Philadelphia-based SMG operates more than 200 major venues around the US including Chicago's Soldier Field, Houston's Reliant Field, The Superdome and the Bill Graham Civic Auditorium. The two companies expect that Live Nation will sell more than 25 million tickets for SMG over the course of the agreement, amounting to an estimated $50 million in ticket fees.

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As Live Nation brings its ticketing system into play for SMG, the two companies hope that it will allow SMG to enhance their offerings. The state-of-the-art ticketing system will also enable SMG clients to offer a host of additional opportunities to sponsors and guests while allowing greater control over customer data, create enhanced ticket-based concert products and capitalize on expanded distribution channels and sponsorship opportunities.

Live Nation's dominant position in the touring business most assuredly helped them to ink this deal and here, the utility of their artist strategy becomes frankly apparent. Through exclusive contracts with major touring artists, Live Nation can offer tourdates by top-tier performers to venue operators the sign with Live Nation, or steer them to competitors if the venue operators prove uncooperative.

"This alliance is unique because it will enhance our ability to drive content to our venues." noted SMG President Wes Wesley in a statement.

"This is the next step in our strategic plan to capitalize on our leadership in live music and complete our direct connection to the fan," said Jason Garner, Live Nation's CEO of North American Music. "We already enjoy a close relationship with SMG as the largest content supplier to the venues they manage. This partnership truly aligns our interests to feed our core businesses."

The deal also strikes a direct blow at Ticketmaster as SMG had been estimated to be the firm's second largest client and according to the Wall Street Journal, represents approximately 6% of Ticketmaster's total revenue.

Ticketmaster isn't taking this development lying down. Ticketmaster Chief Executive Sean Moriarty told the Wall Street Journal that he believes SMG doesn't have the authority to make a deal like this on behalf of municipally owned venues that it manages. In those situations, competitive bids are required before awarding contracts. "We will continue to compete on an individual basis for all venues seeking ticketing services," Mr. Moriarty told the WSJ. - CelebrityAccess Staff Writers