Ticketmaster and Live Nation, which hope to merge early next year, both released their Q3 2009 earnings on Monday afternoon. And both companies weathered a difficult storm.

Ticketmaster's revenue was up 3% to $349 million in Q3 2008 versus the previous year. Live Nation's revenue improved 13.8% over the previous year, rising to $1.81 billion, but it recorded a lower net income.

Ticketmaster's ticketing revenues dropped 14% to $292.1 million in the quarter ending Sept. 30. The loss of Live Nation's volume accounted for 2.5 million of the 3.9 million decline in tickets sold. Average face value of ticket dropped about 4%. Concert ticket volume was down 20% versus the prior year. Arts & Theater was down 6% and Family was down 10%. Sports was up 3%. The company said it has seen improved ticket volume trends in nearly all categories in October and November of 2009.

Ticketmaster's Artist Services division generated $56.4 million in Q3. That amount more than made up for the big drop in ticketing revenues, but was down 16% from the prior year when Front Line was a standalone entity.

Paperless ticketing received a great amount of attention during the earnings call, and in the earnings press release. Some venues have pushed back a little, but Ticketmaster Entertainment CEO Irving Azoff characterized clients' opinion on paperless ticketing as "almost a landslide in favor of it."

Mobile fits into the company's plans to expand beyond tickets. "I can't wait for the day when we can sell a lot more than that," Azoff said. In response to an analyst's question about mobile phones and smart phones, Azoff said Ticketmaster is looking at music delivery and sale of merchandise through mobile apps.

The best indication of Live Nation's continued long-term strategy was an absence of glaring mistakes or painful losses. Non-core assets were sold off, fewer capital expenditures were made, traffic to LiveNation.com was increased, new ticket-selling tactics were taken and the best was made of a bad economy. At the end of the quarter, Live Nation was cash-flow positive but has yet to experience the kind of traction it expects will come from its strategy. The company is certainly not sinking, but one wonders if this low-margin business will finally do more than merely tread water in 2010.

For the quarter ending Sept. 30, Live Nation's revenue improved 13.8% over the previous year, rising to $1.81 billion. Most importantly, it put cash on the balance sheet. Net income was $69.2 million, down considerably from $138 million in Q3 last year. Operating income was $115 million, about double the same period last year. For the nine-month period ending Sept. 30, Live Nation's revenue is up 3.7%, but a $100 million net gain in Q3 2008 turned into a $60 million loss this year. So far this year the company has incurred $26.5 million in acquisition transaction expenses.

Through September, Live Nation sold 816,000 tickets in North America through its "No Service Fee Wednesdays" promotion. LiveNation.com, which represents the improved margins of self-ticketing, continued to grow in the quarter. The company sold 10.6 million tickets through LiveNation.com through September -- 3.0 million of those in Q3.

The impact of the recession can be seen in just a few key metrics. Total attendance rose 12% to 19.55 million. Total revenue per attendee was up 0.6% to $90.18. Ancillary revenue per attendee for North America music amphitheaters was up 3.3% to $17.58. Sponsorship revenue is up 4.4% year to date. In spite of these improvements, income from continuing operations and net income were both down compared to Q3 2008.

Last week, Live Nation completed the sale of its U.K. theater assets to The Ambassador Theatre Group. That divestment continued the company's trend of selling off non-core businesses to focus on music. Part of the proceeds will be used to pay down its term loans.

Although the company thought sponsorships may have been down this year, it has been a strong aspect of the Live Nation's business. "We don't have any big surprises on any big category," said Michael Rapino, president/CEO of Live Nation.

Premium seats (boxes purchased by local companies, for example) were flat. National sponsorships were also flat. Local was down slightly ($40 million to $46 million). International sponsorships, on the other hand, have had a very good year.

Next year is already looking good, as Rapino pointed to a high number of tours lined up for 2010. "The bands are lined up early," he said.

Live Nation and Ticketmaster have emphasized cost cutting this year. Ticketmaster says it is on track to save $50 million in fixed costs in 2009. Live Nation pointed to its ability to lower variable show costs -- not talent-related costs -- in its cost-cutting efforts. In addition, Live Nation said it remains on pace to cut capital expenditures by 70% this year.

Rapino and Azoff both addressed the companies' proposed merger in their respective earnings calls. Rapino expressed a desire for the high margins and solid cash flows of Ticketmaster's artist management division.

"It's a great business for us to diversify and grow our overall margin," Rapino said. Strategically, he added, Live Nation will benefit from the better environment afforded by being closer to the artist. In addition, the merger will help the company's LiveNation.com strategy by marketing to consumers in a more unique way, according to Rapino.

Azoff said Ticketmaster is "encouraged" by the ongoing discussions with regulators. Both executives said they expect the deal to close in Q1 2010.

The two companies may be required to offer concessions to regulators worried about competition in the ticketing market. Last week, the UK Competition Commission postponed until January its decision on the proposed merger.

Click here for Ticketmaster's Q3 2009 press release, and here for Live Nation's Q3 2009 press release.