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LN 2020 results: Michael Rapino predicts huge 2022

Citing strong demand for tickets and successful vaccination programmes, the Live Nation CEO says he has “never been more excited about the opportunities in front of us”

By IQ on 26 Feb 2021

Live Nation's Michael Rapino is backing MITC's ‘Touring and Mental Health Manual’ and Tour Support for World Mental Health Day 2019

image © Coral von Zumwalt

Live Nation’s share price broke the US$90 mark for the first time yesterday ahead of the company’s Q4 2020 earnings call, buoyed by the roll-out of coronavirus vaccines globally and unprecedented fan demand for its shows, illustrated by rapid sell-outs for both Reading Festival and Creamfields in the UK.

Shares in Live Nation Entertainment reached an all-time high of $91.18 – some $15 higher than they were pre-pandemic – on 25 February, with Wall Street untroubled by the headline figures in the company’s most recent financial report, which show a 92% drop in revenue (to $237.3 million) for the fourth quarter (Q4) and 84% slump (to $1.86 billion) for the entire year.

In total, the company lost over $1bn in 2020, with its sponsorship and advertising division the only part of the business to make a profit: It earnt $82m, compared to a $639m loss for Live Nation Concerts and $375m loss for Ticketmaster.

Despite this, investor confidence in Live Nation’s long-term potential remains strong, and CEO Michael Rapino was bullish when taking questions from analysts, also highlighting the company’s cost savings and investment in new technology in 2020 and looking forward to the light at the end of the tunnel. “It appears that the timing to release [fans’s] pent-up supply and demand is now approaching,” he explained. “Vaccine distribution is accelerating, and declines in Covid cases throughout most of the world gives us even more confidence that a safe and meaningful return to shows will soon be possible.”

“I have never been more excited about the opportunities in front of us”

To illustrate that pent-up demand for tickets, Rapino (pictured) used the example of the aforementioned UK festivals. “Just to show you when we keep talking about pent-up demand, Reading and Leeds went on sale, thanks to the government-outlined new plan for the summer, and sold 100,000 tickets in 72 hours,” he told LightShed Partners’ Brandon Ross. “Creamfields went on sale and sold out in 48 hours, over 70,000 [tickets]. So we are seeing the fan and [this is] what we’ve been talking about; they are excited to get back to the show as soon as we get the green lights in these markets to open up.”

Addressing the financials, Live Nation president Joe Berchtold revealed that the company ended with 2020 with $950m in cost savings compared to 2019. Its $500m debt raise in January, he added, gives LN $2bn in available liquidity and $1.1bn in free cash.

Looking to this summer, Rapino said he sees shows returning on a region-by-region basis (a “module model”) in 2021, with 2022 set to be a huge year for major international tours, depending on the vaccination status locally. “Given the limited touring activity in 2020 and ’21, the pipeline for 2022 is much stronger than usual, with almost twice as many major touring artists on cycle in 2022 [as] in a typical year – about 45 artists versus the usual 25,” he said.

Rapino added: “For both the US and UK, projections indicate that everyone who wants a vaccine will be able to get one by May or June, with Europe and most other markets following a few months later. Given the mass social and economic toll the lockdown has put on the public, we believe there will be strong momentum to reopen society swiftly as soon as vaccines are readily available, and we believe outdoor activity will be the first to happen.

“The pipeline for 2022 is much stronger than usual, with almost twice as many major touring artists on cycle”

“So, while the timing of return to live will continue to vary across global markets, every sign points to beginning safely in many countries sometime this summer and scaling further from there.”

In a statement released with the earnings report, Rapino praises Live Nation staff for their resilience during a “challenging” year and highlights the strides the company has made towards securing its post-Covid-19 future.

“Over the last year, leaders across all our business lines of concerts, ticketing and sponsorship have been analysing ways to improve their businesses,” he says. “Some of our key initiatives include re-organising to become more nimble while also reducing our cost structure by $200 million; building concert streaming and direct-to-consumer businesses to expand our revenue streams; advancing our technology initiatives globally while accelerating the shift to digital tickets to meet changing needs of fans, venues and artists; and reinforcing our balance sheet to endure this period, while maintaining a strong position to build our business for the future and act on opportunities as we identify them, such as our recent acquisition of the streaming platform Veeps and a continued pipeline of bolt-on acquisitions throughout the globe.

“So while this past year has been challenging for the company, our employees, fans, artists and so many others globally impacted by Covid, I have never been more excited about the opportunities in front of us.”


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