Ticketmaster announces a billion-dollar loss, blaming “declining ticket sales, costs associated with layoffs and a massive impairment charge.”
The loss is real (in a 2009-paper-losses, bank-accounting kind of way), of course. But:
The bulk of Ticketmaster’s loss was because of a $1.1 billion charge
the company took because of a precipitous decline in its share price
since being spun off from IAC/InterActiveCorp
In fact, TM’s business is up. “For the full year, Ticketmaster reported revenue of nearly $1.5
billion, a 17% increase from 2007, thanks to its acquisitions of Front
Line Management, resale service TicketsNow and Paciolan, a
college-sports ticketing company.”
Okay – so the loss is real (sorta), but expansion has increased business revenue. Here’s the real marker: “The company said its revenue from
ticketing amounted to about $1.4 billion, for 141.9 million tickets
sold — an average of 3% more per ticket than it reaped in 2007.” Ticketmaster earned more fees per ticket than the previous year. So business is better, not worse and “declining ticket sales” and “costs associated with layoffs” had nothing/little to do with the loss.
Why would the company want to portray its finances in more negative light? Maybe because of its proposed
takeover of merger with Live Nation and concerns about the deal that TM will be a monopoly. In fact, TM has been in acquisition mode for a while, in the past year picking up Front Line Management, resale service TicketsNow and Paciolan, a college-sports ticketing company.
Congress has been inquiring into the Live Nation merger:
Sen. Schumer aggressively questioned Ticketmaster’s chief executive,
Irving Azoff, during a hearing last month on the merger. The deal would
create an unprecedented music-industry powerhouse, dominant in ticket
sales, concert promotion, venue operation and artist management. That
has created a controversy, with competitors and others in the business
complaining that the company would have too much power.
TM’s fees are exorbitantly high not because it costs so much to process ticket orders, but because the company kicks back money to venues in return for exclusive deals to sell tickets. These payments can run into the hundreds of thousands of dollars, and the company recoups them by charging the consumer higher fees on ticket transactions, claiming the kickbacks as a cost of doing business. The practice effectively cuts out competitors from selling at these venues. The company defends the practice saying it provides added revenue to concert facilities. The practice has ensured that TM maintains its hold on the ticket sale business.
Ticketmaster has also earned the ire of concert fans recently when it was revealed that the company has become involved in the secondary ticket market, where prices are often much much higher than the face value of a ticket.
Should the Live Nation/Ticketmaster “merger” go through? Probably doesn’t matter in the larger monopolistic scheme of things for the concert business (though I can’t imagine TM’s dominance is good for the business). But I’ll certainly continue to curse every time I have to pay that $2.50 “fee” to print out my own ticket at home. With my own paper. With my own ink. Geesh.Related