‘Fans are resilient’: Across-the-board growth for LN in 2019

Live Nation exceeded expectations for both revenue and adjusted operating income (AOI) in 2019, according to its just-released full-year financial results, painting a rosy outlook for the year ahead, despite growing concerns of the impact of the Covid-19 coronavirus.

The final year of the 2010s saw the concert giant deliver its ninth consecutive year of growth, with turnover up 7%, operating income up 19% and AOI up 14%, to US$11.55 billion, $324.8 million and $942.5m, respectively.

Revenue from sponsorship and advertising grew 17%, to $590.3m, with festival sponsorship having a particularly strong year, bolstered by the addition of Rock in Rio to the LN portfolio. Some 98 million people attended a Live Nation concert in 2019 – a 5% increase on the previous year – while Ticketmaster grew its AOI 11% and delivered 115m tickets in 31 countries worldwide.

Live Nation shares increased around 1.3% following yesterday’s (27 February) earnings call, though the price – in common with other live entertainment stocks – is still down on the all-time high achieved in February 2020, as the coronavirus continues to spook markets worldwide.

Responding to a query from analyst Brandon Ross, who asked how Covid-19 could affect Live Nation’s business in 2020, CEO Michael Rapino said while he expects to see further cancellations and postponements, there will be no decline in the appetite for live entertainment.

The business is real strong. The consumer still seems to be buying the tickets on a global basis”

“[W]e always talk about the resilience of the concert fan,” he said, “and, as of last night, we had a sellout in Australia on a festival [Splendour in the Grass]. The business is real strong. The consumer still seems to be buying the tickets on a global basis.

“So supply [and] demand will be there. We’re going to take this cautiously as we watch the markets and we assume a hotspot will flare up and a show will be cancelled here and there. But we’re confident that, long-term, the show will happen. The revenue will flow and the fan will show up.”

Rapino also revealed that average ticket prices for the promoter’s arena and amphitheatre shows have increased by double digits since 2017, with sales of dynamically priced Platinum tickets increasing 66% in 2019. Despite this, “concerts remain a great deal for fans relative to other live experiences: our average ticket for a concert at one of our amphitheatres was $46 in 2019, relative to about $75 for an NBA [basketball] game and over $100 for an NFL [American football] game,” said Rapino.

“In summary, 2019 was another strong year for Live Nation, building our global concerts business and driving growth in our high-margin venue, sponsorship and ticketing businesses,” Rapino says in a statement.

“Looking at 2020, we believe that our double-digit fan and show count growth so far this year, against a backdrop of very high artist activity across all venue types and markets, sets up our flywheel to deliver another year of strong global growth.”

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