Ticketmaster Entertainment Inc. reported a 78 percent drop in first-quarter profit Tuesday as ticketing sales fell and a distribution agreement with merger partner Live Nation ended. The company also incurred costs related to the upcoming merger.
Ticketmaster, the world's largest seller of tickets to concerts and shows, earned $7.2 million, or 12 cents per share, compared with a profit of $32.7 million, or 58 cents per share, in the year-ago period.
Adjusted for merger-related costs and a tax charge because of changes in California law, profit was 21 cents per share.
Revenue rose by 7 percent to $373.8 million from $349 million, buoyed by acquisitions including artist management firm Front Line Management Group Inc.
But ticketing revenue fell by 3 percent to $339 million. Because of a strengthening dollar, transactions done in other currencies translate into fewer dollars. That was only partly offset by a $17.4 million boost from acquisitions, including those of ticketing companies TicketsNow and Paciolan.
West Hollywood, Calif.-based Ticketmaster said it sold 6 percent fewer tickets in the quarter, to 34.8 million. The end of a long-term partnership with concert promoter Live Nation on Dec. 31 cut ticket volume by 2.4 million.
Live Nation has since launched its own ticketing platform, though it agreed in February to merge with Ticketmaster in a deal expected to clear the U.S. Justice Department in the second half of the year.
The merger has run into problems over fears the new company would have a near monopoly over major U.S. concert ticket sales.
About a week before the merger announcement, Ticketmaster faced the ire of thousands of Bruce Springsteen fans, who complained that they were redirected to ticket reseller TicketsNow to buy marked-up tickets when cheaper face-value tickets were still available through Ticketmaster.
The company also settled an investigation by New Jersey's attorney general by agreeing to sever online links between TicketsNow and Ticketmaster for a year.
"Ticketmaster does know it is not on the side of the angels in the minds of consumers," Chairman Barry Diller said Tuesday in a conference call with analysts. "That is something that the company very much wants to change."
He said the company has made mistakes, including the handling of the Springsteen sales.
But Ticketmaster was "falsely accused of bait and switching," Diller said. The company has said that a computer glitch was the cause of the problem.
Looking ahead, Diller said Ticketmaster believes in a transparent and open marketplace, a "Wild West of technology-enabled ticketing" that needs rulemaking.
Democratic Sen. Chuck Schumer of New York introduced a bill in April that would allow ticket resales only after face-value tickets have been on sale for two days.
In the quarter, domestic revenue was flat at $238.6 million. Excluding acquisitions, revenue fell 8 percent to $207.2 million as a 9 percent decline in ticketing volume was offset by a 1 percent increase in average ticket revenue.
International revenue fell 8 percent to $100.4 million, because of a 5 percent drop in ticket volume and a 6 percent decline in ticket revenue from changes in foreign exchange rates.
Excluding the currency impact, international revenue was up 13 percent, with stronger performances in the U.K. and Ireland due to the Michael Jackson comeback and U2 concerts.
Shares of Ticketmaster were up 16 cents, or 2.4 percent, to close Tuesday at $6.82.