Live Nation cuts profit forecast due to lawsuit
Thursday, January 27, 2011
LOS ANGELES (AP) — Concert and ticketing giant Live Nation Entertainment Inc. on Wednesday cut its annual profit forecast by 7 percent after agreeing to settle a class-action lawsuit against its Ticketmaster division over online fees charged to customers.
The company, which merged with Ticketmaster last year, said in a securities filing that its adjusted operating income will be about $362 million for the year through December, down from the $389 million it had earlier estimated.
The charges include $22.3 million to settle the class-action suit against Ticketmaster over ticket-delivery and order-processing fees for online customers and $4.9 million for restructuring its North American concert business.
The company said the new forecast also includes a $6 million negative impact from foreign exchange movements.
Live Nation said that it did not acknowledge wrongdoing in the lawsuit, filed in 2003, but agreed to pay the plaintiffs’ legal bills and give certain customers cash refunds or discounts off future ticket purchases. It will also change certain disclosures on its website, the filing said.
The company expects to file the settlement with a court, seeking its approval, around the end of February. It declined to comment further.
Live Nation shares rose 6 cents to close at $10.70 in the regular session Wednesday before it announced its reduced outlook. The company is due to report its fourth-quarter earnings on Feb. 28.