Shares in live venue operator and concert promoter Live Nation Inc. rose more than 5 percent early Tuesday after a Goldman Sachs Group Inc. analyst recommended buying the stock.
Analyst Mark Wienkes said that the company's plans to start selling its own tickets to events as well as offer more products and services to concertgoers will boost revenues and raise share prices.
Late last year, the Beverly Hills-based company said it will not renew a long-standing contract with West Hollywood-based Ticketmaster, which is owned by IAC/InteractiveCorp., and will instead create its own ticket selling business.
The move is part of shift by Live Nation to provide a one-stop option for marketing, ticketing and merchandising services for artists and events. The company also signed Madonna to a $100-million record deal late last year and has purchased a handful of companies that make music-focused merchandise, such as T-shirts and toys.
Live Nation said earlier this year that it estimates the new ticketing business will add $17 million in income by 2010, and that could double as the company expands its offerings. The company added that it plans to spend about $20 million this year in hardware to prepare for the launch of the ticketing service. Live Nation's agreement with Ticketmaster expires at the end of this year and a separate deal with the ticketing agency and Live Nation's newly acquired House of Blues chain expires in early 2009.
Shares in Live Nation gained 5.1 percent to $11 in early trading Tuesday on the New York Stock Exchange. Shares have been lately, dropping 25 percent so far this year.
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