UPDATE 1-Ticketmaster to buy control of Front Line

* Ticketmaster to buy controlling stake in Front Line

* Ticketmaster to pay Warner Music $123 mln for its stake

* Irving Azoff to run combined company (Adds Ticketmaster statement, changes dateline)

NEW YORK, Oct 23 (Reuters) - Ticketmaster Inc (TKTM.O) agreed to acquire a controlling stake in Front Line Management Inc, one of the most influential management firms in the music business, and install its head Irving Azoff as chief executive of the combined company.

The move positions Ticketmaster to compete with rival Live Nation Inc's (LYV.N) both in ticket retail and personal management of top music artists. Azoff is one of the most powerful managers in music, guiding the careers of such artists as The Eagles, Christina Aguilera, Jimmy Buffett and Neil Diamond.

Terms of the deal call for Ticketmaster to pay $123 million to Warner Music Group (WMG.N) for its minority stake in Front Line. In addition, Ticketmaster will issue restricted stock awards to Azoff representing about 4.5 percent of its stock. Azoff's equity stake in Front Line will then be canceled.

The deal, first reported in the Wall Street Journal, is expected to close in the fourth quarter. Ticketmaster's current chief executive, Sean Moriarty, will become president of Ticketmaster and report to Azoff, who co-founded Front Line in 2004.

Ticketmaster already owns a minority interest in Front Line, which it inherited from the spin off of former parent IAC/InterActiveCorp (IACI.O) in August. The addition of the Warner Music stake will give it majority control.

Ticketmaster faces competition from its long-time client, concert promoter Live Nation, which is ending their partnership to enter the primary ticket sales market next year and is looking closely at the resale market as well.

Live Nation is also known for paying top dollar to sign big-name artists such as Madonna, U2 and Jay-Z, and build a diversified entertainment business model that includes music licensing, recordings, merchandising and sponsorship. (Reporting by Paul Thomasch in New York and Ajay Kamalakaran in Bangalore; Editing by David Holmes and Derek Caney)