Ticketmaster loses $1B in 4Q on accounting charge
Ticketmaster loses $1 billion in 4th quarter on huge write-down
Ryan Nakashima, AP Business Writer
Thursday March 19, 2009, 8:21 pm EDT
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LOS ANGELES (AP) -- Ticketmaster Entertainment Inc. lost $1.07 billion in the fourth quarter, as the ticket-selling company that hopes to merge with concert promoter Live Nation Inc. had to take a huge impairment charge to account for its falling share price.
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After the company released the results Thursday, Chairman Barry Diller fought back against critics, again denying the company intentionally redirected Bruce Springsteen fans to its resale sites to charge premiums above face value.
Legions of angry fans have also complained about being shut out from concerts from Phish to Michael Jackson, but Diller said it was because thousands of tickets can be sold in seconds.
"Most fans can be disappointed within moments of the onsale regardless of how much we continually invest in customer service," Diller said. "Oddly, the better we sell tickets, the more unpopular we become."
The company expects to merge with Live Nation in the second half of the year pending an antitrust review by the Justice Department. It will seek shareholder approval this summer.
West Hollywood-based Ticketmaster said its loss amounted to $18.82 per share in the three months to Dec. 31.
The $1.1 billion goodwill write-down mostly reflected the decline in the company's stock price, which debuted at $20 when it spun off from IAC/InterActiveCorp in August. The shares closed Thursday down 3 cents at $4.09 before the earnings were announced.
Excluding charges, earnings fell 81 percent to $9.9 million, or 16 cents per share.
Revenue grew 9 percent to $384 million, mainly due to acquisitions.
Analysts surveyed by Thomson Reuters had expected, on average, earnings of 29 cents per share on revenue of $378 million.
"Last year was a year of transition for Ticketmaster Entertainment," said Irving Azoff, who became chief executive in October when Ticketmaster took a controlling interest in his talent management company, Front Line Management Group Inc.
"While I'm pleased that in the midst of an evolving music industry and a challenged consumer environment we were able to show substantial growth in free cash flow, we won't be satisfied until we transform the company," he said in a statement.
Free cash flow increased to $49 million from negative $15 million in the same period a year ago.
The number of tickets sold in the quarter decreased 9 percent to 35.1 million. And the gross value of the tickets sold fell 14 percent to $2.13 billion.
The company said the economy was partly to blame. Ticketmaster also cited the loss of a contract with Live Nation, which launched its own ticketing platform in January, and fewer big-name tours than in the same period a year earlier.
Its ticket resale business brought in revenue of $35 million, which analyst Brett Harriss of Gabelli & Co. said was strong in a tough economy.
"The fact that the resale business is improving is encouraging," he said.
Acquisitions that affected the results include Front Line, the resale sites TicketsNow and Get Me In!, and with primary ticketer Paciolan.
Front Line contributed about $46 million in revenue and $17 million in operating profit in the quarter.
The company offered no guidance for 2009.
For the full year, revenue grew 17 percent to $1.45 billion from $1.24 billion, but the company posted a net loss of $1.01 billion, or $17.84 per share, down from a net profit of $169 million, or $3.01 per share, a year earlier. Excluding impairments, the company's net profit fell 56 percent to $1.32.
The number of tickets sold in the year was 141.9 million, up slightly from 141.8 million in 2007.
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