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“We're comfortable with our strategy but not complacent."
——TM's Sean Moriarty

THE BIG SPINOFF

Newly Free From IAC/InterActive, Ticketmaster Braces for the Imminent Loss of Live Nation
Ticketmaster today begins life as a stand-alone, publicly traded company after five years under the umbrella of Barry Diller’s IAC/InterActive empire.

The spinoff comes at a healthy time for the #1 ticket seller. In 2007, TM sold 141 million tickets valued at $8.3 billion, with revenues of $1.24 billion, while profit rose at a 34% annual rate over the last three years, hitting $169 million in ’07.

But things will change dramatically next January, when Live Nation stats selling its own ducats. LN is TM’s biggest customer, accounting for 17% of its revenues last year. So one big challenge for CEO Sean Moriarty is figuring up how to make up for that loss of business.

To help make up for the loss, Ticketmaster is counting on continued growth in its international operations, which generated $426 million in revenue last year, the L.A. Times reported today in a Page One Business-section feature. That was up 41% from 2006 and accounted for about a third of the company's total revenue. The company also intends to reduce annual operating expenses by $35 million by more fully integrating some recently acquired companies and by taking steps such as consolidating call centers.

A third target area is the ticket resale business, in which TM’s six-year-old TicketExchange competes against EBay-owned StubHub. This year, Ticketmaster expanded its resale holding with the acquisitions of TicketsNow and British-based Get Me In.

"They've really spent inordinately in order to shut us out," StubHub President Chris Tsakalakis told the Times Swati Pandey. "That's basically how they operate as a business."

Responded Moriarty: "Like any business that's been long successful in its field, you have your share of fans, and you have your share of critics. We're comfortable with our strategy but not complacent."

He also said that TM employees would see the fruits of their labor more clearly, and acknowledged that the company seeks to do more for fans, too. Ticketmaster has already invested in social music site iLike, and may consider revamping how it presents fees and charges, if not reduce the actual costs, which can amount to nearly half of face value.

"The fee structure is too complex," said Moriarty. "We're hopeful that over the next couple of years we'll make it much more fan-friendly."

Ticketmaster shares are expected to start trading today on Nasdaq under the symbol TKTM. In trading Wednesday on a "when issued" basis, the stock closed at $21.64, giving the company a value of about $1.2 billion.

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