A key element to Live Nation’s artist management partnership deal with Universal Music Group (UMG) will be the ability to bundle concert tickets and merchandise with more acts, a move that could take on added significance now that UMG’s parent company Vivendi has purchased See Tickets in the UK.
The partnership deal was announced yesterday, September 19, and calls for Live Nation and UMG to form a joint venture that will concentrate on “managing and strengthening artists and their brands through a variety of worldwide sponsorships, strategic marketing campaigns and brand extension opportunities,” the companies said in a statement.
Through its Front Line Management division, Live Nation is the world’s largest artist management company and represents Kenny Chesney, New Kids on the Block, Jimmy Buffett, The Eagles, Fleetwood Mac and the contestants from Simon Cowell’s U.S. “X Factor,” among dozens of other acts. UMG is the world’s largest recorded music company, and its artist management divisions, which include Twenty First Artists and Sanctuary, represents acts such as ZZ Top, Slipknot, contestants from “The Voice,” Robert Plant and Judas Priest.
The new joint venture will be managed by Front Line, which was created by Live Nation’s chairman, Irving Azoff, who said in a statement that the partnership will lead to innovative new options for artists and fans.
“We see tremendous opportunities to work together to create a broad range of products built on the power of music and the direct connection between artists and fans,” Azoff’s statement read. “We look forward to working closely with [UMG Chairman and CEO] Lucian Grainge and the talented UMG team in this new and exciting chapter of the music industry.”
The announcement had little effect on Live Nation stock yesterday, which closed at $8.35 per share, up $0.03 from its opening price. The stock trades under the symbol LYV, and is down significantly from its 52-week high of $12.44.
So far, 2011 has been better for Live Nation than 2010, with concert ticket sales, revenues and profits all showing signs of improvement. But, the company still has well over $1 billion in debt on its books and continues to have to work hard to assuage investor concerns about the company’s future.
In recent months, Live Nation has aggressively sought to place its tickets in front of more fans by pumping up its primary and secondary ticketing options, adding Facebook tagging features to its Ticketmaster subsidiary, and teaming with Groupon to help move distressed ticket inventory, among other initiatives.
The decision to team up with UMG is another step in that direction and could potentially give Live Nation access to See Tickets’ customer base in addition to UMG’s artist roster. Vivendi beat out Germany’s CTS Eventim and Anschutz Entertainment Group to acquire See, which is the UK’s second-largest ticketing company behind Ticketmaster’s UK division.
When Vivendi announced the See deal earlier this month, the company said it “complements [UMG’s] different businesses,” and gives the music company access to hundreds of thousands of ticket buyers.
“Together with Irving and Michael, we are creating a series of new platforms and global direct-to-consumer initiatives that will further expand the presence of our artists in this evolving marketplace while providing music fans with even more flexibility in how they consume music,” Grainge said in a statement. “Our artists and their music are at the heart of everything that we do, and by leveraging our combined skills, strengths and global reach with that of Live Nation Entertainment, our management companies, artists and their fans will benefit immeasurably.”