Live Nation Entertainment Inc. (LYV:US)’s Ticketmaster unit resumed sending customers seeking seats at sold-out events to the company’s resale website, a practice that drew scrutiny from U.S. regulators and Bruce Springsteen.
Ticketmaster will be “100 percent transparent” when directing customers to TicketsNow, a website where users buy and sell tickets, Live Nation Chief Executive Officer Michael Rapino said yesterday in an interview. The company agreed to stop linking and limit advertising for TicketsNow in a 2009 settlement with the New Jersey Attorney General’s office and issued refunds as part of a February 2010 settlement with the Federal Trade Commission.
The new Ticketmaster system for linking to TicketsNow complies with FTC requirements, Live Nation said in an e-mailed statement. The FTC doesn’t issue approvals, the company said.
The system, under development more than a year, makes it clear TicketsNow is a separate website, Rapino said in the interview.
“We make it absolutely transparently clear that when you go to buy a ticket at Ticketmaster and the event is sold out, that there may be other alternatives,” Rapino said.
Ticketmaster is required to alert consumers when they leave the website for TicketsNow and must inform customers that TicketsNow is a resale website where ticket prices may be higher than face value, the FTC said in an e-mailed statement.
Through April, secondary ticket volume is up more than 10 percent from a year-earlier, Rapino said on a conference call yesterday after reporting first-quarter results. Madison Square Garden, Barclays Center in Brooklyn, New York, and the National Football League signed agreements making or renewing TicketsNow as the official secondary ticket partner, he said.
The company is talking with musicians, venues and sports teams about allowing Ticketmaster to link to TicketsNow when tickets aren’t available, Rapino said.
“Our secondary business continues to be a growth driver,” Rapino said. “We had great success in the first quarter.”
Ticketmaster angered Springsteen and fans in February 2009 by steering buyers to TicketsNow, where prices were as much as four times higher than face value.
In February 2010, a month after regulators approved Live Nation’s acquisition of the company, Ticketmaster issued refunds in a settlement with the FTC over the practice, which Springsteen called “scalping.”
The ticket resale business, dominated by EBay Inc. (EBAY:US)’s StubHub, is a big opportunity for Ticketmaster, Richard Tullo, an analyst with Albert Fried & Co. in New York, wrote in an e- mail after Live Nation reported first-quarter results.
“Ticketing growth was very strong,” Tullo said. “The secondary business is starting to take off and I expect better results in 2013.”
Live Nation, based in Beverly Hills, California, reported a wider first-quarter loss because of a higher tax bill. The shares (LYV:US) rose 8.9 percent to $9.05 today in New York. This year, the stock has climbed 8.9 percent.
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