Ticketmaster buys out Irving Azoff's Front Line Management

Via Bloomberg:

Oct. 23 (Bloomberg) -- Ticketmaster agreed to buy a controlling stake in Front Line Management Group Inc., challenging Live Nation Inc. and adding musicians including Jimmy Buffett and the Eagles.

Ticketmaster, the largest U.S. ticket broker, will purchase the stake from Warner Music Group Inc. for $123 million in cash. Front Line co-founder Irving Azoff, who has managed the Eagles since 1974, will become chief executive officer of the renamed Ticketmaster Entertainment Inc., the West Hollywood, California- based company said today in a statement.

This is a really interesting move for Ticketmaster - and honestly, I'm not entirely sure what they're trying to achieve with it. Clearly, it gives them a steady source of income from something other than tickets - they now have a vested interested in artists themselves and their revenue streams.

This is definitely in response to Live Nation expanding into 360 degree music deals, and Live Nation's impending split from Ticketmaster to create their own ticketing system. But those deals are predicated on a lot of different revenue streams - live performance, album sales, licensing, merchandising, and quite a bit more. Ticketmaster is now taking in profits from any of the artists that were Front Line artists - which includes enormous names like Jimmy Buffett, Eagles, Guns n Roses, and others.

But what confuses me is what Ticketmaster is going to do with this responsibility - and what infrastructure they have in place to help Azoff. What can Ticketmaster get for Azoff's artists that he couldn't already get them? Is it simply because he'll have more financing in his pocket through Ticketmaster's coffers to sign more artists? Doesn't it seem a bit precarious to put somebody who has made his name in artist management in charge of the world's biggest ticketing company - a field where he has zero experience? And what can Azoff do for Ticketmaster, apart from sprucing up profits with takes from his artists? What real benefits does being in artist management offer for the ticketing company?

My guess is that Ticketmaster feels they're going to be able to exert a lot more control over what rooms Azoff artists play while touring - thus limiting them to rooms that use Ticketmaster, in a direct form of competition with the new Live Nation ticketing system. But this seems like a sort of backwards, difficult way of accomplishing that goal. It will also make it more difficult for Live Nation to sign artists that Azoff represents, if indeed they were interested in any of them for future 360 degree deals.

I'm very surprised by this news, and I'll be really curious to see what happens going forward as more details become apparent. Perhaps Ticketmaster has more plans that are not yet clear...