I'm going to look at Ticketmaster when it spins off from IAC/InterActiveCorp. I think there is a potential for a Joel Greenblatt-type undervaluation (see ch. 3 of this book). The thesis is:
- Spun-off companies in general tend to trade down.
- Ticketmaster will be saddled with $750mm in debt as it starts its independent life, which may scare away investors but, conversely, provides upside leverage.
- Ticketmaster is dominant in its industry, unlike most spinoffs. There appear to be high barriers to entry due to scale and required technology investment. I need to do more work on this
- Live Nation has announced it will start to compete with Ticketmaster beginning next year. This may also scare away Ticketmaster investors. It will be a good test of Ticketmaster's competitive position though. Bernard Arnault's struggles with the art auctioneer Phillips, de Pury confirmed the dominance of Sotheby's and Christie's. Live Nation may do the same.
Did you know that Jay Pritzker owned Ticketmaster from 1982 to 1993?