UPDATE: Ticketmaster, Live Nation Announce $2.5 Billion Merger Into Live Nation Entertainment

imageThere were reports that the two ticket vendors had merger plans, but now it’s official: Ticketmaster and Live Nation (NYSE: LYV) have announced the deal. It’s a tax-free, all stock merger with a combined value of approximately $2.5 billion, and the new entity will be called Live Nation Entertainment. The deal is subject to the usual legal issues, including regulatory review, and there’s sure to be some pressure against it from the music industry and others who see this consolidation as a threat. Release.

Management: A lot of ego to fit into one space … Barry Diller, chairman of Ticketmaster Entertainment, will be chairman of the board with Michael Rapino, now CEO of Live Nation, as CEO and president, and Irving Azoff, now CEO of Ticketmaster, as executive chairman and CEO of Front Line.

The name change: Dropping the Ticketmaster brand in favor of Live Nation could be the first step toward distancing the new company from the negative press surrounding the long-standing ticketing giant. A WSJ source said management wants to diminish the impression that the “company is out to gouge” consumers — as concert-goers have long complained about the service fees Ticketmaster tacks on to ticket prices.

Rory adds: Not a lot of groundbreaking information from the Live Nation/Ticketmaster call on the deal. But Barry Diller (chairman of the new entity), Michael Rapino (CEO) and Irving Azoff (executive chairman) did offer some additional detail on the transaction.

More after the jump

— Deal should close in the second half of 2009, pending Department of Justice approval.

— The new entity is projecting at least $40 million in cost savings in the first year following the close of the deal.

— Combined company will generate $6 billion in revenue.

Rapino, Diller and Azoff also talked (sort of) about how the deal would benefit consumers. They said that technology investments would allow for paperless ticketing and afford fans