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SiriusXM could acquire Live Nation, says analyst

Satellite radio giant Sirius XM has been tipped to acquire Live Nation after completing its merger with Pandora.

BTIG research analyst Brandon Ross, who said over two years ago that a SiriusXM-Pandora merger was inevitable, has urged Liberty-owned Sirius to “truly embrace digital” as streaming services continue to grow in popularity.

He added that it should begin by using Pandora, a music streaming and internet radio service, to build its subscriber base to its current use of a free trial ecosystem.

According to Billboard, the analyst said that he “never believed” in a standalone Pandora but that it has huge potential value as a joint venture for its new owner, given that it has “an engaged audience on mobile which could be useful in driving active users to another business,” and while “it has tried and failed at ticketing in the past and brought in subscription streaming… in our view, upselling into Sirius subscriptions is a better endgame given [SiriusXM’s] economics.”

Furthermore, Ross states that SiriusXM’s all-stock acquisition of Pandora means it holds an abundance of cash that could be used for more ROI generative investments, and that Live Nation, which is 34 per cent owned by Liberty, would make an ideal fit.

“We believe Liberty president and chief executive, Greg Maffei, desires to not only collapse the [SiriusXM] share structure and take control of [SiriusXM]’s cash flow but also to combine Sirius and Live Nation into a single music distribution company. We believe a Sirius/LN deal will come sooner rather than later,” Ross said.

Ross adds that through this deal between the two music giants, Pandora could leverage its brand relationship to sell advertising and sponsorships. Its masses of user data would also hold huge benefits for Live Nation’s live business.

“Live Nation could use this data to help plan and promote/market tours,” Ross said. “Meanwhile, Spotify is using its data as a chip in label negotiations and expects it to unlock significant margin opportunities. Could Pandora and Live Nation do the same in the U.S.? Other opportunities include an owned platform for Live Nation to further its media/video ambitions, and the ability to offer artists a place to promote their music.”

Image: Amanda Mills