-positioned to deliver healthy gains in our annual cash flows with a priority on reducing our long-term debt and strengthening our balance sheet.”