TM Earnings Fall 78 Percent

Facing slow ticket sales, the loss of its largest client Live Nation and legal costs related to its pending merger with that client, Ticketmaster Entertainment reported first-quarter earnings fell 78 percent to $7.2 million, or 12 cents per share.

Comparatively, the company earned $32.7 million, or 58 cents per share, during the first quarter of 2008.

Analysts polled by Thomson Reuters expected first-quarter earnings of $347 million, or 17 cents per share.

“Ticketmaster is executing well on its business strategy during a challenging economic environment,” CEO Irving Azoff said in a statement. “We believe we are laying the foundation for a stronger, more efficient organization, while continuing to build out transparent, fan-friendly processes that will benefit all of our customers and create long-term value for shareholders.”

Revenues were up 7 percent to $373.8 million, bolstered in part by the company’s previous acquisitions of Front Line Management, TicketsNow and Paciolan.

During a conference call with investors, Azoff noted revenues for Front Line were up 26 percent over Q1 2008 to $34.8 million, citing strong performance in VIP ticketing, management services, strategic acquisitions and merchandising for the film “Twilight.”

International revenues decreased 8 percent to $100.4 million following a 5 percent decline in ticket volume and 6 percent decline in revenue per ticket during the quarter. However, TM cited strong sales in the U.K. and Ireland for U2, Madonna and Michael Jackson’s upcoming London shows.

As for U.S. ticket sales, while Azoff listed a number of successful recent tours including Jimmy Buffett, Fleetwood Mac, Eagles and David Archuleta, the volume of tickets sold was still down 9 percent overall, partially offset by a slight increase in average revenues per ticket.

TM executives addressed several ways the company plans to recalibrate its business model in efforts to drive ticket sales. Examples included a greater focus on paperless ticketing, lengthening the amount of time available on the Ticketmaster Web site’s checkout pages and adding countdown clocks for tickets to top tours.

Addressing scrutiny regarding TM’s TicketsNow secondary ticketing site, chairman Barry Diller acknowledged the company knows “it’s not on the side of the angels in the minds of consumers,” but efforts are in the works to change that.

“We’re a strong proponent for any action that results in a transparent and completely open marketplace,” Diller said.

Following a settlement with the Attorney General’s office of New Jersey and Bruce Springsteen fans in the state, TM took down promotional links from its Web site to TicketsNow and prohibited listing tickets on the secondary site prior to an onsale, a practice that the company said could affect its bottom line $15 million this year.

Building upon those operational changes, the company said it will begin providing TicketsNow consumers with links back to Ticketmaster should tickets still be available on the primary market.

Following the report, Ticketmaster shares were up 16 cents, closing at $6.82.