Tag Archives: Madison Square Garden

NY Law Puts Restrictions on Paperless

18 Jul

The state of New York has adopted the first law attempting to regulate the growing paperless ticket market. On July 2, New York Governor David Patterson signed the bill, limiting the ability of ticketing companies and producers to force consumers to use paperless tickets.

The law requires artists, promoters, sports teams and venues to purchase traditional paper tickets if the seller does “not allow consumers to transfer their tickets independent of the operator.”

The law essentially blocks a growing practice by Live Nation and its ticketing system Ticketmaster of blocking fans from reselling and even transferring tickets to high demand events. Under Ticketmaster’s present paperless system, only the original buyer of the ticket can redeem the ticket at the door using the credit card used in the purchase.

The law also provided an extension to New York’s ticket resale law, which had expired in June and had temporarily made ticket resale illegal. It also banned the use of computerized bots to purchase tickets.

The law is a win for ticket brokers and resale platforms like StubHub, which had lobbied hard to fight paperless technology as anti competitive and anti-consumer.

“The new law passing in New York is a great win for consumers, as it allows for a truly open marketplace,” said StubHub spokesperson Joellen Ferrer.

During a June 2 hearing on the bill, a number of sports executives testified about the impact of paperless tickets and several state senators indicated they were considering an outright ban on paperless tickets.

“We believe in and we support transferability,” testified Randy Levine, president of the New York Yankees. He argued that the technology is too new and that the state legislature shouldn’t yet put restrictions on paperless tickets until it was better understood.

“If an artist for a show wants to provide ticketing directly to their fan club, or decides to utilize paperless ticketing, it is the artist’s prerogative to do that,” said Joe Lhota, executive VP of Government Affairs for Madison Square Garden in New York. He said a number of artists have “initiated efforts to thwart the brokers and scalpers and to drive as many first-sale, face-value tickets into the hands of their true fans.”

Lhota said banning paperless ticketing will weaken the ability of artists to sell directly to fans and push concerts into other states.

“Paperless ticketing technology is evolving, and rather than ban or limit its growth in New York,” legislators should “pass legislation that will be flexible enough to create a transferable paperless option,” Lhota said.

The losers in the deal are ticketing companies like Ticketmaster, which had sought to corral the high prices associated with ticket resale, as well as artists and agents who wanted to limit the number of tickets that end up in the hands of scalpers.

Live Nation’s Investor Relations Spokesperson Linda Bandov said the company would not comment on the resale law.

Veritix also maintains a paperless ticketing system, although its system likely will comply with the law because under most circumstances, the platform allows for both paperless and traditional fulfillment of tickets (there are some events, like student ticketing for the Final Four, where only electronic tickets are issued).

“We believe wholeheartedly that there should be a free market opportunity to buy and sell tickets digitally,” said Jeff Kline, president, Veritix. “We’ve always believed that the content owner should choose how they distribute their tickets.”

Kline also said that paperless tickets are often misunderstood by lawmakers.

“There are people out there who think it’s restrictive, and actually it’s just the opposite,” he said. “Paperless ticketing provides the ultimate flexibility.” — Dave Brooks

Interviewed for this article: Joellen Ferrer, (415) 308-8209; Randy Levine, (718) 293-4300; Joe Lhota, (212) 465-6000; Jeff Kline, (216) 466-8055

The Beat: Quarterlies

26 May


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Live Nation Entertainment (NYSE: LVY)

Tuesday’s close: $13

First quarter activity: Traded as low as $9.12 on Jan. 4 and as high as $14.25 on March 8

Market cap: $2.2 billion

Comments: After completing its merger with Ticketmaster and enjoying an aggressive first quarter of growth, Live Nation Entertainment stock is trading slightly down from its March first quarter peak, and substantially down from its mid-April position at $16.

During its earnings call on May 11, CEO Michael Rapino reported that the company has seen concert attendance slip 3 percent over the same period last year. The company reported a loss of $112 million, or 76 cents per share, compared with $102.7 million last year. The company has 84 percent more shares outstanding, following its merger with Ticketmaster.

Company revenue increased about 49 percent to $723 million, mostly by combining the two firms. According to Rapino, concert attendance fell to 6.8 million from 7.1 million a year ago, while total spending per customer increased 2 percent to $59.71.

“During the first quarter, we moved forward with integrating our operations, streamlining our cost structure and strengthening our balance sheet,” Rapino said during the earnings call.  “We remain on track in eliminating redundancies and driving a minimum of $40 million in merger synergies across our operations in 2010. Our core concert and ticketing businesses are entering the busiest time of the year and show count and ticket sales globally remain on track to achieve our plan for 2010.”

Contact: Michael Rapino, (310) 867-7127

World Wrestling Entertainment (NYSE: WWE)

Tuesday’s close: $16.98

First quarter activity: Traded as low as $15.60 on Jan. 4 and as high as $18.04 on March 10

Market cap: $1.2 billion

Comments: Revenues totaled $138.7 million as compared to $107.8 million in the prior year. Operating income was $37.3 million as compared to $16.7 million in the prior year. Net income was $24.7 million, or $0.33 per share, as compared to $10.3 million, or $0.14 per share in the prior year.

During an investor call on May 6, chairman Vince McMahon said a big part of the company’s success was tied to moving the company’s marquee Wrestlemania event from April to March, placing it in the first quarter.

“WrestleMania XXVI attracted more than 70,000 fans and contributed profits of over $13 million for the second consecutive year,” he said. “We remain confident that we can achieve our targeted earnings growth and drive greater profits.”

WrestleMania XXVI contributed approximately $28.8 million of revenues this quarter. The results also reflect an infrastructure tax credit, which reduced depreciation and amortization by $1.6 million. In addition, the first quarter results included approximately $2.2 million of restructuring related expenses associated with layoffs that occurred in January 2009. North American revenues increased 28 percent while international revenues were up 33 percent.

Contact: Vince McMahon, (203) 352-8600

Madison Square Garden (NASDAQ: MSG)

Tuesday’s close: $21.89

First quarter activity: Traded as low as $18.89 on March 11 and as high as $22 on March 26

Comments: Earlier this year, Madison Square Garden was spun off by former owner Cablevision. Its first quarter 2010 revenues increased 9 percent to $306.5 million compared to the prior year period, primarily reflecting an increase in revenue from its media division and its touring shows revenues.

First quarter net income was $19.3 million compared to a loss of $1.9 million in the prior year period.

“Looking ahead, we are confident in the long term growth potential that our unique assets and integrated approach create for each of our three business segments,” CEO Hank Ratner said in a conference call on May 4. “Separately, we are pleased with our progress on the upcoming renovation of Madison Square Garden, which will transform the arena into a state-of-the-art facility and deliver positive returns for our shareholders in the years ahead.” — Dave Brooks

Contact: Hank Ratner, (212) 465-5800