SBD/May 10, 2011/FinancePrint All
Groupon and Live Nation Entertainment yesterday announced that they have formed a joint venture to develop a new online ticketing marketplace, GrouponLive. The new channel will serve as a local resource for Live Nation events, including sports games and concerts, as well as for clients of Live Nation’s global ticket business, Ticketmaster (Groupon). In L.A., Pham & Wong note Live Nation and Groupon are “hoping to boost concert attendance in a hobbled economy." GrouponLive, expected to launch in June, is "aimed at easing both the perennial problem of filling empty seats at concerts and sporting events.” Groupon and Live Nation hope to "attract bigger crowds by offering discounts to events for which demand may be soft.” Live Nation President & CEO Michael Rapino said, "There will be consumers who will wake up each morning and go to GrouponLive who otherwise wouldn't have heard of the event. This incremental sale from new consumers will outweigh any cannibalization that could occur. This is about volume. The more tickets we sell, the more everybody makes." Pham & Wong write the venture is “both novel and risky in that the sporting and concerts industries historically are loath to offer discounts for fear of alienating avid fans who wait in line and pay full price for their tickets” (L.A. TIMES, 5/10). In N.Y., Garett Sloane notes users “will have to opt in to receive the event notices, and the deals will blast out locally as with any Groupon offer.” Financial terms of the deal were not disclosed, "such as whether Chicago-based Groupon will get its usual 50 percent cut of sales” (N.Y. POST, 5/10).
Retailer Canadian Tire yesterday announced that it has reached a deal to acquire The Forzani Group, Canada's "largest sportswear retailer," for C$771M, or C$26.50 a share, according to Dana Flavelle of the TORONTO STAR. If completed, the deal "would create a chain of 1,000 sporting good stores, including Forzani's various brands and Canadian Tire's same-name stores." Canadian Tire said that Forzani "would continue to operate its own stores under its own brands," which include Sport Mart, National Sports and others. Canadian Tire execs said that there is "very little overlap between the two retailers." More than 70% of Forzani's sales are "athletic clothing and footwear, with the balance in sporting goods that complement Canadian Tire's assortment." The companies said that the agreement is "conditional on two-thirds of Forzani's shareholders agreeing to the purchase and is also subject to the approval of the federal Competition Bureau" (TORONTO STAR, 5/10). Sources said that the deal was "partly motivated by the prospect of greater competition from U.S. retailers -- some of whom, like Target Corp., have already announced their intention to open Canadian stores, while others, such as Dick's Sporting Goods Inc., are said to be considering it." The GLOBE & MAIL's Marina Strauss reports Canadian Tire "will bring back Michael Medline, one of its top executives, who left the company last fall, to spearhead the integration of Forzani into the company" (GLOBE & MAIL, 5/10). Forzani brands include Sport Chek, Sport Mart, Atmosphere, National Sports, Athletes World and Hockey Experts. The company's "franchises include Sports Experts, Intersport, Nevada Bob's Golf and Fitness Source" (CALGARY HERALD, 5/10).