Live Nation Continues World Domination

By Julene McCoy in Arts & Entertainment on Jul 18, 2006 3:10PM

This week Live Nation agreed to purchase the House of Blues chain for a cool $350 million. What does this mean to us? No one knows yet as neither company is commenting about what changes the acquisition may bring.

Jim Derogatis helps us understand what it could mean for Chicago in terms of market domination by one company ala Starbucks or Microsoft. He also explains how Chicago is unique in that we still have Jam Productions battling this Goliath, unlike many other cities left without independent promoters.

Live Nation spun off from the Clear Channel behemoth last December with an initial share price of $11 that has grown to about twice that amount in a little over six months. This is quite the feat since the concert business is a very low-margin business – Live Nation’s net profit was below 1% for the first nine months of 2005. In this article, an analyst wonders how long high ticket prices combined with overall lower attendance can keep the company profitable in a world where more and more of us download our music for less money than ever before. His take is that it will take a lot of smaller acts touring more often to make up for the overall lower attendance at concerts and income from album sales. Hmmm … how does a company get in on that action? How about buying the smaller capacity venues? Check that off the list for Live Nation with the HOB acquisition.

In other Live Nation news, they also bought a majority stake in Trunk Ltd., an apparel company that has licensing rights for music stars such as Blondie, Pink Floyd, and the Rolling Stones. It looks like Live Nation isn’t too ashamed to get you coming and going, huh?