Capital Centre owner Abe Pollin has ended a costly -- and at times highly personal -- effort to build a national computerized ticketing company by selling the company to his chief rival.
Landover-based Ticketron, which Pollin bought with others only 15 months ago for $16 million, said yesterday that it has agreed to be acquired by Ticketmaster Corp. of Los Angeles in a buyout that will combine the nation's two largest sports- and concert-ticketing services.
Terms were not disclosed, but Pollin and other Ticketron investors, including the Washington merchant banking firm Carlyle Group, are expected to receive cash and a minority ownership stake in Ticketmaster, according to people close to the deal. Both firms are privately held; Ticketmaster is owned by the billionaire Pritzker family of Chicago.
The deal, which was signed on Monday, is subject to an antitrust review by the Department of Justice. But representatives of both companies said yesterday they did not consider the combination of the two market leaders to be anticompetitive.
The sale of Ticketron ends Pollin's quest to compete with Ticketmaster, with whom he has feuded publicly. As the Ticketmaster franchise holder for the Washington area in the 1980s, Pollin and Ticketmaster's chairman, Fred Rosen, argued over the terms of their contract. In 1989, Pollin filed a lawsuit against Rosen, the first Pollin had ever filed in his long business career.
The suit has since been settled, but bitterness between the two apparently lingered. "We clearly don't like each other," said Rosen of Pollin in an interview with The Washington Post last year.
Said Pollin at the time, "There is certainly enough room for two major companies in this business. Competition made this country great." The two men were unavailable for comment yesterday.
Pollin's decision to sell Ticketron is also ironic given the heavy investment he and Carlyle made in upgrading Ticketron's computer system and outlet network in the past year. But executives of both companies decided a merger made sense because the soft entertainment market and cutthroat competition between the companies limited their growth opportunities, said a source familiar with the talks.
Initially, Ticketron proposed buying Ticketmaster, but Ticketmaster did not want to sell, said the source.
Rather than competing directly for consumers' business, the companies instead pay upfront fees to event promoters and arena officials, who in turn grant the company the exclusive right to sell tickets via phone, mail or through outlets located primarily in department stores and shopping malls. The companies charge consumers a fee -- between $1 and $4 per ticket -- that is split with the event promoters.
Ticketron President Ben Liss said the merger could lead to lower ticketing fees for consumers because the combined company, no longer facing competition, could make smaller upfront payments to promoters. In the past, however, Ticketron officials have argued that a single dominant ticketing service has little incentive to hold down ticketing fees.
Ticketron, which was a pioneer in the field but lost its edge under its former owner, Control Data Corp., has 750 outlets in 18 states and Canada. Ticketmaster has about 1,300 outlets in 40 states.
Ticketron is the dominant computer ticket agency in the Washington area, largely because Pollin owns or manages several of the area's major arenas and two of its professional sports franchises, the Washington Bullets basketball team and the Capitals hockey team. In addition to the Capital Centre, Ticketron handles the Baltimore Arena and Patriot Center at George Mason University, both of which are managed by a Pollin-owned company.