Cable TV company USA Networks Inc. plans to merge its Ticketmaster subsidiary with Ticketmaster Online-CitySearch, recombining the subsidiary's phone and retail channels with the spin-off's massive Web presence.
"The Ticketmaster franchise is one that lends itself to significant growth opportunities both domestically and abroad, and getting all of the assets under one roof will put us in a position to capture all of those opportunities," says Tom McInerney, CFO of Ticketmaster Online-CitySearch.
Ticketmaster, the world's leading offline ticketing company, spun off its online operations in August 1998 when it merged with CitySearch, forming Ticketmaster Online-CitySearch (TMCS). Today, it's one of the largest E-commerce companies on the Internet, combining its ticketing business with CitySearch, an online local information and services network, and Match, an online personals company.
By selling Ticketmaster Corp. to TMCS in exchange for 52 million TMCS class B shares, USA will have a 68% stake in the new ticketing company, which will be known simply as Ticketmaster. The deal is valued at $556 million based on Tuesday's stock closing price of $10.86. The merger also brings a number of personnel changes: John Pleasance, CEO of TMCS, will hold the same position in the new company; Terry Barnes, CEO of Ticketmaster, will become co-chairman of the new company, along with Barry Diller, CEO of USA Networks.
Analysts believe the merger will improve business. Says Erin Dailey, an analyst with RedChip.com, "It brings together two strong companies and two brand names."