Ticketmaster to Acquire Star Power in Azoff Deal

[FunkyMonkey]

Ticketmaster To Buy Majority Of Front Line Management

October 23, 2008 - Global | Legal and Management | Touring

By Ray Waddell, Nashville

Ticketmaster's blockbuster agreement to acquire a controlling equity interest in Front Line Management Group Inc., is the latest nuke in the ongoing struggle for supremacy between Live Nation and what will be known as Ticketmaster Entertainment.

Under the deal unveiled today, the organization of Ticketmaster Entertainment, Inc. will be as follows: Irving Azoff, CEO of Ticketmaster Entertainment, Inc.; Sean Moriarty, president of Ticketmaster Entertainment, Inc. and CEO of Ticketmaster; Terry Barnes, chairman of Ticketmaster; Eric Korman, president of Ticketmaster; and Howard Kaufman, Special Advisor to Azoff.

With master strategist Irving Azoff, founder and CEO of Front Line, as CEO of Ticketmaster Entertainment - and all the leverage as manager of some of the top touring acts in the world - the battle between Live Nation and Ticketmaster has become infinitely more interesting.

Ticketmaster will now acquire the minority equity stake in Front Line currently owned by Warner Music Group for approximately $123.0 million in cash.

Since being founded by Irving Azoff and Howard Kaufman in 2004, Front Line has developed into the most powerful management company in the world, with nearly 200 clients and more than 80 executive managers. Front Line represents a wide range of major touring artists, including the Eagles, Jimmy Buffett, Neil Diamond, Van Halen, Fleetwood Mac, Christina Aguilera, Stevie Nicks, Aerosmith, Steely Dan, Chicago, Journey, and Guns N' Roses. Many of these acts, if not most, frequently tour and play concerts promoted by Live Nation, although Azoff has always maintained a close relationship with LN competitor AEG Live, a division of Anschutz Entertainment Group.

Within the Front Line network, individual managers have always maintained the autonomy to choose how their artists tour and, within that, how their shows are ticketed, at least within the freedom existing ticketing contracts allow. TM contracts primarily with venues and is the dominant player in this critical space. But Live Nation, which launches its own ticketing company next year, has made inroads into TM's business, most recently by signing a deal with facility management firm SMG (Billboard.biz, Sept. 11). And, as the world's largest promoter, LN has major leverage of its own with its wealth of content, leverage the company has already shown it intends to use.

The question going forward is whether an act in the Front Line family should be considered as part of the Ticketmaster family now. It is worth noting that managers work for the act, not vice versa, and managers are beholden to making the best deals for their clients, regardless of affiliation. But, LN's primary selling point in striking its multi-rights deals with acts like Madonna, U2, Nickelback and others has been the synergy brought by vertical integration.

Ticketmaster Entertainment will no doubt tout and seek to expand its own diversification into merchandising, branding, licensing, etc., and Azoff already has shown he can release a record without a record company with the multi-platinum success of the Eagles Wal-Mart exclusive. And, increasingly, ticketing has become the critical touchpoint and the keys to the kingdom in interaction between fans and artists. Ticketmaster and Live Nation both want to hold those keys, but ultimately they are in the artists' pocket. The highest stakes going forward will be won and lost in artist relationships.

The transaction, which is subject to customary closing conditions, is expected to close in the fourth quarter of 2008.

Under NASDAQ's inducement grant exception, Ticketmaster has agreed to grant to Azoff an award of Ticketmaster restricted equity in exchange for Front Line equity awards that he has agreed to forfeit. The grant includes $35 million of restricted Ticketmaster preferred stock that is convertible at Azoff's election into 1.75 million shares of Ticketmaster common stock, and 1 million shares of restricted Ticketmaster common stock. The Ticketmaster equity awards generally vest on the five-year anniversary of the grant date, but may vest sooner upon certain qualifying terminations of employment. Ticketmaster has also agreed to grant Azoff options to purchase 2 million shares of Ticketmaster common stock at an exercise price of $20 per share.

http://www.billboard.biz/bbbiz/content_display/industry/e3i47a4eaa11fb7b68a77e493c0a9a6b0bf

http://online.wsj.com/article/SB122473027565161583.html?mod=googlenews_wsj

[wells]

Well, so Guns and Axl are managed by Azoff and Gould and not Front Line, but I am not sure ... I don't know if Guns will be now managed by Ticketmaster Entertainment with Azoff ... who knows ... but this deal does sound cool in regarding Azoff, Ticketmaster and next tour connection ...

v. ..

[JuicySwoos]

He's a busy guy.

[Red1]

Sorry Jarmo - no idea where to post this.

http://online.wsj.com/article/SB122473027565161583.html?mod=googlenews_wsj


Just think it could mean some great things in terms of deals that can be struck for the GNR tours in the future.

[Verse Chorus Verse]

Fuck TicketBastard.

[tim_m]

I agree but they are what most tickets are sold through so they're kinda a necessary evil.

[Layne Staley's Sunglasses]

There are ways around it.

[FunkyMonkey]

The Billboard Q&A: Ticketmaster Ent. CEO Irving Azoff

October 31, 2008 - Touring

By Ray Waddell, Nashville

The artist manager extraordinaire - now head of the ticketing giant - talks about his plans for the concert business, his ideas for retail exclusives and the future of the music industry.

What's the biggest misconception people have about the Ticketmaster/Front Line deal?

The biggest misconception about this deal is that Ticketmaster in the future will be what it was in the past. The new name of the company is Ticketmaster Entertainment, and it's a platform for us to build a lot of other things. The fortunes of this company aren't going to rise and fall just on the ticketing business. We're going to build the ability for people to distribute their music.

Will the fundamental Ticketmaster model-contracting with buildings to sell tickets and making revenue from service charges-stay in place?

Of course. We have four core businesses. We have that business, we have the secondary ticketing business, we have the management business and, most importantly, we have the artist-to-fan experience-that's the artist-centric way of artists being able to reach their fans directly. The artists can use the tools we have to tie together their recorded music, their ticketing and their merchandise. The part of Ticketmaster that so excited me was that they're building out this pipeline to reach the 144 million people a year who buy tickets.

You're talking about the database of ticket buyers?

This is an untapped area. I don't know how many people Amazon or eBay talk to-I should find out, and I will, but I'm new to this job-but we talk to 144 million people who actually spend money. This isn't just a free site that people come to, this isn't just traffic, these are people with credit cards who buy. A lot of my clients want to give the music away with their tickets. I have one client who said to me, "I love to make new music, but I hate to play two or three new songs and have people get up and go to the bathroom. I want to give my music away to the people who buy tickets so they'll know the new songs when we play them. If they've spent $60 or $80 or $100 to buy a ticket and if I give them the music as part of that, I bet they'll bother to listen to it."

What's been the reaction to the deal from Front Line managers and clients?

Read the full Q&A which includes Azoff's thoughts on a record label's role in today's industry, how the Front Line/Ticketmaster deal impacts the competition with Live Nation for arena contracts, and more.

http://www.billboard.biz/bbbiz/content_display/industry/e3i664e8c35e1bbbcc03b258ce2673069c9