Quarterly report pursuant to Section 13 or 15(d)

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

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CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
3 Months Ended
Mar. 31, 2012
CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS [Abstract]  
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
NOTE 6-CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS
 
Agreements with Liberty Media
 
In connection with the Merger Agreement, in February 2009 the Company entered into a stockholder agreement with Liberty Media and Liberty USA Holdings, LLC (the "Liberty Stockholder Agreement") regarding certain corporate governance rights, designation rights and registration rights with respect to the Company's common stock to be received by Liberty Media in the Merger. The Liberty Stockholder Agreement became effective upon consummation of the Merger. Among other things, subject to certain restrictions and limitations set forth in the Liberty Stockholder Agreement, Liberty Media has exercised its right to nominate two directors to serve on the Company's board of directors. The Liberty Stockholder Agreement also contains provisions relating to limitations on the ownership of the Company's equity securities by Liberty Media and its affiliates following the Merger and on transfers of the Company's equity securities and rights and obligations under the Liberty Stockholder Agreement following the Merger.
 
In February 2011, the Company entered into a subscription agreement with Liberty Media. Pursuant to the subscription agreement, in February and June 2011, the Company sold to Liberty Media 1.8 million and 5.5 million shares, respectively, of the Company's common stock for aggregate cash consideration of $18.8 million and $57.7 million, respectively.
 
Transactions Involving Directors
 
The Company has a non-employee director as of March 31, 2012 on its board of directors that is also a director and executive officer of Clear Channel. This director receives directors' fees, stock options and restricted stock awards as do other non-employee members of the Company's board of directors. Additionally, as of March 31, 2012, the Company has an employee director that is also a director of Clear Channel. From time to time, the Company purchases advertising from Clear Channel and its subsidiaries in the ordinary course of business.
 
The Company has a non-employee director as of March 31, 2012 on its board of directors that is also a director and executive officer of MSG and Cablevision. This director receives directors' fees, stock options and restricted stock awards as do 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 and/or operated by MSG and pays royalty fees 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 and its subsidiaries from time to time.  All of these transactions are entered into in the ordinary course of business.
 
The following table sets forth expenses incurred and revenue earned from the transactions noted above:
 
   
Three Months Ended
 
   
March 31,
 
   
2012
   
2011
 
   
(in thousands)
 
Director related party revenue
  $ 7     $ -  
                 
Director related party expenses
  $ 6,761     $ 366  
 
Transactions Involving Executives
 
ATC Aviation, Inc. ("ATC"), which is owned by Irving Azoff, owns an aircraft. Irving Azoff is the Company's Executive Chairman and Chairman of the board of directors.  An aircraft management and charter company, unrelated to either the Company or ATC, manages and operates the aircraft on ATC's behalf and charges market rates for the use of the aircraft when used by Mr. Azoff or other executives on Company business, a portion of which is paid to ATC. For the three months ended March 31, 2012 and 2011, the Company made payments totaling $0.7 million and $0.1 million, respectively.
 
The Azoff Trust was a party to the Second Amended and Restated Stockholders' Agreement of Front Line dated as of June 9, 2008, as amended (the "Front Line Stockholders' Agreement"). The Front Line Stockholders' Agreement governed certain matters related to Front Line and the ownership of securities of Front Line, including board designation rights, transaction approval requirements, share transfer provisions, and put and call rights. The Front Line Stockholders' Agreement also provided for an annual pro rata dividend to be paid to the stockholders as soon as reasonably practicable after the end of each fiscal year. The Front Line Stockholders' Agreement was terminated in connection with the first quarter 2011 acquisition of the remaining equity interests in Front Line.
 
In January 2011, the board of directors of Front Line declared a dividend payable in cash to the holders of record of Front Line common stock. This dividend was paid in January 2011 and totaled $20.1 million of which the Company received $15.0 million. The Azoff Trust received a pro rata portion of this dividend totaling $3.0 million. In connection with the January 2011 dividend, Mr. Azoff received a gross-up payment of $0.6 million. Prior to the payment of the dividend, FLMG made a loan to Front Line principally to fund the dividend, evidenced by a promissory note from Front Line to FLMG with a principal amount of $20.7 million and bearing interest at a rate of 4.5%, payable no later than December 31, 2011. This loan was paid off in the first quarter of 2012.
 
Other Related Parties
 
During the three months ended March 31, 2011, the Company paid $6.8 million for deferred consideration due in connection with an acquisition of a company owned by various members of management of one of the Company's subsidiaries. The acquired company holds the lease of a venue. There were no deferred consideration payments made during the three months ended March 31, 2012.
 
In January 2011, the Company sold a 49.9% noncontrolling interest in its clubs and theaters venue promotion business in Boston to a company partially owned by two employees of one of the Company's subsidiaries in exchange for assets and cash valued at $12.6 million.
 
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 and reimbursement of certain costs. As of March 31, 2012 and December 31, 2011, the Company has a receivable balance of $13.2 million and $13.3 million, respectively, from certain of these companies. 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.
 
   
Three Months Ended
 
   
March 31,
 
   
2012
   
2011
 
   
(in thousands)
 
Other related parties revenue
  $ 265     $ 566  
                 
Other related parties expenses
  $ 1,440     $ 3,578