Live Nation settles class-action lawsuit over fees, reduces earnings estimate
The lawsuit, originally filed by two individual plaintiffs in Los Angeles Superior Court in 2003 and granted class-action status in September, accused Ticketmaster of misleading customers when it tacked on $14.50 to $25 in delivery fees. The suit alleged that Ticketmaster suggested that the fees simply covered the cost of delivering the tickets, but were in fact designed to boost the company's profit.
Live Nation, which merged last year with Ticketmaster to create an entertainment powerhouse, agreed to settle the lawsuit in December, setting aside $22.3 million to pay for legal fees and issue refunds to affected customers. It reduced its expected fourth-quarter earnings by the same amount, plus $4.9 million to "restructure its North American concerts business," according to a report filed Wednesday with the U.S. Securities and Exchange Commission.
As a result, Live Nation said it expects its fourth-quarter operating income to be $362 million, down from its previous estimate of $389 million. The company is expected to report its earnings Feb. 28.
The company, which is suing its insurance carrier for not covering more than $4 million in legal expenses incurred in the case, admitted no wrongdoing, but said Ticketmaster would "make certain changes to disclosures on its website."
-- Alex Pham