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The hierarchy of the new company has not been addressed, though Azoff is expected to be in charge of the day-to-day.
TICKETMASTER-LIVE NATION:
SOUP’S ON
Merger Is Announced This Morning As Execs Jockey for Position
As expected, Ticketmaster Entertainment and Live Nation have announced their intention to merge today.

The boards of both companies met Sunday and approved the deal for the newly minted Live Nation Entertainment, Inc.

Ticketmaster Chairman Barry Diller will be Chairman of the new company, while current Live Nation CEO Michael Rapino will serve as Chief Executive/President, with Irving Azoff Executive Chairman of Live Nation Entertainment and CEO of the company's Front Line Management Group.

The hierarchy of the new company has not been addressed, though Azoff is expected to be in charge of the day-to-day. 

The merger would create the music industry’s most powerful entity, combining artist management, ticketing, venue operations, merchandising and more, with a vertical integration involving live performance, merch, tickets, content, sponsorships, licensing and digital.

While it would appear to be a merger of equals, the N.Y. Post has reported that Ticketmaster investors would receive approximately 20% more shares because Live Nation has a larger base of shareholders.

The companies will boast an enterprise value of approximately $2.5 billion. Under the agreement, Ticketmaster shareholders will receive 1.384 shares of Live Nation common stock for each share of Ticketmaster they own, subject to certain adjustments defined within the agreement.

Live Nation and Ticketmaster shareholders will each own approximately 50% of the combined company. The new company anticipates generating approximately $40 million of operating synergies through the combination of their ticketing, marketing, data centers and back-office functions. The merger agreement was approved by both companies' boards of directors.

The status of Ticketmaster Entertainment President/COO Sean Moriarty and Ticketmaster chairman Terry Barnes is also up in the air.

Since Ticketmaster acquired Front Line earlier this year, Azoff has already placed his stamp on the company, last week penning a personal apology to complaints from Bruce Springsteen about the ticket roll-out to his upcoming tour. 

While Springsteen has previously declared his opposition to the merger, there is speculation that other big artist names who stand to benefit from the deal, including Bono and Don Henley, will be solicited for their approval. There is also likely to be an outcry from the competition in concert promotion and ticketing.

How the merger will play in terms of anti-trust issues at the Justice Dept. in Washington is another issue, with the only overlap in the areas of ticketing, since Live Nation just started their own operation recently after their deal with Ticketmaster concluded. Ticketmaster is not a concert promoter in North America, while Live Nation does not manage acts, but they have have inked 360 deals with the likes of Madonna, Jay-Z and Shakira, among others.

Another potential roadblock could come from German businessman Klaus-Peter Schulenberg, executive board chairman at CTS Eventim, a partner in the newly launched Live Nation Ticketing, with whom the company is contracted for ticketing services in North America and Europe.

The transaction is expected to be completed by the second half of 2009. Shares of Live Nation were down 6% at $4.96, while Ticketmaster shares were down 6.8% at $6.12.

Now, here are some canned quotes from the press release:

Diller said: "It was less than two months ago that Ticketmaster ended its 10-year partnership with Live Nation, and I'm extremely glad we could reunite with this combination. No different from any other industry, the challenges are all around every aspect of live entertainment. Being able to put Live Nation and Ticketmaster into an equal partnership will allow the companies to get through this difficult period and be able to expand live entertainment options to audiences throughout the world."

Rapino said: "This combination will drive measurable benefits to consumers and accelerate the execution of our strategy to build a better artist-to-fan direct distribution platform. As every industry observer knows, too many tickets go unsold and too many fans are frustrated with their ticket-buying experiences.

"The current inefficiencies in the system result in higher costs and confusion over access to seats. Together, we will work to simplify the ticketing process and ultimately increase attendance at live events. This is also a logical step in the evolution of our business model, creating a more diversified company with a stronger financial profile that will drive improved shareholder value over the long term."

Azoff said: "This merger, and the resources of these combined companies, will create a new dynamic and unique creative platform of choice for fans across all levels of the live entertainment experience. There is nothing more magical than the bond and the intimate relationship of fans to artists. It is truly an experience that needs to be embraced and nurtured with both integrity and respect. One of the mandates of the combined company will be to develop that bond to unsurpassed levels.

"Additionally, the Live Nation and Ticketmaster relationship will allow the live entertainment community and their respective venues to reach fans on unparalleled platforms. I look forward to working closely with Michael Rapino and the Live Nation team during this exciting and industry changing time."

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