March 25, 2009

By By Glenn Peoples, Nashville

After last week's disappointing Q4 earnings release, Standard & Poor's Rating Service lowered by one level the credit rating of Ticketmaster Entertainment. From BusinessWeek.com:

"The downgrade reflects Ticketmaster's weak fourth-quarter operating performance and rising debt leverage," said Standard & Poor's credit analyst Hal Diamond.

He added that growth in the ticket resale business will not likely be able to overcome a decline in primary ticket sales volume because of the recession.

He also warned that Ticketmaster may pull back from the secondary ticketing market, which has gotten it into hot water on concerts from Bruce Springsteen to Michael Jackson, "which would increase its dependence on the mature and cyclical primary ticket market."

On the other hand, at least one person made a bet on TME. Greenlight Capital recently took a 5.2% stake in TME stock. At $4 per share, the market may be too pessimistic on both the proposed TME-Live Nation merger and TME's ability to safely navigate an economic downturn.

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