The combined Ticketmaster and Live Nation have reportedly begun laying off a significant number of employees, a move that appears to directly contradict what Live Nation Entertainment President and CEO Michael Rapino and Executive Chairman Irving Azoff said they would do when they testified last year before Congress.
The two executives have long argued that the merger was necessary not only for the survival of their individual companies, but also because the pairing would help the two achieve millions in operational savings.
Pollstar reports that about 20 percent of Live Nation Entertainment’s workforce is being laid off, and Rapino hinted at the possibility of such a move in a statement he made last month at the time of the company’s fourth quarter and year-end financial announcement.
“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. 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,” Rapino said.
The layoffs are reportedly occurring in the accounting, marketing and talent buying departments in the company’s Atlanta and San Francisco offices, but there also may be layoffs within the Los Angeles headquarters. In addition, some of the company’s primary and secondary ticketing staff may also face unemployment as Live Nation sheds its former ticketing partner CTS Eventim and switches back to using Ticketmaster. The exact number of staffers being let go is unknown, but the figure could well exceed 500.
The layoffs are also coming after Rapino, Azoff and other executives received hefty bonuses, which were contractually promised to the officials upon the successful completion of the merger.
Despite the announced plan to improve efficiencies, the layoffs appear to fly in the face of statements both Rapino and Azoff made before Congress in February last year when the federal government began its investigation into the merger.
During a line of questioning from Rep. Brad Sherman, a Democrat from California, both Rapino and Azoff seemed to try to assure the congressman that layoffs would not be necessary if the merger was approved. Instead, they stressed the company would likely add employees:
Mr. SHERMAN. So I will pick one here. It is for Mr. Rapino and Azoff. Mr. Rapino has testified that if the merger is not completed, both companies would be required to lay off employees. You have also claimed that a merger would lead to $40 million in savings. Do those savings involve laying off employees either from your operation or from the Ticketmaster operation? We are in a strange economy where savings are good. But when savings lead to layoffs, that concerns some of us. Tell us about how employment is going the be affected by this merger.
Mr. RAPINO. On the Live Nation front I actually haven’t said that if we didn’t do the merger, we would lay off employees. I have said that we have been a very progressive company for the last 3 years and in hiring employees and creating jobs. I do believe though, with these economic times, my 5-year vision certainly needs to be adjusted, and we currently do have a hiring freeze on. And we are just going to have to get through this year and see how the business turns out. We do believe that the efficiencies of the merger created—will actually create jobs. This merger will create jobs because we will have to staff up on the technology side to better equip ourselves to handle the scalping and the needs of today. So, no layoffs. Jobs created.
Mr. SHERMAN. Mr. Azoff, if this merger doesn’t go through, what is the effect on jobs in your operation. And, if it does go through, what is the effect on jobs?
Mr. AZOFF. Right before I started with the company, Ticketmaster laid off 10 percent of its workforce. And the recent studies that we have done are we can’t get the job done with less people, regardless of whether the merger goes through or not. So we don’t anticipate being able to reduce the workforce at this time, nor are we looking to. However, we are a public company and we have a board. We currently lose money on about, we think, 2,600 of our accounts, many of which are nonprofits and museums and municipal-owned buildings. So, down the road, if we were forced to cut back, it would probably be both in the area of accounts and employees. But, for sure—I agree with Michael—if the merger is approved, we would be adding people.
Mr. SHERMAN. And you would be adding people because there would just be more music?
Mr. RAPINO. No. We believe that right now we are both really understaffed on the technology, research, development, and consumer side of the business. So we believe that the answer for the future is creating a more accessible storefront. And technology has just taken off, as you know. On the recording side, they have lost a lot of their business to the pirates of the Internet. That is happening right now with these professional scalpers and professional technology that are just way more advanced than we are. So, we would assume we would have to build a much more sophisticated consumer storefront. We like to think it as the Ticketmaster.com of today needs become the Amazon of tomorrow for the consumer and fan. A much more convenient and accessible place to buy music. With that, we would like to staff up in the technology side.
A Live Nation spokesperson did not return a message seeking comment.
Last Updated on March 20, 2010
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Shouldn’t Congress re-open their investigation of Live Nation and Ticketmaster? How can a company that pays it’s executives millions of dollars in bonuses after the merger justify laying off more people in an economy that is already hurting, ESPECIALLY after they testified that they would be hiring MORE employees after the merger? Smells like something fishy is going on here.
Lets be realistic here for one second. If Live Nation wasn’t promoting Lady Gaga’s tour prices wouldn’t be 175 dollars for all lower level seats. All uppers wouldn’t be 85 dollars. And there DEF wouldn’t be only about 500 consumer friendly priced seats at 50 bux. Tom Petty promoted by Live Nation, and now tickets cost an additional 25 dollar for the good seats in the house. I mean they just didn’t lie about laying off employees. They lied about EVERYTHING.
Why should we be any bit surprised of the lies they told Congress, that they would do the opposite of what they told them. We knew they lied, these two companies have LIED to the consumers for years. What is disgusting is that the very people we elected, believed their lies.
Just what California needs is more added to the unemployment line.
Why should Azoff or Rapino give a rats a$$ about the consumer. They stuck it to the consumers with those outrageous ticket prices they hide behind, calling packages, or experiences. The consumers and brokers are paying for those overpriced salaries to those two clowns.
To gouge the consumer with the Lady Gaga prices, she was like $55 a few months ago. You tube sensation Justin Bieber with paperless on his first tour. Charging more for aisle seats, those what I would like to call Rip off “Experiences” or “package deals”.
Can Congress go back and investigate this? Or does Congress ignore now, they allowed the monsters to merge and realized that they were lied too.
Curious to know if we can find out how these clowns voted for this merger, cause I would like to send my rep my thoughts on this huge error they approved. Also to let them know they lost my vote in the next election. Knowing how politicans operate, whomever hands them the largest donation gets their say. Weed em out!
Before you waste your $.44 on a stamp, we should probably revisit the roles of the 3 branches of government. Congress (Legislative Branch) didn’t “vote” on this merger; nor do they vote on any merger for that matter. Investigations of antitrust and monopolistic practices fall to the Department of Justice, which is a member of the Executive Branch. The DOJ reviewed the details of the merger, negotiated various concessions (ie the Paciolan sale), and ultimately determined not to challenge the venture. Congress had absolutely no say in the matter.
Whilst I believe that the Live Nation Entertainment merger isn’t quite the disaster promoters thought it would be (http://www.somasoapbox.com/2010/01/26/live-nation-entertainment-is-it-quite-the-disaster-we-thought/) this issue continues to reinforce why LNE has created a backlash from promoters and artists alike. The industry should see this as healthy competition, reinforcing good relations with customers (and employees aswell clearly!). If LNE carries on down this route, it seems to be creating its own negative press, which for the competition is music to their ears (pun intended).
Now that the democrats control congress and the executive branch, it’s good to see they no longer favor big business over the little guy, and that they have consumers best interests at heart.
Oh, and now here is one more clown (Mr Rapino and Co) that we can honestly say “You Lie!”.
As for Congress having nothing to do with it, I beg your pardon. They most certainly can call any industry they want on the carpet, and have done exactly that with Wall St, Banking, and the auto business. Now look how that turned out – payoffs for everyone!
All that big bonus money has got to come from somewhere…
Hahaha, yeah, the bonus numbers are INSANE. I hate when blowhards like Rapino & Azoff use corporate words & phrases like synergies, empowerment, & moving forward. Lame, soul-less corporate jackasses, never telling it like it is. Worse than the Bush administration!
Honestly, I hate the merger too for several reasons, but artists & their managers are driving prices up & have final say. It’s not TM or LN’s fault in this instance. People get their panties up in a bunch because they don’t want to blame prices on their favorite artists, but it’s just not true. The merger is so wrong on so many levels, but this is not one of them.