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Liberty Media launches $500m+ acquisition vehicle

Liberty Media, the US media, communications and entertainment giant which owns just over a third of Live Nation, is on the hunt for a new addition to its corporate portfolio.

The firm, which also owns Formula 1, satellite radio company SiriusXM and the Atlanta Braves baseball team, among other interests, has launched Liberty Media Acquisition Corporation (LMAC), a so-called special-purpose acquisition company (SPAC) with which Liberty intends to search for a “target in the media, digital media, music, entertainment, communications, telecommunications and technology industries”.

The SPAC – a type of shell company which allows for a launch on the stock market, in LMAC’s case New York’s Nasdaq, without going through the traditional initial public offering (IPO) process – launched on Friday (22 January) and is initially trading under the Nasdaq stock symbol LMACU.

LPAC is targeting a business in the media, music, entertainment, communications, telecommunications and technology industries”

Shares in LMACU were initially priced at US$10 each, with 50 million units up for grabs, giving LMAC an IPO price of $500m. The SPAC opened for trading at 32% above that, at $13.20 per share.

As of 25 January, the LMACU units – each of which comprise a share of series-A common stock, along with a fifth of a warrant which may be redeemed for another share of series-A stock, at $11.50 per share – were worth $13.

LMAC is led by Liberty Media CEO Greg Maffei (pictured) and other members of Liberty’s management team, with Citigroup, Morgan Stanley, Credit Suisse and Goldman Sachs underwriting the IPO as joint bookrunners.

On 19 January, Live Nation’s share price reached an all-time high of $76.54, despite the ongoing impact of the Covid-19 pandemic.

 


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Liberty repays $130m loan, avoids LN stock sale

Liberty Media Corporation has repaid a £130 million margin loan to Live Nation, preventing any sale of its stock in the company.

Liberty, which owns almost 70 million shares in Live Nation, around 34% of the company, states that the payment means “there are no margin or other price triggers that could require a sale of the underlying stock.”

Following the repayment, Live Nation’s share price rose 11%, with the company’s market cap sitting at $7.06 billion.

Liberty, which is led by Live Nation chairman Greg Maffei, holds majority shares in satellite radio giant SiriusXM. The company acquired internet radio, streaming service Pandora Media in 2018 and motorsport series Formula 1 in 2016.

“There are no margin or other price triggers that could require a sale of the underlying stock”

Share prices of all major live entertainment companies have taken a hit in the past few weeks as the spread of Covid-19 continues to cause government-imposed lockdowns, event bans and tour and festival postponements across the world.

Both Live Nation and German live events giant CTS Eventim have seen their price dip by over 40% in the last two weeks due to fears around the virus. Like Live Nation, Eventim has experienced a rebound in the past day, with its share price rising by almost 10%.

The S&P 500 index, a measure of the stock performance of 500 large companies listed on US stock exchanges, has fallen by 29% in the last month. The index inched up by less than 1% following trading yesterday.

 


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Liberty Media linked with investment in CAA

Liberty Media Corporation, a significant shareholder in Live Nation, is reportedly in talks to acquire a stake in Creative Artists Agency (CAA).

According to the Financial Times, any investment by Liberty – which owns more than a third of Live Nation Entertainment stocks, as well as a majority interest in satellite radio giant SiriusXM and recently acquired streaming company Pandora Media – in CAA would give the company “greater negotiating leverage for its other businesses, namely Formula One”, the motor racing championship it acquired in late 2016.

Liberty and CAA are already partners on Formula 1, with CAA Sports handling sponsorship sales for the sport since April 2017.

Liberty and CAA are already partners on Formula 1, with CAA Sports handling sponsorship for the sport

A spokesperson for TPG, the private-equity firm which owns the majority of CAA, tells the FT it receives regular approaches about its investments but that it was not in “active discussions” regarding CAA, one of the world’s leading booking agencies.

Other investors in CAA, whose music roster includes Muse, Kane West, Katy Perry, Queen and Adam Lambert, AC/DC, Eagles, Foo Fighters and Florence and the Machine, include China’s CMC Capital Partners and Singaporean sovereign-wealth fund Temasek.

Greg Maffei, Liberty Media’s CEO, is chairman of both Live Nation and SiriusXM, and there has long been speculation from Wall Street that Liberty’s goal is to create a vertically integrated music business encompassing radio, streaming, concerts and ticketing.

Both CAA and Liberty declined to comment.

 


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Pandora and Live Nation ‘brought together’ by SiriusXM deal

SiriusXM has created the “world’s largest audio entertainment company” by acquiring internet radio/streaming service Pandora Media, the US satellite radio giant said today, in news that is likely to reignite speculation about a potential merger with Live Nation.

The acquisition – an all-stock deal worth US$3.5bn – will “capitalise on cross-promotion opportunities between SiriusXM’s base of more than 36m subscribers across North America and 23m-plus annual trial listeners and Pandora’s more than 70m monthly active users” – the largest digital audio audience in the US, according to a joint statement.  The new company expects to turn over more than $7bn in 2018, with “strong, long-term growth opportunities” predicted for the years ahead.

SiriusXM originally invested $480m in loss-making Pandora last June, concurrent with the company offloading Ticketfly to Eventbrite in a return to its “core priorities”.

Commenting on the merger, Jim Meyer, CEO of SiriusXM, says: “We have long respected Pandora and their team for their popular consumer offering that has attracted a massive audience, and have been impressed by Pandora’s strategic progress and stronger execution. We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses.

“There are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses”

“The addition of Pandora diversifies SiriusXM’s revenue streams with the US’s largest ad-supported audio offering, broadens our technical capabilities and represents an exciting next step in our efforts to expand our reach out of the car even further. Through targeted investments, we see significant opportunities to drive innovation that will accelerate growth beyond what would be available to the separate companies, and does so in a way that also benefits consumers, artists and the broader content communities.

“Together, we will deliver even more of the best content on radio to our passionate and loyal listeners, and attract new listeners, across our two platforms.”

SiriusXM – 71% owned by Liberty Media Corporation – has long been the subject of rumours it could take over, or merge with, Live Nation, in which Liberty holds a 34% stake. Greg Maffei, CEO of Liberty Media, said in said in May that the company may look at “ways to have them [SiriusXM and Live Nation] work together”, and many analysts espoused the potential benefits of a Live Nation/Ticketmaster–SiriusXM merger, which Citigroup’s Jason Bazinet says would create a “vertically integrated music titan”.

Brandon Ross, of BTIG Research – who said as long ago as June 2016 that Live Nation, SiriusXM and Pandora “could act as a powerful end-to-end music distribution platform from live music to streaming music and radio” – suggested in July that an acquisition of Live Nation by SiriusXM in on the cards. SiriusXM’s CFO, David Grear, however, soon poured cold water on the rumours, saying he’s “not certain they have much to do with reality”.

“This could be anti-competitive in the concert industry – or not”

In an investor call yesterday, Ross was again banging the drum for a SiriusXM–Live Nation merger, asking Meyer (pictured) whether “Live Nation together with these assets [SiriusXM and Pandora] makes more sense than what one carries just as a standalone company”, although the CEO declined to comment.

Speaking to Slate, David Lowery, a music business lecturer at the University of Georgia, says he also sees deeper integration for the three brands in future, with today’s deal “effectively bring[ing] these three companies together”.

Lowery – also the founder of alt-rock bands Camper Van Beethoven and Cracker – adds that only time will tell if the acquisition has a significant impact on the live music business. “This could be anti-competitive in the concert industry – or not,” he comments. “For instance, my bands enjoy significant SiriusXM play. Cross-promotion could enhance revenues of many mid-tier artists. But honestly that’s an unknown.”

Following news of the acquisition, Pandora’s shares jumped 8.6% to $9.88, although they have since fallen to $8.98.

 


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Analyst: Live Nation–SiriusXM merger “inevitable”

A merger between Live Nation and Liberty Media’s SiriusXM is inevitable in the near term, a leading Wall Street analyst has suggested.

Earlier this month, Live Nation’s share price climbed above US$50 for the first time, bolstered by rumours the concert giant could be the target of an acquisition by satellite radio provider SiriusXM.

Greg Maffei, CEO of SiriusXM parent company Liberty Media – which owns roughly a third of Live Nation – said in May that the company may look at “ways to have them [SiriusXM and Live Nation] work together”, and analysts have long espoused the potential benefits of a Live Nation/Ticketmaster–SiriusXM merger, which Citigroup’s Jason Bazinet says would create a “vertically integrated music titan”.

Brandon Ross, of BTIG Research – who said as long ago as June 2016 that Live Nation, SiriusXM and Pandora (since partially acquired by Liberty) “could act as a powerful end-to-end music distribution platform from live music to streaming music and radio” – now says an acquisition of Live Nation by SiriusXM in on the cards – if Live Nation’s board agrees to a deal.

BTIG has given Live Nation shares a price target of $60 and upgraded to ‘buy’

“We and a growing group of investors have come to believe a nearer-term combination of SiriusXM and Live Nation is inevitable,” Ross writes. “Or, put another way, that Liberty would like a deal to happen, which likely makes a transaction inevitable.

“A trail of data points has been widely circulated over the past month which give credence to this theory. The most interesting evidence comes from the words of [Liberty Media chairman] John Malone himself, in this excerpt from the 14 June WSJ: ‘There are some synergies amongst companies that we have a stake in that we’re still exploring’ that could lead to deals, Mr Malone said.”

Other indicators suggesting an acquisition is likely, continues Ross, are slowing growth at SiriusXM (SIRI), with a “Sirius acquisition of LYV [helping to] solve Liberty’s problems by helping to (at least optically) protect SIRI’s terminal value”; threat to SiriusXM’s in-car radio business from music streaming services and the “exploding popularity” of podcast apps; the attractiveness of SiriusXM’s free cashflow to Live Nation for further expansion; and the fact Live Nation CEO Michael Rapino was added to the SiriusXM board at the beginning of 2018.

Would Live Nation agree to a deal? Ultimately, reckons Ross, Rapino – who he predicts would become the CEO of the combined company – and Live Nation’s directors will “do what is in the best interest of shareholders”. While, “on a personal level, top management is financially incentivised to sell”, and “sure access to additional cash could expedite” Live Nation’s global ambitions, BTIG says SiriusXM’s cash is “not critical to the company’s long term”.

“We and a growing group of investors have come to believe a nearer-term combination of SiriusXM and Live Nation is inevitable”

To complicate matters, should SiriusXM bid for Live Nation, other bidders will likely emerge, says Ross – with “the most likely, in our view, are Amazon and Spotify”. (Music remains a “top priority for Amazon”, which could also “significantly improve Ticketmaster”, he writes, while Spotify and Live Nation could partner on 360 deals with artists, as well as “advertising and sponsorship packages, leveraging data and Live Nation generating content to catalyse Spotify’s video ambitions”.)

Whether or not a bid materialises, the analyst says Live Nation has a bright future ahead regardless. He predicts the “new normal LYV AOI [adjusted operating income] growth to be mid-teens”, highlighting the continued growth of the live music industry, the company’s effective pricing of its shows (‘slow ticketing’) and the “large international opportunity ahead” as reasons to be optimistic.

BTIG has given Live Nation (LYV) shares a price target of $60 and upgraded them to ‘buy’. The firm also predicts AOI of $851m in 2018, and $975m for 2019, compared to average (‘Street’) expectations of $827m and $912m, respectively.

 


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Live Nation share price breaks $50 mark

The price of a single Live Nation share has risen above US$50 for the first time, amid speculation by Wall Street analysts that the concert giant could be the target of an acquisition by satellite radio provider SiriusXM.

Shares in Live Nation (LYV) have grown at a remarkable rate throughout 2017 and 2018, reaching $40 in August 2017 – just six months after passing the $30 mark – although the price dipped 13% earlier this year after a New York Times article claimed the company was being investigated by the US Department of Justice for alleged anti-competitive behaviour.

It has since rebounded from a six-month low of $36, bolstered by positive indications for 2018, a recent run of acquisitions and the potential for a SiriusXM takeover, suggests Citigroup analyst Jason Bazinet.

According to financial services company the Motley Fool, “the biggest driver of market buzz came from analyst firm Citigroup suggesting that Sirius XM Holdings might want to buy out Live Nation someday soon.”

Combining Live Nation/Ticketmaster and SiriusXM, says Bazinet, would create a “vertically integrated music titan”

SiriusXM parent company Liberty Media – which owns roughly a third of Live Nation – has been vocal about the synergies between combining Live Nation/Ticketmaster and SiriusXM, says Bazinet, which would create a “vertically integrated music titan”.

Additionally, he says, the merger would face fewer regulatory challenges than the joining together of Live Nation and Ticketmaster, as the companies operate in different sectors of the music business.

However, Sebastiano Petti, an analyst at JPMorgan, suggests a deal is unlikely, noting that Liberty has talked about synergies between the companies previously without launching an acquisition bid.

At press time, Live Nation’s share price stood at $49.82.

 


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Liberty eyeing more music in ATL with The Battery

Liberty Media CEO Greg Maffei has told investors Liberty is “increasingly a company [involved] in live performance”, as he unveiled plans to leverage his company’s stake in Live Nation to bring more live music to Atlanta, Georgia.

In an investors’ meeting yesterday afternoon, Maffei said The Battery – an under-construction entertainment district surrounding the new SunTrust Park (41,149-cap.) stadium, home to the Liberty-owned Atlanta Braves baseball team – said his focus is on “getting the rest of The Battery leased [and] seeing increased events around the whole experience, like more concerts from Live Nation”, with the promoter a “big part of” the company’s future plans.

The Battery has already hosted several live events, with John Mayer, TI, Glass Animals and comedian Dave Chappelle already having placed the 3,000-cap. Coca-Cola Roxy venue and a “strong line-up of concerts” planned for the summer and autumn, Maffei said.

The stadium itself, operated by Liberty’s Atlanta National League Baseball Club Inc. company, has also hosted headline shows by Billy Joel and Metallica.

“The Braves have begun a path to creating an awful lot of experience which is more than just putting a baseball team on the field”

Other major stadia in Atlanta include Georgia Tech’s Bobby Dodd Stadium (55,000-cap.) and GWCCA’s Georgia Dome (80,000-cap.), the latter soon to be replaced by the new Mercedes-Benz Stadium.

“Liberty is increasingly a company which has investment and operations in live performance, whether it’d be live concerts or live sporting,” Maffei told investors. “And I think you’ll see that the Braves have begun a path to create an awful lot of experience which is more than just putting a baseball team on the field. [The] Battery’s a part of that.”

In addition to Live Nation, Liberty’s other investments include motorsports series Formula 1, which it agreed to acquire last September, and satellite radio service Sirius XM, which last month pumped US$480 million into Pandora as the company sold off Ticketfly.

Live Nation rival AEG has of late been investingly heavily in Battery-style mixed-use entertainment districts, including in Tennessee’s Nashville Yards and Puerto Rican capital San Juan.

 


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Pandora sheds Ticketfly in return to “core priorities”

Ending weeks of speculation, Pandora Media has announced the sale of Ticketfly, the ticketing business it acquired for US$450 million in October 2015, as it refocuses its on its core subscription music-streaming service.

The buyer: Eventbrite, which has paid $200m – $150m cash and $50 in a note payable to Pandora – to make Ticketfly its third major acquisition of the year (after Ticketscript in January and US start-up Nvite in April).

Ticketfly grew substantially under Pandora ownership, increasing turnover 25% in Q1 2017 and by the same amount across 2016 as a whole. Its founder and CEO, Andrew Dreskin, will now lead Eventbrite’s music efforts.

“We are happy to be joining forces with our friends at Eventbrite,” he comments. “Ticketfly and Eventbrite are the two most progressive live events technology companies out there, and together we will create a transformational platform that will be game-changing for independent venues and promoters.”

“We plan to build on the great work that Ticketfly and Pandora have done and offer the benefits of that partnership to Eventbrite’s customers”

Dreskin (pictured) says Ticketfly/Eventbrite will continue to work with Pandora to deliver in-app concert recommendations, a feature rolled out in July last year. “We plan to build on the great work that Ticketfly and Pandora have done and offer the benefits of that partnership to Eventbrite’s customers, delivering even more live event notifications to Pandora listeners,” he adds.

The sale of Ticketfly comes as satellite radio service SiriusXM – a division of Liberty Media, which owns a third of Live Nation – invests $480m in Pandora, which has struggled to stem its massive quarter-on-quarter losses ($132.3m in Q1 2017).

Liberty Media CEO Greg Maffei, also chairman of the board of Live Nation, says the investment reflects SiriusXM’s desire to move into ad-supported digital radio.

“Liberty Media has long recognised the strength of the Pandora brand and the opportunities in the ad-supported digital radio market,” he says. “We are very supportive of SiriusXM’s strategic investment.”

 


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5 Singapore debuts at September grand prix

Five major international acts will play their maiden shows in Singapore this September, joining Duran Duran and OneRepublic for after-race concerts at the Singaporean grand prix.

Race promoter Singapore GP yesterday announced the first wave of artists for this year’s shows – a tradition of Singaporean grands prix since the race’s revival in 2008 – bringing The Chainsmokers, Ariana Grande, Seal, Lianne La Havas and British rapper George the Poet for their debut performances in the city-state over three days in late September.

Duran Duran, who played their last Singaporean show in 2012, will perform on both Saturday 16 and Sunday 17 September, with the other acts playing a single day apiece. More performers are set to be announced in future.

Liberty Media, which holds a significant minority stake in Live Nation, acquired grand prix organiser Formula 1 last September.

 


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DTI Management attacks “bullying” Vivid Seats

DTI Management, a developer of inventory-management software for ticket resellers, has accused Vivid Seats of attempting to lure brokers away from its platform in revenge for refusing to give the site a pricing discount.

DTI, whose clients include AEG and several sports teams, says Vivid Seats demanded DTI and its resellers provide a 7% discount on their fees in order to retain access to the site. “They are trying to force us and [our] brokers to cave in, or lose access to their platform,” CEO Curtis Cheng tells Ticket News.

Cheng (pictured) says DTI “does pretty decent business with Vivid, around 18% of their sales”, which he says amounts to more than US$9 million a month, but isn’t willing to back down: “Even though they may be the third or fourth largest exchange, there are 1,800 sites doing the same thing.

“They are trying to force us and our brokers to cave in or lose access to their platform”

“We will protect and defend ourselves from Vivid’s bullying tactic. But who is going to protect those smaller brokers?”

A spokeswoman for Vivid Seats did not respond to a request for comment.

CVC Capital Partners, the London-based private-equity firm which in September agreed to sell its controlling interest in Formula 1 to Liberty Media Group, recently invested $75m in DTI, which it hopes to turn into “the global leader in live entertainment ticket distribution”.

 


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