Staff Reporter

Having reported record revenues for fiscal 1998 last week, Ticketmaster Group Inc. seems even less likely to accept Barry Diller's unsolicited bid to purchase the part of the company he doesn't already own.

Fred Rosen, CEO of the West Hollywood-based ticketing company, called Diller's bid insufficient when it was placed on the table in October.

New York-based USA Networks Inc., of which Diller is chairman and chief executive, already owns 47.5 percent of Ticketmaster, a stake he purchased from Microsoft Corp. co-founder Paul Allen last May in exchange for $210 million worth of Home Shopping Network Inc. stock. (Home Shopping Network was renamed USA Networks as of last week.)

Diller proposed a similar stock swap to Rosen, who said the bid valued at about $340 million was too low and didn't account for Ticketmaster's rapid growth.

Rosen was unavailable for comment last week, and Ticketmaster officials declined to comment.

But in an interview with the Wall Street Journal last month, Rosen said, "As time has passed, it becomes clear that the offer on the table is not sufficient."

Now that the company's growth has been quantified through the fourth quarter and 1998 fiscal year ended Jan. 31, Rosen is expected to consider Diller's deal even less palatable.

"Rosen is not taking a low-ball bid," said Richard Read, an analyst at New York-based Arnhold & S. Bleichroeder. "It is difficult to guess at what point Rosen would feel a bid was properly valued, but it is clear that Rosen feels that he can continue to grow his company even though it already dominates its market."

Ticketmaster is already the unrivaled leader in managing ticket sales for events that range from sporting events to concerts. The company generates revenues primarily through fees it charges customers who buy tickets over the phone or from sales outlets. The average service fee is about 14 percent of the ticket's face value.

Calling the fee a type of price gouging, the rock music group Pearl Jam boycotted Ticketmaster for years, refusing to sell tickets to their concerts through the computerized service. (The band finally relented just this month in order to sell more tickets.)

Ticketmaster's ticket-selling power is indeed awesome. It sold 70.2 million tickets in fiscal 1998, up from 60.0 million in fiscal 1997. That, combined with aggressive strategic expansions into related ventures, has fueled significant revenue growth.


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