Written by Adriana Hamacher    Tuesday, 11 May 2010 06:49   
Live Nation Losses Grow, May Sell TicketsNow

Losses at Live Nation Entertainment grew in the first quarter as concert attendance fell 3 percent and the company showed costs related to its recent merger with Ticketmaster.

Live Nation said on Monday it was considering "strategic options" for its struggling secondary ticketing site, TicketsNow after it sold marked-up tickets to Bruce Springsteen fans last year, despite regular face value tickets still being available. US regulators said the company must refund fans and also cut links with the main Ticketmaster site, this has caused business to stagnate. The site had made about $15 million (£10.1m, €11.8m) operating profit per year in resale fees; now it is making about $1 million or $2 million per year, CEO Michael Rapino told analysts in a conference call.

As a ticketing company, Live Nation sold 25.1 million tickets with a gross value of $1.5 billion (£1b, €1.2b) in the first quarter. Concerts represented 52% of the company’s ticket sales while sports were 19%, arts and theatre were 14% and family was 11%. Artist Nation, the company’s artist management division, had revenue of $69.4 million (£46.8m, €54.6m).

Issues also came to light with so called 360 degree contracts which will not, it seems, pay off, as hoped. Live Nation recorded a $13.4 million (£9m, €10.5m) allowance related to collectability concerns of certain, unnamed artist advances. In other words, the company has recorded an expense now because it does not expect to recoup some of the advances it paid out to big-name artists. Investors were wary of those multi-rights deals, and Live Nation has not entered into one since its signed Shakira to a ten-year deal in July 2008.

Rapino said Live Nation is on track to save $40 million (£27m, €31.4) this year as it reaps the benefits of joining forces with Ticketmaster. Most of the savings will come from layoffs. The company expects 2010 adjusted operating income that is "flat to slightly down" from a year ago, when that figure was $444 million (£299.8m, €349.3m).

Shares in Live Nation, which is based in Los Angeles, fell 17 cents to $14.65 (£9.8, €11.5) in after-hours trading Monday.

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