M&E Daily

Live Nation And Ticketmaster May Have To Divest Units

Live Nation and Ticketmaster Entertainment may need to give up pieces of their proposed vertically-integrated music entity to gain the approval of U.S. anti-trust regulators, the Wall Street Journal reports today.

Of particular interest to media distributors amid the ongoing merger negotiations will be the fate of Front Line Management, the artist management company that has engineered retailer-exclusive albums from the likes of the Eagles and Journey. Ticketmaster acquired a controlling stake in Front Line from Warner Music Group in 2008; Irving Azoff, the management company’s co-founder, now heads Ticketmaster as CEO.

Front Line redefined the concept of a retailer exclusive in 2007, netting Wal-Mart distribution for The Eagles’ comeback album, Long Road Out of Eden. That record went on to achieve multi-platinum certification. The management company scored another success with Wal-Mart last summer, as Journey’s exclusive Revelation set sold 100,000 units in its first week of release.

With a stable of some 200 top-draw acts, Front Line is a key component to a combined Ticketmaster and Live Nation. Conceivably it would provide touring talent to fill the 139 arenas, nightclubs, and other venues that Live Nation owns or operates. According to the Journal article, the parties consider Front Line so critical that the merger deal allows either party to back out if they are ordered to sell the unit.

Live Nation brings talent to the combined entity as well, via its so-called “360” deals with artists including Madonna and Jay-Z. In contrast to Front Line’s Wal-Mart deals, music products arising out of Live Nation’s artists have seen non-exclusive distribution through major labels. Jay-Z’s latest album, The Blueprint 3, is distributed by Atlantic. Meanwhile, Sony will distribute releases from other artists under Jay-Z and Live Nation’s Roc Nation venture.