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Project Showtime: Azoff, Scalpers And Live Nation

LOS ANGELES (CelebrityAccess MediaWire) — Before Live Nation and Ticketmaster agreed to attempt a merger, Irving Azoff was considering a pact with some of the nation's largest ticket scalpers in a plan to thwart their emerging rival, Live Nation by offering a share of the secondary ticket market to touring artists.

Hearken back to the closing days of 2008 – IAC/InterActiveCorp had spun off ticketing giant Ticketmaster into a separate entity, which then acquired Irving Azoff's Front Line Management, leaving Azoff at the helm of both firms. Promoter Live Nation had announced that they were launching their own in-house ticketing service with some help from European ticketing company CTS Eventim. Live Nation, with its broad international network of venues and exclusive deals with major touring artists was formerly Ticketmaster's largest client and their emergence as a competitor in the event ticketing arena was serious business, not only for Ticketmaster, but for independant secondary market ticket brokers as well.

To counter this, Azoff devised a strategy code-named "Project Showtime" to take a slice of the secondary ticket market revenue for himself and according to an article in the Wall Street Journal, Azoff experimentally bargained with a number of major players, including AEG Live, MSG Entertainment along with some of the largest independant brokers (read scalpers) to offer premium seats directly to scalpers with Ticketmaster and the artist all taking a share of the revenue from the inflated sale price of the ticket.

The deal would have seen 70% of the proceeds from the inflated sale price of the scalped tickets divided among Ticketmaster, the band and their reps while the brokers would keep the remaining 30%, the Wall Street Journal reported.

The plan would also have seen Ticketmaster acquire six of the largest independant brokers for $25 million a piece, giving them seats on Ticketmaster's board. According to the WSJ, representatives from Ticket (Boston); Barry's Tickets Service (L.A); Total Tickets (Ft. Lauderdale); Gold Coast Tickets (Chicago); Elite Ticket (New York City); and Alliance Tickets (Denver, Las Vegas and Seattle) attended a meeting at Azoff's Los Angeles office in 2007. Also attending the meeting were represenatitves from AEG Live and MSG Entertainment.

"I always knew we'd end up in a room together," Azoff reportedly told the assemblage at the meeting. "I just thought it would be a courtroom."

The plan got far enough along for a "trial run" to be conducted in the fall of 2007. Azoff provided the brokers with 500 seats at each of 20 different Van Halen concerts. People familiar with the agreement told the Wall Street Journal that the band netted approximately $1 million from the test run.

Ultimately, the deal didn't pan out and after months of negotiation, the various parties could not develop sufficient trust, particularly among Ticketmaster execs, who were wary of dealing with secondary market brokers who had long been rivals. Moreover, Azoff appaerently saw that a merger with Live Nation would accomplish many of the same goals.

"Ticketmaster continually explores new and viable revenue streams in both the primary and secondary marketplace on behalf of our clients and live event rightsholders, to maximize sales and capture the fair market ticket value for promoters, venues, teams and artists," a spokesman for Ticketmaster told the WSJ. Spokesmen for AEG Live and MSG Entertainment declined to comment. – CelebrityAccess Staff Writers