Live Nation signs ticketing deal with SMG
NEW YORK (Reuters) - Concert promoter Live Nation Inc said on Thursday it signed a seven-year deal to sell tickets at the North American arenas, stadiums and theatres managed by SMG.
The agreement with the Philadelphia-based venue manager is the first significant move by Live Nation to move into the ticketing business beyond its own venues, pitting itself against Ticketmaster, the leading U.S. ticket vendor.
Ticketmaster's rights to sell tickets to Live Nation events expires at the end of this year. Afterward, Live Nation plans to launch its own rival ticketing service to manage its own events as well as those managed by other companies.
Live Nation shares rose $1, or about 6 percent, to $16.87.
SMG manages such facilities as Chicago's Soldier Field, New Orleans' Superdome, Nassau Veterans Memorial Coliseum in Long Island, New York, the Bill Graham Civic Auditorium in San Francisco and a number of venues in small to medium sized markets.
In addition to promoting concerts and events, Live Nation manages a number of venues such as Jones Beach Amphitheater in New York and Gibson Amphitheatre in Los Angeles.
Live Nation will handle some of SMG's ticket sales late in 2009 growing to around 5 million tickets sold each year by 2011. It said the total tickets included in the deal would amount to around 25 million over the term of the deal.
The Los Angeles-based Live Nation expects to handle more than 10 million tickets for its own venues in the first year. It said the numbers are expected to grow annually to approximately 13 million by 2010 as ticket sales from Live Nation's House of Blues venues become available.
The company said the deal with SMG represents an estimated 25 percent annual increase in the 13 million tickets Live Nation already expects to sell over the next seven years.
SMG, is owned by private equity fund American Capital LTD.
Ticketing is key to Live Nation's drive to become a comprehensive music business covering concert promotion, music licensing, recordings, merchandising, sponsorship and other related businesses.
The company has become best known for signing high profile multimillion dollar '360 degree' deals with big name artists like Madonna and Jay-Z, covering their concerts, recording, merchandising and other areas.
Live Nation's own ticketing service will allow the company to control customer data, assemble valuable concert ticket packages for customers and pursue sponsorship opportunities.