(Adds background on Live Nation and Ticketmaster strategy,
confirmation from independent sources; Adds byline)
By Jui Chakravorty Das and Joe Giannone
NEW YORK Feb 3 Ticketmaster Entertainment Inc
TKTM.O and Live Nation Inc (LYV.N) may unveil a merger as
soon as this week, creating a music industry powerhouse with a
combined market value of over $700 million, a source briefed on
the talks told Reuters on Tuesday.
If the deal goes ahead, the marriage of the world's biggest
concert promoter and the leading ticketing and
artist-management company will create a dominant force in the
industry with ties to more than 200 artists such as the Eagles,
Miley Cyrus, Christina Aguilera, Madonna and Jay-Z.
A successful deal will also crown Live Nation's
longstanding efforts to mould itself into a diversified
conglomerate with businesses beyond concert promotion.
A source briefed on the matter told Reuters that talks are
at an advanced stage, but could still fall apart over issues
such as management control.
Another hurdle would be competition issues because such a
merger would concentrate power in the music industry under one
One senior music label source, who did not want to be
identified, told Reuters the merger will "face major antitrust
issues from managers, record companies, ticketing companies and
concert promoters to name a few -- not to mention the Obama
administration will be very tough on this stuff."
The new company would be called Live Nation Ticketmaster,
the Wall Street Journal reported on Tuesday.
The paper, citing unidentified sources, said the boards of
both companies had yet to approve a merger. The deal will not
involve any cash transfer, said the Journal, which was first to
report on the advanced talks.
Ticketmaster spokesman Albert Lopez declined to comment.
Live Nation officials were not immediately available.
Live Nation has been trying to boost its thin concert-
promoter margins by diversifying into adjacent businesses such
as ticketing, which has margins as high as 25 percent versus an
average 4 percent from concert promotion.
In December, the firm said it expected no further growth in
2009 in the midst of a recession, even though it forecast fan
attendance would rise 10 percent. [ID:nN04531098]
As part of its expansion thrust, the firm became known for
signing big names like Madonna for so-called 360 deals that
combine artist management with touring and merchandising.
Ticketmaster has also made forays into new territory. Last
year, it acquired Front Line Management, which represented
around 200 major acts.
Irving Azoff, head of Ticketmaster, and Live Nation Chief
Executive Michael Rapino both are expected to remain at the
combined organization but their exact roles have not yet been
nailed down, the Journal reported.
A person brief on the talks told Reuters that Rapino is
expected to be the CEO of the combined company.
(Additional reporting by Ritsuko Ando, Yinka Adegoke and Eddie
Chan; editing by Carol Bishopric)