Business News Deals Live Business

Shareholders and European officials take interest in Live Nation/Ticketmaster deal

By | Published on Monday 16 February 2009

This is interesting. The biggest single shareholder in Live Nation has said he supports the proposed and previously reported Live Nation/Ticketmaster merger, and the proposal that the two companies’ current CEOs, Michael Rapino and Irving Azoff, jointly run the new merged venture. However, he says he is less happy about the proposal that Ticketmaster Chairman Barry Diller become Chairman of the new company.

Speaking to Reuters, Sam Shapiro of Shapiro Capital Management, who own 15% of Live Nation, said: “There’s never been a question whether I think the combination of the two companies is a big positive. But as investment managers, we’re interested in creation of shareholder value for our clients and I worry about Barry Diller because shareholder return of value to his companies have not been that great”.

Shapiro is referring to the shareholder return delivered by Diller’s main business IAC/InterActive, of which Ticketmaster used to be a division. Although Diller still has a stake in and non-executive role at Ticketmaster, and will continue to do so at the merged company, he isn’t involved in the day to day running of Ticketmaster, and won’t be at the post-merger Live Nation Entertainment either.

However, as Non-Executive Chairman he will form part of investor Shapiro’s relationship with the merged company, so the investment man’s resistance to him could prove to be a problem, both in getting the merger through, and, if it does get through, in day to day investor relations moving forward.

Talking of hurdles the Live Nation/Ticketmaster merger must cross before going ahead, commentators suggested this weekend that the scale of the two companies’ operations in Europe, coupled with the sizes of their respective turnovers, may well mean the merger will need the approval of EU competition regulators as well as US officials.

While indie label trade body IMPALA would tell you EU competition officials have a very poor record in stopping the consolidation of the music industry (they having approved the SonyBMG merger, then Sony buying Bertelsmann out of that merged entity, and the separate sale of BMG Music Publishing to Universal Music), getting past European competition officials has often proved more tricky than getting US regulators onside.

That means that, while the European Commission probably won’t block the deal, Live Nation and Ticketmaster will have to step up their lobbying efforts on this side of the Atlantic to ensure as swift as possible a merger.