TM Sets Priorities Post Spinoff
IAC’s spinoff of Ticketmaster, which is expected to be completed by early August, will see the company taking on approximately $750 million in debt and $450 million in cash, executives said in a conference call June 23rd.
The spinoff punctuates what had become a highly litigious chapter in the history of the Barry Diller-controlled media conglomerate. IAC spent months in the courtroom with majority shareholder Liberty Media battling over plans for the spinoffs that will include not only Ticketmaster, but also the company’s HSN, Interval time-share business and LendingTree mortgage referral units.
TM’s $750 million debt will finance a dividend payment that goes to IAC at the time of the spinoff. Along with dividend payments from the remaining units, the parent company is likely to receive more than $1 billion cash to offset its own debt and strengthen its balance sheet, according to the Wall Street Journal.
Despite the debt transference, TM should be producing bottom line growth in 2009, Ticketmaster CEO Sean Moriarty told analysts on the call, as the company pursues opportunities in three areas: ticket resales, global expansion and marketing services.
TM may have taken a firm stance against the secondary ticket market in the past, but that was then and this is now. Moriarty referenced the company’s Q1 acquisitions of TicketsNow and GetMeIn! as two venues through which the company expects to tap into the multibillion dollar ticket resale business as public perception of the practice continues to improve.
"The focus we think increasingly over time is selling tickets, and we think it’s going to matter less and less whether it’s the first time, second time, or potentially even the fifth time," he said.
The company also expects to see continued growth in areas including China, where it has only recently entered the market, as Western acts continue to embrace such regions in their global routing.
"Most international markets we operate in, we are the category leader," Moriarty said. "We’re in 20 countries today and expect to be in 35 to 40 markets within five years."
While he conceded "there is no silver bullet to replace any one client of Live Nation’s size," Moriarty said TM’s recent investments in infrastructure, iLike, Front Line Management and ancillary products should help to offset the impact of the loss when LN ends its partnership with the company later this year.