A memo obtained by the website reads: “While it has been our sincere desire to create a new long term partnership [with Live Nation], we now believe it is doubtful we will extend our agreement when it expires at the end of 2008. Live Nation has been a valued client for a very long time and we believe we've taken every reasonable step possible to facilitate a renewal, but they seem intent on a direction for their business that leaves us no viable way to work together.”

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The deal, forged in 1998 through Live Nation’s predecessor, SFX Entertainment, is set to expire at the end of 2008. Venues that were part of Live Nation’s acquisition of House of Blues last year are contracted with Ticketmaster through 2009.

The deal set between Ticketmaster and SFX head Robert F.X. Sillerman held forth when Clear Channel Communications bought SFX for $4 billion in 2000 to form Clear Channel Entertainment. After Clear Channel spun off CCE to for the independent Live Nation, CEO Michael Rapino publicly expressed interest in tapping into new revenue sources related to ticketing and concessions.

According to Billboard, Ticketmaster is preparing to move forward without the client, one of 9,000 that represents about 10% of Ticketmaster revenue.

“We are now conducting our business with the clear understanding that our partnership with Live Nation is more than likely coming to an end,” the memo reads. “We will continue to fulfill our obligations under the agreement until it expires and Live Nation will receive outstanding service from us every step of the way.”

Live Nation has been taking apparent steps to set itself up to handle ticketing in-house. Last year, the massive touring company acquired a 51% interest in direct-to-fan merch and ticketing company Musictoday, and, through an acquisition of CPI, another player in the ticketing realm, UltraStar. Live Nation has also recently ramped up its focus on LiveNation.com, creating a one-stop experience drawing 3 million unique visitors per month as a live entertainment destination.

Sources close to the deal told Billboard that Ticketmaster sells between 14 million and 15 million tickets per year for Live Nation events, generating about $100 million in service-charge fees for Ticketmaster, which drew revenue of nearly $1.1 billion in 2006. --by CelebrityAccess Staff Writers