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CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
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Dec. 31, 2014
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| CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS |
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
Transactions Involving Principal Owners and Directors
The following table sets forth revenue earned and expenses incurred from the transactions noted below:
Agreements and Transactions with Liberty Media
Two current members of our board of directors were originally nominated by Liberty Media pursuant to a stockholder agreement.
The Company provides ticketing services to a sports franchise owned by Liberty Media and pays royalty fees and non-recoupable ticketing contract advances to the sports franchise. The Company also receives transaction fees from the sports franchise for tickets the sports franchise sells using the Company’s ticketing software. From time to time, the Company purchases advertising from Sirius XM Satellite Radio, a subsidiary of Liberty Media. These transactions are entered into in the ordinary course of business on an arms-length basis.
Relationship with Microsoft
The Company has a non-employee director who became an executive of Microsoft Corporation as of September 2, 2014. This director receives directors’ fees, stock options and restricted stock awards on the same basis as other non-employee members of the Company’s board of directors. From time to time, the Company purchases software licenses, advertising and other products from and provides sponsorship and advertising opportunities to Microsoft Corporation and its subsidiaries in the ordinary course of business on an arms-length basis.
Relationship with Clear Channel
For purposes of governing certain of the ongoing relationships between Clear Channel and Live Nation at and after the Separation, Clear Channel and Live Nation entered into a tax matters agreement, among other agreements.
The Company has a non-employee director who was also a director and executive officer of Clear Channel until July 2013. This director receives directors’ fees, stock options and restricted stock awards on the same basis as other non-employee members of the Company’s board of directors. From time to time, the Company purchases advertising from Clear Channel and its subsidiaries in the ordinary course of business on an arm’s-length basis. The Company also has various lease and licensing agreements with Clear Channel for office space. These transactions are included in the table above through July 2013.
Transactions with Madison Square Garden
The Company had a non-employee director until February 2013 who is also a director and executive officer of Madison Square Garden (“MSG”) and Cablevision Systems Corporation. This director received directors’ fees, stock options and restricted stock awards on the same basis as other non-employee members of the Company’s board of directors. From time to time, the Company promotes events at venues owned and/or operated by MSG and pays rental fees and co-promote fees to MSG and its subsidiaries. In addition, the Company provides ticketing services for venues and sports franchises owned or operated by MSG and pays royalty fees and non-recoupable ticketing contract advances to MSG and its subsidiaries. The Company also receives transaction fees from MSG and its subsidiaries for tickets MSG sells using the Company’s ticketing software. Finally, the Company purchases advertising from Cablevision Systems Corporation and its subsidiaries from time to time. All of these transactions are entered into in the ordinary course of business on an arms-length basis and are included in the table above through February 2013.
Transactions Involving Executives
ATC Aviation, Inc. (“ATC”), which was owned by the Company’s former Executive Chairman who resigned on December 31, 2012, owned an aircraft. The Company was charged market rates for the use of the aircraft when used by the former executive or other executives on Company business, a portion of which was paid to ATC. These arrangements are no longer in effect following the executive’s departure from the Company. For the year ended December 31, 2012, the Company made payments totaling $1.9 million.
During 2012, the former executive noted above had a minority ownership interest in an entity that subleases office space from the Company. Rent charged by the Company for the year ended December 31, 2012 totaled $0.7 million.
Trust Note
For the year ended December 31, 2012, the Company recorded $11.7 million of acquisition expenses related to the Trust Note as a component of corporate expenses. The Trust Note was paid in full in December 2012 in connection with the resignation of the executive affiliated with the trust that held the Trust Note.
Transactions Involving Equity Method Investees
The Company conducts business with certain of its equity method investees in the ordinary course of business. Transactions relate to venue rentals, management fees and sponsorship revenue. Revenue of $6.5 million, $2.6 million and $2.3 million were earned in 2014, 2013 and 2012, respectively, and expenses of $5.2 million, $7.5 million and $6.8 million were incurred in 2014, 2013 and 2012, respectively, from these equity investees for services rendered or provided in relation to these business ventures.
Other Related Parties
The Company conducts certain transactions in the ordinary course of business with companies that are owned, in part or in total, by various members of management of the Company’s subsidiaries or companies over which it has significant influence. These transactions primarily relate to venue rentals, concession services, equipment rentals, ticketing, marketing and other services. The following table sets forth expenses incurred and revenue earned from these companies for services rendered or provided in relation to these business ventures. None of these transactions were with directors or executive officers of the Company.
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