Ticketmaster has acquired a controlling equity interest in Irving Azoff’s Front Line Management to create a new entity, called Ticketmaster Entertainment, when the deal closes.
Azoff will take the reins as CEO of the new company, while present Ticketmaster CEO Sean Moriarty takes on the new title of president of Ticketmaster Entertainment. The deal appears to give Ticketmaster some much-needed leverage as it prepares to lose its largest client and gain its largest competitor, Live Nation, Dec. 31.
Ticketmaster will acquire the minority equity stake in Front Line currently owned by Warner Music Group for approximately $123 million in cash, according to a statement released by TM Oct. 23. TM will also issue restricted stock to Azoff representing approximately 4.5 percent of Ticketmaster’s stock, and a part of the equity stake in Front Line currently held by Azoff will be canceled.
“Warner Music has been a great partner to Front Line Management Group,” Azoff said in a statement. “Warner’s commitment to artists remains extraordinary, and our roster of talent will continue to seek new opportunities to work together in the future.”
The transaction is expected to close by the end of the year.
Azoff and partner Howard Kaufman founded Front Line in 2004, quickly growing it into an industry powerhouse. Its companies and staff represent nearly 200 clients and include more than 80 executive managers.
Among the company’s clients are a wide range of major artists, including Eagles, Jimmy Buffett, Neil Diamond, Van Halen, Fleetwood Mac, Christina Aguilera, Stevie Nicks, Aerosmith, Steely Dan, Chicago, Journey, and Guns N’ Roses.
Ticketmaster was spun off from IAC earlier in the year, and Barry Diller remains chairman.
“While the Ticketmaster name has been synonymous with live entertainment for some time, today we took a significant step in solidifying our position in the music business,” Diller said.
“We will greatly benefit in having Irving Azoff lead Ticketmaster. In joining with the excellent Ticketmaster management of Sean Moriary, Terry Barnes and Eric Korman, we’ll have a superb group of executives capable of growing the Company every which way.”
The executive roster of Ticketmaster Entertainment will be topped by Azoff, CEO of Ticketmaster Entertainment; Moriarty, president of Ticketmaster Entertainment and Ticketmaster; Barnes, chairman of Ticketmaster; Korman, president of Ticketmaster; and Howard Kaufman, special adviser to Azoff.
“Front Line and its artists have never had a better partner than Ticketmaster and Barry Diller,” Azoff said. “Now we have the opportunity to redefine the business at a time of great change and opportunity.
“Consumers, artists, teams and venues will all benefit from this exciting new Ticketmaster entertainment platform going forward,” Azoff continued. “I can’t wait to create the future of the business with my new senior colleagues at Ticketmaster.”
Azoff, now partnered with a publicly traded company, will have to do at least some business a little differently than he may be accustomed to.
Under NASDAQ’s inducement grant exception, he gets a grant of restricted equity in exchange for Front Line equity awards that he has agreed to forfeit. The grant includes $35 million of restricted TM preferred stock that is convertible at Azoff’s election into 1.75 million shares of TM common stock, and 1 million shares of restricted TM common stock.
Ticketmaster has also agreed to grant Azoff options to purchase 2 million shares of TKTM common stock at an exercise price of $20 per share.