Shares of Live Nation stock, which trades under the symbol LYV, dropped 3 percent today, February 3, following reports that rival Anschutz Entertainment Group (AEG) was partnering with Outbox Technology to sell tickets.
At the close of financial markets today, Live Nation stock was selling for $10.43, down $0.33 from the morning’s opening price of $10.76. At one point during the day, the stock had fallen to $10.26 per share, and at no point did it rise above the opening price. The stock’s 52-week low is $8.17 and its high was $16.90.
Trading volume was above average for the stock, with more than 2.8 million shares moving between investors.
AEG, the world’s second-largest concert promoter behind Live Nation, announced this week that it had teamed up with Outbox Technology to sell tickets at the more than 100 venues AEG operates around the world, which includes the Staples Center in Los Angeles and the O2 Arena in London.
The move instantly creates a viable challenger to Live Nation as the dominant ticketing company, a title Live Nation holds following its 2010 merger with Ticketmaster. To gain approval for the merger from the U.S. Justice Department, Ticketmaster had to agree to license its software to AEG to create a legitimate ticketing competitor, but instead AEG was able to achieve a similar result by teaming up with Outbox.
AEG was Live Nation’s largest ticketing client, representing almost 10 percent of the Live Nation’s ticket sales last year. Those sales yielded service fees totaling about $55 million. Besides those revenues going away once AEG and Outbox ramp up the ticketing operation over the next six to 12 months, AEG plans to compete with Live Nation on future ticketing contracts at other venues.
The past year has been a bit of a disappointment for Live Nation, as its concert business underperformed. In addition, the company recently said it would have to readjust its earnings estimates for the year, due in part to settlement costs associated with a class action lawsuit over the company’s delivery and other fees.