IAC Grabs Front Line Stake

Ticketmaster parent IAC/InterActiveCorp is acquiring a "significant stake" in Front Line Management, reportedly buying out the stakes of two private equity firms and five talent managers with holdings in the company.

When Irving Azoff and Howard Kaufman decided to resurrect their famed Front Line Management in 2005, they did so with the financial leverage of private equity firms Thomas H. Lee Co. and Bain Capital Partners. Barry Diller’s IAC has replaced that equity, according to the Wall Street Journal, putting Ticketmaster together with the largest and most powerful artist management company in the world.

Pending regulatory approval, IAC will now have the opportunity to create stronger alliances with artists on the Front Line roster including Neil Diamond, Christina Aguilera, Aerosmith, Eagles, Clint Black, Alan Jackson, and Jimmy Buffett, among others, which could bolster IAC’s standing in both the ticketing and live music industries.

The deal may come as a surprise to some, as Warner Music Group was reportedly in active talks to acquire a much larger stake in Front Line as late as last month. WMG still holds an 8 percent stake in the company, for which it paid a reported $9 million, and the label isn’t selling, according to the WSJ. Live Nation was also vying for a portion of the company, the paper said.

Clearly, IAC isn’t the only company looking for a piece of the artist management pie. As record labels continue to struggle amid declining sales and look for supplemental income, it’s likely some will begin making management deals of their own, which could prove to be a source of conflict in the future.

But for now, the company has made a wise choice, according to the Motley Fool.

"IAC has a winner here, as long as it is able to cash in on the synergies that are available through its growing portfolio of media properties, without alienating the Aguileras and Aerosmiths that it needs to see its dream through," the Fool wrote.

Representatives for Azoff could not comment at press time.