Live Nation Entertainment, Inc. (NYSE:LYV) has just announced that it beat CTS Eventim AG (ETR:EVD) in a court battle. Trading on the company’s shares was halted briefly right before it announced the news, but soon after the big announcement, shares surged by as much as 9 percent.
The Case Against Live Nation Entertainment
The company announced the legal win in a press release distributed through PR Newswire. It said that the arbitrator who was handling the case ruled that the company’s termination of its software license agreement in June 2010 was valid. As a result, Live Nation Entertainment, Inc. (NYSE:LYV) isn’t liable to CTS Eventim AG (ETR:EVD).
The lawsuit was in connection with an agreement which existed between the two companies prior to June 2010. The agreement dealt with ticketing software, and it was filed by CTS Eventim AG (ETR:EVD) in April 2010 with the International Court of Arbitration of the International Chamber of Commerce.
The site 24/7 Wall St reports that the complaint alleged Live Nation didn’t validly terminate that agreement. CTS was seeking unspecified damages, claiming that Live Nation must pay it a fee, whether or not it used CTS’ ticketing platform.
Live Nation argued that CTS breached the agreement by not providing ticketing platforms which met European and North American standards. Live Nation had said recently in its 10-Q filing that if CTS won the case, the damages awarded might be “substantial.”
Implications For Live Nation’s Win
Live Nation Entertainment, Inc. (NYSE:LYV) owns Ticketmaster, and this legal win removes the liability to the profitable unit, clearing the way for greater profits at Ticketmaster. CTS Eventim is one of Ticketmaster’s biggest competitors, reports Bloomberg Businessweek’s Andy Fixmer.
“We are very pleased with, but not surprised by, today’s ruling,” said Live Nation Entertainment President and CEO Michael Rapino in a statement. “The arbitrator’s final decision vindicates Live Nation’s steadfast position that we justifiably terminated our contract with CTS.”
Live Nation Entertainment’s Stock Price
Shares of Live Nation Entertainment, Inc. (NYSE:LYV) have risen steadily since the beginning of the year after hovering around the $10 per share mark for much of 2011 and 2012. In April 2010, the company’s stock shot up over $15 per share, which where it is as of this writing. By August of the same year, it had dipped below $10 per share.
