Live Nation Finishes Front Line Mgmt. Acquisition
February 7, 2011 at 11:21 AM (PT)
LIVE NATION ENTERTAINMENT has acquired substantially all of the remaining equity stake in IRVONG AZOFF's FRONT LINE MANAGEMENT GROUP that it did not previously own for $116.2 million in cash and stock. The equity interests were formerly owned by IRVING AZOFF and MADISON SQUARE GARDEN.
The cash portion of the transaction totaled $56.5 million and was funded with cash on hand. The remaining $59.7 million was paid using newly-issued shares of LIVE NATION common stock. Of the total shares issued, Mr. AZOFF received 1.8 million shares of common stock and MADISON SQUARE GARDEN received 3.9 million shares of common stock.
"Through this transaction we will further simplify and consolidate our operating structure," LIVE NATIONS Pres./CEO MICHAEL RAPINO said. "By acquiring full ownership of FRONT LINE, we expect to benefit from substantial savings related to cash taxes, the elimination of the dividend and operating synergies resulting in an increase in our free cash flow in excess of $20 million annually. FRONT LINE is a tremendous asset and a key component of our live entertainment and marketing platform. We look forward to Irving's ongoing contributions as we continue to focus on increasing the growth potential of our combined operations."
Additionally, the company changed its Board of Directors. IRVING AZOFF has been appointed Chairman of the Board, replacing JOHN MALONE who stepped down from the Board. In addition, LIBERTY MEDIA CORP. CEO GREG MAFFEI has joined the Board and has been named Chairman of the company’s newly-formed Executive Committee.
"I am excited to assume the role of Chairman, and on behalf of the entire Board of Directors would like to thank JOHN MALONE for his service and welcome GREG MAFFEI," AZOFF said. "FRONT LINE is a valuable part of our integrated entertainment, marketing and eCommerce model and this transaction further strengthens our ability to build on the unique relationship between artist and fan. In addition to my broader responsibilities at LIVE NATION, I will continue to operate FRONT LINE and ensure we continue to provide services that are in the best interests of our wonderful roster of artists. Moving forward we remain focused on advancing FRONT LINE by signing new artists, strengthening our management team through the addition of proven industry managers and expanding our content distribution globally."