TM Responds To SMG Deal
“Every fan of live entertainment is well familiar with theatrics. The SMG/LiveNation “news” release regarding ticketing is just that – theatrics. As often is the case, theatre can be entertaining, but it does not completely reflect reality.
So for the record, here is reality:
The announcement will have no short term impact on our business. Why? Because last week SMG signed an extension to our global master agreements with them through the end of 2010, and ratified multi-year contract extensions to half of the buildings they manage and we ticket today. In other words, less than 250 thousand tickets (of the 141 million we sold in 2007) are at possible risk with SMG in 2009; and SMG has exclusive contractual obligations to Ticketmaster through December 31, 2010 covering approximately 70 percent of the tickets we sell in SMG venues today.
We expect that the announcement will have little medium term impact, and we will do our best to ensure it has minimal long term impact as well. Why?
Because SMG does not own the venues they manage. SMG has a responsibility to make recommendations in accordance with the best interests of the municipalities that they represent. They mostly choose partners based on either a formal “request for proposal” process or otherwise in a competitive bidding process. Regardless of this announcement, we will continue to bid and expect to win on the merits.
Similar to our need to constantly prove our value and re-sign expiring venue contracts in a competitive marketplace, SMG must compete for venue management contracts against AEG, Global Spectrum, VenueWorks and others. If SMG makes decisions which no longer reflect the best interests of their clients, the results will be obvious – and causes us to consider whether we should enter the venue management business as well.”