Live Nation gets down to (music) business

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Live Nation Inc., the concert promoter that recently signed deals with such high-profile artists as Madonna and Jay-Z, is flush with proceeds from the recent sales of assets. And it says it wants to spend the money, although the company is being a bit cagey about exactly how.

As part of its ongoing effort to focus on its core concert business, Live Nation
said Tuesday that it closed on the sale of its motorsports division for $205 million to Feld Entertainment, owner of the Ringling Bros. and Barnum & Bailey Circus as well as Ice Capades and Ice Follies.

The sale of the motorsports division, which produces hundreds of monster truck and motocross races each year, nearly complete’s Live Nation’s two-year divestiture program to pare the company down to a pure music industry player.

John Hopmans, Live Nation’s executive vice president of mergers and acquisitions and strategic finance, wouldn’t detail specific plans on what the company plans to do with the proceeds from the sale, which include $175 million in cash plus what the company describes as a ‘performance-based earn-out of up to $30 million.’

“There are no immediate plans for the money other than to reduce our debt and look at other properties or opportunities that might reinforce our core music business,” he said.

Since the company began selling its theater and sports assets -- including holdings in the U.S. and abroad -- it has collected $465 million in proceeds.

Over the same period, Live Nation acquired the House of Blues, concert promoters outside the U.S., and music merchandisers that produce items for the Beatles, Jimi Hendrix and Pink Floyd. The company posted increased revenue of $1.2 billion in the quarter ended June 30, up from $986 million in the same period a year ago. Net income fell to $1.2 million from $9.9 million, but still beat estimates of analysts, who had expected a net loss.

Shares rose 4.3% to $15.89 in after-hours trading, following the announcement.

-- Swati Pandey