Don Law Buys Theatres From LN

Live Nation has sold three landmark Boston theatres for approximately $22.5 million in cash, the company announced May 5th. While the company declined to name the buyer, Boston media reports it is a partnership formed by Live Nation New England President Don Law and supermarket heir David Mugar.

The Boston Herald reports the newly formed company, Boston Opera House Ventures LLC, is headed up by pricipals Law and Mugar. The company will operate separately from Live Nation, which will continue to promote non-theatrical shows at the venues.

The properties are the Boston Opera House, Orpheum Theatre and Paradise.  Live Nation’s other area venues include the Comcast Center in Mansfield, Bank of America Pavilion and House of Blues.

Proceeds from the sale will be used to pay down Live Nation debt.

“This sale will generate a multiple to operating income in excess of 10x and allow us to apply 50 percent of the proceeds as a permanent reduction in our term loans,” Live Nation President/CEO Michael Rapino said in a statement. “We are actively working to divest our remaining non-core assets as we continue to enhance our liquidity and de-lever our balance sheet.”

Live Nation will recognize a non-cash impairment charge of approximately $7.7 million in the first quarter of 2009 which reflects the difference between the sales price and the carrying value on the company’s balance sheet driven primarily by the 2004 value of the Boston Opera House, according to the statement.

In addition to the cash buyout, Live Nation will also receive an earnout from the Orpheum Theatre over the next five years.