The spin-off of Ticketmaster from parent company IAC/InterActiveCorp. may prove a boon for producers and promoters who want to stage concerts and other events at venues outside the country.
That's because when the company starts operating independently it will mount an aggressive international expansion program.
Executives at Los Angeles-based ProSports and Entertainment Inc., which produces and promotes sporting events, car shows and concerts, are looking forward to the new possibilities.
"We view the spin-off of Ticketmaster as a great opportunity for us to have a strategic partner in new markets in South America and Asia," said Paul Feller, chief executive of ProSports and Entertainment.
Sean Moriarty, chief executive of Ticketmaster, told Wall Street analysts last week that he would be looking to double the company's international presence to 40 countries during the next five years, with a special emphasis on China.
As the spin-off loomed, West Hollywood-based Ticketmaster was already making moves to create an international presence. The company recently partnered with Emma Entertainment, Beijing Gehua Ticketmaster Ticketing Co. and Broadway China Network to sell an estimated 6.8 million tickets to the Olympic Games in Beijing.
Another development in Ticketmaster's position was its coming split with Live Nation. The concert promoter, which accounts for 15 percent of the ticket company's revenue, announced that it would stop using Ticketmaster services next year.
The combination of Ticketmaster's new emphasis on international growth and its split with Live Nation next year gives companies like ProSports and Entertainment hope that the nation's largest ticket seller will be more willing to work together on marketing deals to boost sales.
"Right now, we're competing with Live Nation in a way," Feller said. Ticketmaster will have more time and motivation to work with companies like his as part of its strategy to make up the lost Live Nation revenue.
Live Nation represents an estimated 10 percent of Ticketmaster's bottom line.
Typically, ProSports pays Ticketmaster a fee for handling ticket sales online and at the door. In turn, Ticketmaster handles all ticket sales and often helps market the events.
"They have a tremendous marketing machine and now they're going to be focusing on their core competency selling tickets," Feller said. "We should be able to take advantage of that fact."
Part of Ticketmaster's vision for the future includes what Moriarty calls "upsells," or marketing strategies that boost sales revenue by offering consumers premium services for additional fees.
ProSports and Entertainment has adopted a similar strategy through its "Stratus Rewards Visa White Card," which gives high-end ticket buyers special seating at events, plus access to private jet travel, luxury automobiles and travel packages, among other things.
Moriarty also see huge potential in the ticket resale market.
The company collects fees from ticket buyers and those who re-sell tickets on its TicketExchange Web site. The resale market is expected to grow by about 12 percent industrywide to $4.5 million during the next five years.
Ticketmaster receives about 70 percent of its revenues from online ticket sales and between 10 percent and 20 percent from its ticket exchange service, where consumers can trade, buy or sell their tickets using the company's secured technology.
Growing its presence in the resale market is also a way to hedge against economic downturns that may affect sales. Moriarty told Wall Street analysts last week that Ticketmaster's brand name should help it compete with reseller market share leader StubHub.com, a unit of eBay Inc.
Another part of Moriarty's strategic plan calls for restructuring the company to make it more cost efficient.
Layoffs at the West Hollywood headquarters are possible, as Moriarty told analysts the company would be looking at "platform consolidation opportunities and other operating cost reductions."
About 520 people work out of the West Hollywood headquarters and at satellite offices in Los Angeles.
Prior to the spin-off Ticketmaster is expected to pay $730 million to IAC/InterActiveCorp., leaving it with approximately $430 million in cash.
IAC/InterActiveCorp. will also spin off HSN shopping network, the Interval time-share exchange and LendingTree online mortgage unit.
IAC/InterActiveCorp. is expected to receive more than $1.5 billion in total dividends from each business unit it spins off with the exception of LendingTree, according to last week's SEC filings.
IAC will focus on new media and advertising businesses, including its Ask.com search site and Match.com dating service.
For every share of IAC common stock, shareholders will receive one-fifth of a share of HSN, one-fifth of a share of Interval, one-fifth of a share of Ticketmaster and one-thirtieth of a share of LendingTree.
That means John Malone's Liberty Media Group will still be the largest shareholder of each company, followed by Lord Abbett & Co., Clearbridge Advisors and Barry Diller.
Chief Executive: Sean Moriarty
Headquarters: West Hollywood
Employees: 520 in West Hollywood and Los Angeles
Profile: Operates in 20 countries, providing ticket sales, ticket resale services, marketing and distribution through its Web site
Sales: More than 128 million tickets sold at a gross value of about $7 billion during 2006
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