Veritix, AXS join forces

Ticketing historically has been one of the most cutthroat and competitive sectors of the entire live entertainment industry. But the Veritix-AXS merger, an industry-changing deal announced last week, was borne out of a collective realization of how much the two companies had in common.

A year in the making, the deal combines the 4-year-old AXS with the 9-year-old Veritix, each created with a design of blending data, analytics and digital technology to create a smarter, more comprehensive live event operation that goes far beyond just ticketing.

“We realized pretty quickly how aligned our vision was,” said Bryan Perez, AXS president and chief executive. He will serve the same role in the newly merged company out of AXS’s Los Angeles headquarters. “We’re both looking to transform the entire life cycle of the live event, from event discovery to post-event. All the things the industry is asking for, both of us are doing now.”

The union, announced at last week’s Veritix Sports Facilities & Franchises conference in Santa Clara, Calif., also joins two companies that individually had each actively sought to present themselves to teams, properties and live content producers as a compelling alternative to Live Nation-owned Ticketmaster, far and away the largest player in the space. With more than $2 billion in combined sales, the merged Veritix-AXS is now poised to become the second-largest ticketing company in North America behind Ticketmaster.

“The industry is asking for the ability to use innovation as a tool to better engage fans,” said Sam Gerace, Veritix chief executive. Gerace will serve as an “accelerator” in the new entity and will lead operations out of Veritix’s existing base in Cleveland. “Together, we have enhanced our ability to deliver that.”

Financial terms of the deal were not disclosed. The combined entity, set to receive a new corporate brand name before the end of the year, will be co-owned by Cleveland Cavaliers owner Dan Gilbert, AEG and AXS partner Cirque du Soleil. Veritix and AXS combine to have relationships with more than a dozen NBA, NHL and MLS teams, along with the Detroit Lions and numerous collegiate entities.

Baseball is an empty spot in the joint portfolio, due in part to MLB Advanced Media’s ownership of competitor Tickets.com. But Perez and Gerace said they intend to add numerous clients across many sports in short order.

Initial reaction from industry observers was a mix of surprise and expectation, and the deal is anticipated to provide a welcome and heightened level of competitive pressure on Ticketmaster that ought to further the pace of product development.

“I think [this deal] tells you how competitive the industry is,” said Peter Luukko, Florida Panthers executive chairman and a veteran facility manager who previously oversaw the managing entity for rival ticketing companies Paciolan and New Era. “For years, there was just one provider going back to Ticketron and then Ticketmaster for many years. What it shows is there is room for a lot of competition. … I think it’s the nature of the ticketing business that has gone more from a service business to a marketing business. It’s a new game.”

Added Chris Granger, Sacramento Kings president and former executive vice president of the NBA’s team marketing and business operations group, “This is good for the industry. It’s an elegant way to make two strong companies even stronger.”

Discussions toward the merger began a year ago in Pittsburgh, mere minutes after Perez and Gerace appeared together on the opening panel of the 2014 Veritix Ticketing Symposium. Despite the lengthy negotiations, the deal’s closing last week still required a late flurry of activity. In the wee hours of the evening prior to last Thursday morning’s announcement, lawyers for Veritix and AEG sent documents back and forth hammering out final deal points. A press release regarding the merger received final internal approval barely two hours before the onstage conference announcement.

“It is not a coincidence we were looking to unveil this to the industry here at this event,” Perez said.

Ticketmaster declined to comment on the merger. But the mobile-based ticketing and fan interaction that lies at the heart of the Veritix-AXS union is also a key priority for Ticketmaster.

“I don’t know if there is anything more important that we’re doing right now as a technology company than developing around mobile,” said Cole Gahagan, Ticketmaster executive vice president of revenue, at last week’s Veritix Ticketing Symposium that preceded the Facilities & Franchises conference.

The Veritix-AXS alliance will seek to leverage several related event and facility technologies owned either in full or part by AEG, including mobile and online developer Carbonhouse, beacon developer Gimbal, cloud-based point-of-sale system operator Bypass, and consumer marketing platform AXS Advantage. Those technologies add to AEG’s existing status as a major producer and promoter of live entertainment. “We’re trying to change the paradigm of what a ticketing company actually is,” Perez said.

For Gilbert, the AXS deal extends a series of sports-related investments that also includes wall graphics outfit Fathead and helmet manufacturer Xenith. No staff cuts are expected in the immediate aftermath of the deal. Rather, a customer service center Veritix has operated in Dallas is now slated for expansion.

Staff writer Don Muret contributed to this report.