S&P changes ratings on Ticketmaster, Live Nation

CHICAGO - Standard & Poor's Rating Services said Wednesday it has adjusted its ratings for ticketing company Ticketmaster Entertainment Inc. and concert promoter Live Nation Inc. to reflect the two companies' proposed merger.

S&P put West Hollywood, Calif.-based Ticketmaster's ratings, including its "BB" junk corporate credit rating, on negative CreditWatch, citing the likelihood that the deal will increase Ticketmaster's debt leverage.

The firm, meanwhile, placed its "B" corporate credit rating, also a non-investment grade rating, for Beverly Hills, Calif.-based Live Nation on CreditWatch positive, saying the deal would boost that company's debt burden.

"The rating action is based on the expected changing financial risks from the merger," said Standard & Poor's credit analyst Andy Liu.

The analyst suggested it's unclear whether the combined company would be able to generate "meaningfully positive discretionary cash flow, especially with consumer discretionary spending and corporate sponsorship under pressure from the recession."

Live Nation and Ticketmaster announced Tuesday they agreed to combine the companies under an all-stock deal.

The merger would match the world's dominant ticket seller, Ticketmaster, with Live Nation, which was once it's biggest client and is the world's No. 1 concert promoter.

Critics of the merger have raised potential antitrust issues, with some saying a merger would create an unfair monopoly in the ticket-selling business. The Justice Department has said it will investigate the proposed tie-up.

Live Nation shares fell 83 cents, or 17.2 percent, to close at $3.99 on Wednesday, but jumped 58 cents to $4.58 after-hours. Ticketmaster shares shed $1.14, or 18.5 percent, to finish at $5.01.

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