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LN revenue up 7% in Q2, as SiriusXM rubbishes merger rumours

AOI also rose 18%, in another strong quarter – though the likelihood of SiriusXM making a Live Nation bid is on par with Paul McCartney dying in the ’60s, says its CFO

By Jon Chapple on 27 Jul 2018

The North American leg of Jay-Z and Beyoncé's Live Nation-promoted OTR II kicked off in Cleveland on Wednesday

image © Robin Harper/Parkwood/PictureGroup

Live Nation has built “the industry’s most scalable and unparallelled live platform”, said CEO Michael Rapino yesterday, as the concert giant reported another quarter of double-digit income growth.

Live Nation grew turnover 7%, to US$2.9bn, in Q2 2018, with operating income growth again in double digits, increasing 19% to $135 million. Adjusted operating income (AOI, which excludes several expenses, mostly related to stock-based compensation, depreciation and amortisation) was up 18%, to $260m.

“Each of our businesses contributed to these results, all delivering double-digit operating income and AOI growth for the quarter,” Rapino told investors, with concerts up 6% (revenue)/13% (AOI), sponsorship and advertising up 12%/14% and Ticketmaster up 13%/15%.

The positive Q2 results come after SiriusXM CEO Jim Meyer denied reports the US satellite radio giant is preparing for a takeover of Live Nation.

Referring to a report by BTIG Research’s Brandon Ross, in which the analyst suggested a SiriusXM-Live Nation merger is “inevitable”, Meyer said during its Q2 earnings call that “I don’t have any comment on Live Nation. I don’t even know where that speculation is coming from. It’s not coming from SiriusXM.”

While he acknowledged the two companies enjoy “growing and strong cooperation” – SiriusXM parent company Liberty Media owns around a third of Live Nation, and Rapino sits on the company’s board – he rubbished rumours of a merger. “We both use assets we have to improve our businesses, but for me that’s about it,” he said.

“Each of our businesses is contributing to this success”

SiriusXM’s CFO, David Grear, went further, saying when he sees a note like Ross’s, “it’s a bit like going into the supermarket and seeing that Paul is dead, or a Sasquatch has sat down for candid photos or aliens abducted someone’s baby. There’s lots of headlines, but it’s not certain they have much to do with reality.”

Back at Live Nation, Live Nation president Joe Berchtold fielded questions on the recent Ticketmaster hack, telling Goldman Sachs’s Drew Borst the company is working with the UK’s Information Commissioner’s Office (ICO) to ensure it meets its obligations under GDPR, while Rapino revealed Ticketmaster has now installed its Presence audio-ticketing system in 125 venues, with another 75 planned for the second half of 2018, “positioning us to have at least 60 million fans using this system next year.”

Rapino also praised the strength of Live Nation’s European festivals, which saw revenue per fan grow 12% in the second quarter.

Twenty-eighteen, he concludes, “is on track for the company to deliver double-digit operating income and AOI growth along with strong gains in revenue, operating cash flow and adjusted free cash flow.

“Each of our businesses is contributing to this success, as we put on more concerts for a greater numbers of fans, continue to monetise fans who come to the shows, sell more tickets to events of all types and further demonstrate the value of over 90 million fans to sponsors.”


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