New Stage in Ticket War

Live Nation Deal Pressures Ticketmaster

Concert promoter Live Nation Inc. significantly expanded its challenge to Ticketmaster Inc. by snaring a five-year deal to sell tickets for one of the largest venue operators in the U.S.

The deal raises the stakes in the battle to control seats at concert and sporting events valued at billions of dollars. Ticketmaster has long dominated the business, and Live Nation has been one of its biggest customers, but Live Nation is now trying to emerge as a serious contender.

Starting late in 2009, it says, Live Nation will sell tickets on behalf of SMG, a Philadelphia company that manages more than 200 major venues, including the Los Angeles Forum and Chicago's Soldier Field. The companies say that during the deal's five-year term, Live Nation will sell the vast majority of tickets to events at SMG venues -- at least 25 million of about 30 million tickets. Those sales represent an estimated $50 million to $60 million in ticketing fees.

But Ticketmaster Chief Executive Sean Moriarty vowed to defend his company's turf. SMG lacks authority to make a deal on behalf of the municipally owned venues it runs, Mr. Moriarty said, because it is generally required to award services based on competitive bids. "We will continue to compete on an individual basis for all venues seeking ticketing services," Mr. Moriarty said.

SMG says that only a small fraction of its agreements require competitive bidding.

Live Nation, which has a contract with Ticketmaster to handle ticket sales for its events, plans to start its own ticketing service when the deal expires in January. That promises to hand Live Nation a big slice of the market, because its own events attract about 20 million ticket buyers a year. Ticketmaster has said Live Nation is its largest client, generating 17% of its revenue, which totaled $1.24 billion in 2007.

SMG, owned by private-equity firm American Capital Ltd., is estimated to be Ticketmaster's second-largest client. Tickets for events at SMG's venues represent about 6% of Ticketmaster's revenue, according to people familiar with the matter.

Jason Garner, chief executive of Live Nation's North American music operation, said his company plans to seek more avenues to get into the ticketing business.

Terms of the deal weren't disclosed. People close to the situation said Live Nation pressed an advantage it has over Ticketmaster and other competitors during the negotiations. As the largest purveyor of concerts at major venues, it is in a position to offer more events to venues that sign up for its new ticketing service -- and potentially to steer big shows away from venues that don't cooperate.

A statement from SMG President Wes Wesley said the new deal "will enhance our ability to drive content to our venues."

Live Nation's attempt to snatch business away from Ticketmaster will be a test of two dueling business models.

Ticketmaster has long-term contracts with venues, giving it exclusive rights to sell tickets. The company makes its money on service charges and other fees. It has been able to maintain its dominant position by paying its client venues a portion of the fees it collects, and by installing proprietary technology that would be difficult to replicate.

But Live Nation's growing dominance of the concert-promotion business has put it in a unique position to compete. The company has in the past year strengthened its position by lining up long-term exclusive deals with major artists, including Madonna and U2. Those arrangements make Live Nation the only promoter that can deliver concerts by some of the world's biggest draws.

By: Ethan Smith
Wall Street Journal; September 11, 2008

Ticketmaster Looks to Build On Its Success At Olympics

Ticketmaster said 6.8 million tickets to the Beijing Games were sold world-wide, the most ever for the Olympics.

The company, which last week officially was spun off from IAC/InterActiveCorp along with HSN home-shopping network, distributed tickets to the international Olympic committees and handled all domestic ticket sales. (News Corp.'s Dow Jones & Co., publisher of The Wall Street Journal, jointly owns a personal-finance Web site with IAC.)

Ticketmaster hopes to use its Olympics experience to boost its presence in China, where ticket brokering is still a fragmented and young industry, and online payment systems are relatively primitive compared with more-developed economies such as the U.S.

"This was the most complex, most high-profile event," Chief Executive Sean Moriarty said Monday. "We have been presented with some extraordinary challenges."

So far, Ticketmaster is present in six markets, and is looking to expand. The company has 6,500 outlets globally and about 35% of its revenue comes from outside the U.S.

China poses additional challenges. Apart from the lack of a widely used online-payment system, Chinese customers have different habits, such as the desire to receive tickets at the point where they pay. In other markets, customers are generally comfortable paying first and getting their tickets later.

In China, some companies employ couriers to hand-deliver tickets to customers. Mr. Moriarty said rolling out more digital tickets could alleviate that need.

Early Olympics sales rounds were beset with problems as the volume of interest exceeded expectations last year, causing the system to collapse under the heavy load.

By the May round of sales, Ticketmaster's Web site was able to handle its biggest single day -- 175 million page views, with 27 million in the first hour alone. "We are extremely pleased with the results," Mr. Moriarty said.

Even after domestic tickets were sold out, some foreign-passport holders were still able to purchase tickets locally through third-party ticket brokers. During the Games, observers noticed an unusually high number of empty seats in the stands, which some officials attributed to normal scheduling and others blamed on tickets doled out to sponsors.

By: Shai Oster
Wall Street Journal; August 26, 2008

Detroit Red Wing NHL Hockey Fans Pay Steep Prices on Stubhub.com

Many Stanley Cup Finals Tickets being purchased on stubhub.com are selling for huge prices way beyond face value.

The best way for Red Wings fans to get cheap sports tickets is to hope there's a Game 7 at Joe Louis Arena -- and act fast.

Initial bids Sunday for the potential title-clinching game, if, of course, the Wings lose the next two to the Penguins, were as low as $10 for a 200-level seat in the 24th row. That's much better than prices for Game 5 in Detroit, which, with a Detroit victory, earns the franchise its 11th Stanley Cup and fourth in the past 11 seasons.

No face value tickets are available for the NHL stanley cup finals game. But NHL hockey tickets are available through OnlineTicketsUSA.com. While stubhub.com is selling tickets ranging from one thousands to three thousand dollars, online tickets usa has better seats for half that price.

Recent postings on Craigslist.com, a free online classifieds service, had Game nhl hockey tickets ranging from $400 for a seat to $8,000 for four seats.

TicketsNow.com -- is offering 30 tickets ranging in price $700 to $4,400 each.

Prices at eBay.com are not much better, especially when compared to online tickets usa. Ebay has seats starting $400 and auctions with ticket priced at $1,200 or more.

StubHub Enlisted in Resale Of Madonna Concert Tickets

Madonna's coming concert tour is to feature what appears to be a first in the concert business: An official ticket reseller that will peddle seats at marked-up prices to fans who couldn't get them through normal channels.

However, to avoid these marked-up prices and buy tickets online for other best-selling concert tickets, visit OnlineTickets USA. At Online Tickets, you can purchase tickets for the Jonas Brothers, Spice Girls, and Def Leppard. Also available are online tickets for huge musical festivals such as Ozzfest.

In the U.S. and Canada, eBay Inc.'s StubHub will serve as the "official fan-to-fan ticket marketplace." In Europe, the role will be filled by Viagogo Ltd., a ticket reseller that also will sell "VIP packages" -- higher-priced tickets that include amenities like backstage passes and meetings with performers.

The endorsements highlight the growing popularity and influence of so-called secondary ticketing companies, which let both fans and brokers sell tickets to others at prices that often far exceed their face values. Concert promoters and artists have long complained that they are locked out of the secondary marketplace, putting money in the pockets of speculators and middlemen who aren't involved in staging or promoting concerts.

Sports teams and leagues have entered partnerships with secondary ticketing companies. But executives at Viagogo and StubHub called this the first time a major music artist has officially embraced the secondary market on this scale.

"It's the future of the ticketing business," said Chuck La Vallee, StubHub's head of business development for music. "Promoters have always complained that we don't have skin in the game."

Terms weren't disclosed, but people close to the deal said Viagogo is paying promoter Live Nation Inc. and Madonna a flat fee, while StubHub is offering a percentage of revenue on top of a fee. Despite the official status of the two companies, fans would still be able to buy and sell tickets on other online marketplaces, such as TicketsNow, OnlineTicketsUSA, RazorGator or Craigslist. But Viagogo and StubHub will be promoted in emails to fans and other marketing materials.

The tour is the first for Madonna since she announced a $120 million partnership with Live Nation in which the promoter is to participate financially in nearly every aspect of the pop star's career. The album she is promoting, "Hard Candy," is the last under her record contract with Warner Music Group Corp. The "Sticky and Sweet" tour is to start in August, with nine dates in Europe, followed by 18 U.S. shows in the fall. There will be several stadium shows in the U.S., including at Los Angeles' Dodger Stadium -- far larger venues than the arenas Madonna has historically performed in. Prices weren't announced.

Live Nation's contract in the U.S. with IAC/InterActiveCorp's Ticketmaster expires at the end of this year. At that point Live Nation will begin selling its own tickets for its concerts. Arrangements like the one with Viagogo -- in which Viagogo handles a portion of the so-called primary ticketing, in addition to resales -- could become more common on Live Nation tours once Ticketmaster is out of the picture.

By: Ethan Smith
May 9, 2008; Page B6

*With comments from K.Moore*

Protests Over Relay Cause a Rift Between Beijing and Seoul

SEOUL, South Korea -- After protests dogged the Olympic torch in Europe and the U.S. earlier this month, China made a new effort to burnish its image along the relay route. But that effort went awry in a surprising place -- South Korea -- its neighbor, friend and role model for rapid economic development.

China's embassy in Seoul encouraged Chinese students in local universities to turn out for the torch's appearance Sunday, providing thousands of flags and helping to arrange transportation.

Some of those students attacked South Koreans who were protesting China's treatment of North Korean refugees and Tibetan Buddhists. In video and pictures of the event, dozens of students are seen hurling rocks, bottles and garden tools at a relatively small group of protesters at the start of the relay route.

A protester, right, rallying in Seoul Tuesday against the Beijing Olympics, shows cutters allegedly thrown by Chinese demonstrators at South Korean human-rights activists.

Another melee occurred at the end of the route, where students attacked protesters carrying Tibetan flags and police in a hotel lobby. In all, about a dozen protesters, police and journalists were injured.

Negative feelings about the incidents grew in South Korea on Monday and Tuesday as TV broadcasters supplemented their own footage with photos and video captured by amateurs. South Korea's Foreign Ministry expressed concerns to China's ambassador, who expressed regret on Monday.

And on Tuesday, South Korea said it will deport Chinese students that it could identify from the abundant news footage. Prime Minister Han Seung-soo said South Korea's national pride had been damaged by the incidents.

"The Chinese want to be proud of hosting the Olympics, but such pride has been hurt by the attacks to the torch relay in other countries," said Lee Nam-ju, a Korean professor of Chinese language and literature at SungKongHoe University in Seoul. "It's understandable, but the way they expressed the anger [in South Korea] was immature and emotional."

The clashes stand out from the trouble that has dogged the torch relay in London, Paris and elsewhere because South Korea has a close relationship with China, shaped by proximity and centuries of cultural and linguistic connection.

Though their history has been marked by occasional clashes, China in recent years has copied ideas from South Korea's rapid economic development since the 1960s. In 2004, China became South Korea's biggest trading partner. And South Korea's biggest company, Samsung Electronics Co., is one of the biggest investors in China and is one of three lead sponsors of the torch relay.

Meanwhile, South Korea sends about 65,000 students to study in China every year, the most of any group of foreign students in China. And China now has 37,000 students studying in South Korea, the most from any country in South Korea.

"Chinese people, especially Chinese students, have good feelings toward South Koreans," said Ning Fukai, China's ambassador to Seoul. "I will continue efforts not to damage the public sentiment of both countries."

But in the wake of the clashes in Seoul, nationalist sentiment spilled forth in online postings in both countries. In China, some bloggers wrote that the Korean media made up the clashes. And in South Korea, some questioned whether the Chinese students had proper visas to be in the country.

South Korea assigned 8,500 national police to assist with the torch's appearance in Seoul and kept the route secret to reduce the chance of conflict. Authorities only announced the route would start at Seoul's Olympic Park, site of the 1988 summer games, and end at City Hall Plaza in the heart of downtown. As a result, the actual run proceeded smoothly, though no crowds gathered along the way and few South Koreans saw the torch in person.

By: Evan Ramstad
Wall Street Journal; April 30, 2008