Touring powerhouses back Fair Ticketing Reforms
Live Nation, CAA, UTA, Wasserman Music and WME are among more than 20 music organisations to come out in support of ticketing reforms.
Fans & Artists Insisting on Reforms (FAIR) Ticketing is appealing for policymakers to combat ticket touts by giving artists the right to decide how their tickets can be sold, transferred and resold, and for speculative ticket selling and other deceptive practices used to sell tickets to be made illegal.
In addition, the coalition is demanding the expansion and and stricter enforcement of the 2016 BOTS Act and for resale sites that serve as a “safe haven” for touts – and knowingly sell tickets that are illegally acquired – to be fined.
Finally, it is calling for all-in pricing across all ticketing marketplaces introduced nationally so that fans know the full cost of a ticket plus fees right upfront.
“Bots and scalpers cause chaos in the current onsale process, leaving lots of fans disappointed,” says Michael Rapino, president and CEO of Live Nation, which launched the Fair Ticketing Act last month. “Artists are fiercely protective of their fans and we need to make sure laws help artists control their concert intellectual property and how their tickets are sold. That would be a big step forward in helping fans buy tickets at the prices artists set.”
“FAIR Ticketing reforms give more control over ticketing to the artists so they can get tickets to real fans and prevent unauthorised resellers from charging exponentially more than face value”
Other high-profile supporters of the reforms include The Azoff Company chair and CEO Irving Azoff, Wasserman Music EVP and managing executive Sam Hunt and WME global head of contemporary music Lucy Dickins.
“No one cares more about fans than the artists,” says Azoff. “FAIR Ticketing reforms give more control over ticketing to the artists so they can get tickets to real fans and prevent unauthorised resellers from charging exponentially more than face value. I hope Congress will pass legislation for the good of artists and their fans.”
“Ticketing can be a frustrating and confusing experience for fans, and technological advancements in the space often end up being double-edged swords,” says Hunt. “FAIR Ticketing reforms are a crucial leap toward creating a process that is equitable and transparent to all parties.”
Dickins adds: “There is no doubt that change is needed in the current ticketing ecosystem to protect our clients and their work. The FAIR Ticketing reforms would provide the necessary tools to empower artists and creators who know their fans best while putting an end to deceptive ticketing practices.”
The artist coalitions, management groups, music labels and agencies to have signed on to back the “artist and fan friendly reforms”, include the following:
724 Management
Black Music Action Coalition (BMAC)
Creative Artists Agency (CAA)
Crush Music
The Core Entertainment
Endeavor
Faculty Inc.
Full Stop Management
Gellman Management
Laffitte Management Group
Live Nation Entertainment
Music Artists Coalition (MAC)
REBEL
Red Light Management
Salxco
Songwriters of North America (SONA)
United Talent Agency (UTA)
Universal Music Group
Vector Management
Wasserman Music
Wolfson Entertainment Inc.
WME
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Live Nation’s boss forecasts another record year
Live Nation chief Michael Rapino says “all signs” are pointing towards another record year for the promoter, with ticket sales for its 2023 shows already surpassing 50 million – up 20% on the same period last year.
In 2022, the company’s revenue increased 44% on 2019 to $16.7 billion, while operating income rose 125% to $732 million. AOI was up 49% to in excess of $1.4bn. Attendance was also up 24% on the last pre-pandemic year, with 121m fans attending 43,600 events.
Speaking during yesterday’s (23 February) earning call, Rapino said four key leading indicators were pointing towards even greater success in 2023.
“First, our deferred revenue at the end of 2022 was $2.7 billion, up 125% from 2019 and up 18% from 2021, which benefited from a high volume of rescheduled shows,” he said. “Next, as of mid-February, ticket sales for our shows this year exceed 50 million fans, up 20% from this point last year, with international growth at 25%.
“Then, our global ticketing fee-bearing gross transaction value is up 33% to $9.8 billion through the same period. Finally, over 70% of our planned sponsorship activity for the year is confirmed, again up double-digits relative to this time last year.”
“We’re just seeing incredible strength right now across the board”
Q4 revenue was $4.3bn, up $2.7bn year-on-year, but LN posted an operating income loss of $120m for the quarter, compared to a loss of $124.5m 12 months earlier.
However, Rapino stressed that the firm was seeing “nothing but strong growth demand everywhere in the world right now”.
“We’re up right now with stadiums in Asia, South America, Eastern Europe, all of our festivals are outperforming last year around the world,” he said. “Our clubs and theatres are doing well. Our on-site spend in most of those clubs and theatres we see tracking in the right direction… We’re just seeing incredible strength right now across the board.”
Rapino explained that the post-Covid cost increases for the business were subsiding.
“When we sat here a year ago, we didn’t think we were going to be open in the summer,” he said. “We had no staff. We ran 100 miles an hour to get open for May, hire 20,000 staff, every tour, concert couldn’t find trust double cost for generators… Overpaying staff, suppliers, getting the show back together was tough last year.
“We still obviously delivered incredible numbers, but we’re now back to that 2019 level of staff in place, costs have all come down, suppliers are all back in line, generators are normal cost. So we do obviously expect 2023 to be in terms of a cost basis back to a continual normal business.”
“We’re pretty much the only product in the world that’s worth more the second it’s sold”
Ahead of Pollstar Live!’s Ticketing Real Talk panel earlier this week, Oak View president Tim Leiweke alluded to the US Senate’s investigation into the market, sparked by the controversy around the onsale for Taylor Swift’s Eras Tour.
“I think it is amazing to me that the politicians can take an issue like this and jump on it with such a lack of understanding about our business,” he said. “What they truly don’t get is that if you look at what the major issue we’re facing today with these big tours is demand, which is a wonderful thing that this many people want to go to your concerts, want to go to your venues, want to come join our industry to be a part of it.”
Live Nation has now launched the Fair Ticketing Act, which says that artists should decide resale rules; selling speculative tickets should be illegal; the scope of the BOTS Act needs to be expanded and enforced; and there needs to be industry-wide all-in pricing so fans see the full cost they are paying up front.
“We believe that greater transparency on the entire ticketing ecosystem will improve the industry, and we have been engaging with policymakers to advocate for reforms,” said Rapino. “The biggest challenge facing the industry is chaos at the onsale, where fans cannot get the tickets at the price the artist sets, yet they see pages of secondary sites with tickets five times’ face value because of scalpers.”
He added: “The US is probably about the only country in the world that doesn’t have some level of regulation. Most other countries walk up and said, “If the artist wants to charge $300 an underpriced product for the fan to get a cheaper ticket why would a middleman be able to make $1,000. It doesn’t seem logical, right?
“There’s a lot of pent-up artists who are underpricing their product every day. We’re pretty much the only product in the world that’s worth more the second it’s sold. I think they’ve done that for the betterment of their fanbase.
“If they’re going to charge under market, I believe that they should have a say in it… We think that the artist or the content owner will be able to have more control on how and when they want to sell their tickets, and I think that’s a big step forward.”
The company’s share price, which opened this morning at $75.18, had dipped more than 5% at press time.
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Taylor Swift tour sells 2m tickets in single day
Live Nation chair Greg Maffei says Taylor Swift “could have filled 900 stadiums” after selling more than two million tickets in the presale for her 2023 The Eras US tour.
Ticketmaster says the number of tickets sold for the 52-date tour has set a new record for an artist in a single day.
Maffei, who is CEO of Liberty Media, LN’s largest shareholder, tells CNBC that the promoter is “sympathetic” for the fans who missed out on tickets despite long wait times.
“The site was supposed to be opened up for 1.5 million verified Taylor Swift fans. We had 14 million people hit the site”
“Reality is, it’s a function of the massive demand that Taylor Swift has,” he says. “The site was supposed to be opened up for 1.5 million verified Taylor Swift fans. We had 14 million people hit the site, including bots – another story – which are not supposed to be there. And despite all the challenges and the breakdowns, we did sell over two million tickets that day, we could have filled 900 stadiums.”
Ticketmaster cancelled today’s general sale, citing “extraordinarily high demands on ticketing systems and insufficient remaining ticket inventory to meet that demand”.
In a now deleted blog post, the company said a record 3.5m people pre-registered for Swift’s Verified Fan presale, 1.5m of whom were later invited to participate in the onsale, with the remaining 2m placed on a waiting list. It estimated “about 15% of interactions across the site” experienced issues.
“Every ticket was sold to a buyer with a Verified Fan code. Nobody (not even a bot) could join a queue without being verified”
“Historically, working with Verified Fan invite codes as we’ve been able to manage the volume coming into the site to shop for tickets,” it said. “However, this time the staggering number of bot attacks as well as fans who didn’t have invite codes drove unprecedented traffic on our site, resulting in 3.5 billion total system requests – 4x our previous peak.
“Every ticket was sold to a buyer with a Verified Fan code. Nobody (not even a bot) could join a queue without being verified.”
Hitting back at criticism from American politician Alexandria Ocasio-Cortez (AOC), Maffei adds: “This is not actually a Live Nation promoted concert. Taylor Swift is promoted by one of our largest competitors. So though AOC may not like every element of our business, interestingly, AEG our competitor, who is the promoter for Taylor Swift, chose to use us because we are in reality, the largest and most effective ticket seller in the world. Even our competitors want to come on our platform.
“We sold two million tickets, the most we’ve ever sold in one day in history”
“I apologise to all our fans. We are working hard on this and, again, building capacity for peak demand is something we attempt to do, but this exceeded every expectation. And the reality is Taylor Swift hasn’t been on the road for three or four years and that’s caused a huge issue.”
Speaking at Liberty Media’s investor day, according to The Hollywood Reporter, Live Nation CEO Michael Rapino says: “We invited a million and a half on that day to come and buy those tickets, but it’s kind of like having a party. Everybody crashed that door at the same time with 3.5 billion requests.
“We sold two million tickets, the most we’ve ever sold in one day in history, and another million tickets of other artists on the same day. So although we regret it was a slowdown in some queues and some error codes for a short period for some fans, we did manage to recover.”
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Live Nation scores biggest summer season yet
Live Nation has delivered its biggest summer concert season in history, with Q3 revenue up 63% on pre-pandemic levels to $6.2 billion.
The company’s operating income for the period rose 95% to $506 million, while reported AOI increased 45% to $621m as it achieved its highest quarterly attendance ever with over 44 million fans across 11,000 events.
In addition, its Ticketmaster business transacted $6.7bn of fee-generating GTV on 71m tickets, up 69% and 42% respectively, relative to Q3 2019, while sponsorship had another record quarter, droving AOI of $226m – 56% higher than Q3 2019.
“Clearly 2022 has been an incredible year of returning to live events, and we expect it to finish strong”
“Clearly 2022 has been an incredible year of returning to live events, and we expect it to finish strong,” says Live Nation chief Michael Rapino. “Ticket sales for concerts this year were up 34% for the quarter, and now stand at over 115 million tickets sold for shows this year, up 37% from this point in 2019.
“More importantly, momentum is strong with early signs pointing to continued growth in 2023 across our businesses. Ticket sales for shows in 2023 are pacing even stronger than they were heading into 2022, up double-digits year-over-year, excluding sales from rescheduled shows. In our sponsorship business, confirmed commitments are up 30% from this time last year, showing the resiliency and long-term commitments that brands have for our business.
“Beyond these specific leading indicators, going into 2023, we expect we will drive growth in our concert business by adding more venues to our operated portfolio, continue increasing ancillary per fan revenue and further our efforts to deliver market value for the show to artists. And in ticketing, we expect to benefit from these market pricing trends, while also continuing to globally add new clients to our world-class platform.”
“I look at our top artists we’ve had this year – Harry Styles, Dua Lipa, Billie Eilish, Bad Bunny, Morgan Wallen, The Weeknd, Olivia Rodrigo – and these are all artists that are at the early stages of their career”
Fan count at stadiums more than tripled to nearly nine million, driven by global demand for artists such as as Bad Bunny, The Weeknd and Red Hot Chili Peppers. And speaking to investors, Live Nation CFO Joe Berchtold says the firm is not reliant on heritage acts.
“I look at our top artists we’ve had this year – Harry Styles, Dua Lipa, Billie Eilish, Bad Bunny, Morgan Wallen, The Weeknd, Olivia Rodrigo – and these are all artists that are at the early stages of their career. These are tremendous talents that are just showing the breadth of supply that we have in our business.
“Our sales for next year are up double digits. We’re most up in stadiums which, by their definition, are going to be the largest artists that can sell the most tickets. So that would indicate we are off to a good quality start.”
“A concert ticket is still a really affordable ticket. The majority of the tickets are sold are $50 to $75
Rapino projects that 2023 will be “a similar year in terms of quality” and says the imminent sale for Taylor Swift’s 2023 US tour was “probably going to break all records” for Ticketmaster’s Verified Fan scheme.
“Artists are seeing the demand is there if you price it smart and you have got the right markets,” he says. “We are not feeling the demand from inflation or ‘23 pressures that are driving strategy. It’s just overall us being better at what we do today than we were last year and the year before on pricing strategy per market by artist for territory.
“A concert ticket is still a really affordable ticket. The majority of the tickets are sold are $50 to $75. So, although we have a great premium business… we’re seeing demand strong on all levels. Whether it’s a $19 ticket, it’s filling up the clubs or the premium at the stadiums and arenas. So we do think we have something for everyone.”
“We don’t believe there will be any impact whatsoever if there was a nationwide mandate for all-in pricing”
Berchtold and Rapino also reiterate LN’s backing of US president Joe Biden’s call for transparency around ticketing fees, having endorsed a law passed in New York this summer requiring ticket sellers to share all fees upfront.
“We don’t believe there will be any impact whatsoever if there was a nationwide mandate for all-in pricing,” says Berchtold. “We think it makes sense. It just has to be done collectively at the same time… So I think that we will work with the FTC. We will work with the DA in the State of New York, and we’re very supportive of that and some other shifts to make ticketing more transparent and a better consumer experience.”
“We tend to do better as regulation comes into play in this space,” adds Rapino. “A lot of our business has been chasing the secondary business for years that’s kind of unregulated. We would love spec selling to be outlawed. We’d love better rules on bot ticketing. We love all-in pricing. We’re adhering to all-in pricing in New York right now.
“I think we’re probably the only ticketing company actually adhering to those regulations right now. So we like sunlight coming to the business… Most of the noise is generated from the secondary business. So we love regulation, it puts us on an equal footing.”
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TM captures $500m for event organisers from resale
Ticketmaster says its dynamic pricing model has captured over $500 million for artists and event organisers from resale markets in 2022.
The company revealed the figure in response to criticism from a US congressman over its dynamic pricing model for Bruce Springsteen’s 2023 tour.
Many fans reacted with uproar after individual tickets reached more than $5,000 via Ticketmaster’s market-based pricing when the first wave of The E Street Band’s US tour dates went on sale in July.
The backlash prompted Bill Pascrell, a representative in Springsteen’s home city of New Jersey, to demand answers from the ticketing firm’s parent company Live Nation.
“I write on behalf of my constituents and fans across the country that are excited for Bruce Springsteen and The E Street Band’s 2023 tour,” said Pascrell in a letter to Live Nation boss Michael Rapino. “Hard-working Americans who are fans of Bruce and other popular entertainers should have the ability to enjoy live entertainment without ticket-sales practices that rip off consumers.
“To help fans better understand the frustratingly opaque process that leads to such high prices, I am inquiring about the veracity of the company’s statement, as well as the policies and prices the company has put in place for this tour.”
In a lengthy response reported by Celebrity Access, Ticketmaster reiterates that prices and onsale parameters are set by event organisers, the company.
“The recent Bruce Springsteen tour is a prime example of returning value to artists from the secondary market”
“Dynamic pricing is about capturing more value for the artist at the initial onsale, vs that value going to people reselling tickets on the secondary market,” it says.
“The secondary market sees over $10 billion in ticket sales and continues to grow rapidly. Through Ticketmaster, dynamic pricing has captured over $500 million for event organisers from resale markets in 2022 alone.”
“The recent Bruce Springsteen tour is a prime example of returning value to artists from the secondary market. Ticketmaster was not the only ticketing company selling primary tickets for the Springsteen tour, but the data is compelling.”
Detailing the cost of Springsteen ticket sales on Ticketmaster, the firm says 88.2% of tickets were sold at set prices, with 11.8% of tickets designated “Platinum” (dynamic). The average price of all tickets sold on the platform was $262, with 1.3% of total tickets across the shows sold for more than $1,000.
In addition, 56% were sold for under $200, 11% between $150 and $200, 27% between $100 and $150, while 18% of all tickets sold were under $99.
Springsteen’s 2023 run begins on 1 February at Amalie Arena in Tampa, Florida, before heading to Europe in April
Addressing the furore earlier this summer, Springsteen’s manager Jon Landau argued the pricing was in line with shows for acts of a similar stature.
“In pricing tickets for this tour, we looked carefully at what our peers have been doing,” Landau told the New York Times. “We chose prices that are lower than some and on par with others.
“Regardless of the commentary about a modest number of tickets costing $1,000 or more, our true average ticket price has been in the mid-$200 range. I believe that in today’s environment, that is a fair price to see someone universally regarded as among the very greatest artists of his generation.”
Springsteen’s most recent tour – 2016/17’s The River Tour – was the highest grossing worldwide tour of 2016, earning $268.3m over 76 shows. His 2023 run begins on 1 February at Amalie Arena in Tampa, Florida, before heading to Europe in April.
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LN Q2 results: live biz back ‘bigger than ever’
Live Nation CEO Michael Rapino has declared the live business is back “bigger than ever”, with the company’s Q2 financials showing 2022 ticket sales are outperforming pre-pandemic levels.
LN’s share price had risen 12% in the last month in anticipation of yesterday’s results, and closed at $97.63 last night.
The firm attained its highest quarterly attendance ever, attracting more than 33 million fans across 12,500 events, as revenue soared to $4.4 billion – up 40% on the same period in 2019. In addition, operating income was up 86% to $319 million, while AOI rose 50% to $480m.
“We have sold over 100 million tickets for our concerts this year, more than we sold for the entire year in 2019”
“The second quarter confirmed that live entertainment industry is back globally and bigger than ever,” says Rapino. “Live Nation led this return and continues to deliver the best global network to support artists as they play shows for the fans around the world.
“We have sold over 100 million tickets for our concerts this year, more than we sold for the entire year in 2019.”
Ticketmaster also delivered another record quarter, with AOI up 86% and transacted GTV increasing 76%. The figures account for the three months ending 30 June.
“Ticketing had another very successful quarter, delivering $231 million of AOI, making it the most profitable quarter ever for ticketing, beating the record set just last year in the fourth quarter and nearly doubling the Q2 2019 AOI results of $124m,” says CFO Joe Berchtold. “Our growth came from both primary and secondary ticketing with transacted ticketing GTV up 69% and 141%, respectively.”
Berchtold suggests that indications are pointing towards “a very strong Q3 for concerts”, with more shows and a higher attendance.
“As we prepare for 2023… we are actively routing into all markets with the largest artist pipeline we have ever seen at this point in the year”
Rapino adds that next year is shaping up to be a similarly impressive year.
“As we prepare for 2023, everywhere globally is open for concerts, and we are actively routing into all markets with the largest artist pipeline we have ever seen at this point in the year,” says Rapino. “For the 2023 tours we have put on sale so far, all signs continue pointing to strong fan demand.”
Amid the controversy over “dynamic” ticket prices for Bruce Springsteen’s 2023 tour, where the top priced tickets surpassed $5,000, Rapino reports that market-based pricing is being widely adopted by most tours.
“We expect to shift over 500 million from the secondary market to artists this year, continuing to support those who created the concert and ensuring they are benefiting from it,” he says.
“We work for the artist. Our job is to provide all the tools, platform and services to help them succeed in that tour”
Rapino elaborated further on the issue when speaking to investors during yesterday’s earning call.
“We’ve been saying for a few years that over time, we believe that that secondary [ticketing] $10 billion, $12 billion, depending on what number you see globally, has to start getting captured by the artist at some level,” he said. “It’s just too transparent. The more they see all of the online pricing while they work so hard to put that show on. So… artists are looking at us saying, ‘I’d like to count some of it in the front end. I don’t want to be sold out at 10.01am at $200 to have someone else make $2,000.’
“Fans are not getting a deal anyway, they’re spending $2,000 from somebody else. So I do think they’re looking and saying, ‘the front of the house, can we capture some demand?'”
“We’ve got a global product and we’ve got lots of opportunity to keep growing”
He added: “We work for the artist. We’re a B2B business. Our job is to provide all the tools, platform and services to help them succeed in that tour.
“They’re genius brand managers. They have to balance the needs of their fans, supply, demand and pricing. And some brands, like the Rolling Stones, have been very good at always saying expensive experience and we’re that proud and enable to deliver that brand position. But I think artists are always trying to find a fine line on how do I make the show accessible? How do I make sure all my fans can show? How do I price it fairly versus how much money can I make? So I think they see that.
“Today, while the technology is advancing and they’re starting to look at more technology and more pricing data, I think they can now [price] 1-2% of the house higher and achieve some of those economics versus the scalper, while still pricing 98% of the house at a very stable brand position. So we can achieve both.”
Rapino also addressed the company’s global strategy in the wake of recent moves in Thailand and the Philippines.
“We look at Asia as really undeveloped territory, low market share, huge opportunity,” he said. “Like everyone else in the world, we look at Asia, we look at Latin America, and we’re looking to the Middle East and Eastern Europe as areas where we have no real market share. But that consumer now on TikTok knows that Drake dropped the video last night, whether they live in Singapore, India, Cape Town. So we’ve got a global product, and we’ve got lots of opportunity to keep growing.”
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Michael Rapino: ‘We’re headed for a record year’
Live Nation boss Michael Rapino says the promoter remains on track for back-to-back record years.
Fresh from inking a five-year contract extension with LN running to 2027, Rapino told CNBC’s Power Lunch the company was not seeing any “recessionary trends” regarding ticket sales.
“We’re not, we’ve had such pent-up demand, in Europe, America, Australia and we’re headed for a record year right now, as of this weekend,” he said. “I checked all our latest data: people are showing up – 90% rates – our ticket sales are double digits over 2019.
“One factor we like to see is what are they spending on site, and those are up 25% since 2019, which was a record year. We’re seeing record levels… [fans] are coming to have fun and drink and enjoy the night.”
The LN president and CEO added that the forecast for next year was equally as encouraging.
“We’re looking at 2023 right now, with about 85 tours booked, and that would put us on [course for] another record year,” he said. “Overall, historically, concerts are an 8-9% growth business and we think that’s going to continue. So we don’t think there’s an air pocket, we think we’re going to be back to a continual growth business as we have for the last 30 years.”
“A concert ticket is still really affordable – the average ticket price is $35”
Rapino also defended the promoting giant – whose Ticketmaster division’s sales were up 36% on the same period in 2019 in Q1 2022 – against claims of high ticket prices.
“The top end ticket always gets the press, but a concert ticket is still really affordable – the average ticket price is $35,” he said. “You can’t have a dinner for that, you certainly can’t go to a Lakers [NBA] game. So of all entertainment options, it’s affordable.
“Now, ticket prices at the top that have gone up. But that’s to make sure that the artist starts to participate in some of that pricing dynamic versus the secondary market. You look today and the market is still hot on the secondary business, which would indicate pricing still is below market. But we still believe that the artist should gather more of the upfront costs. We also think making it affordable is right.”
Rapino has served as CEO of Live Nation since its formation in 2005, when it was spun off (initially as CCE SpinCo, Inc.) from Clear Channel, where he was president of global music. He became president and CEO of the newly formed Live Nation Entertainment in 2010, when Live Nation merged with Ticketmaster.
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Michael Rapino re-ups with Live Nation
Live Nation CEO and president Michael Rapino has signed a new five-year contract extension with the company.
Under the terms of the agreement, while Rapino’s base salary will remain at $3 million, 90% of his annual compensation will be performance-related. In addition, he will receive a $6m signing bonus and his annual cash performance bonus has a target amount of $17m, according to the filing.
From 2023, Rapino will also be entitled to receive an annual performance-based grant of restricted shares of company common stock with an annual target value of no less than $10m, “based on the attainment of qualitative performance targets to be established by the Compensation Committee”, it adds.
Rapino has served as CEO of Live Nation since its formation in 2005, when it was spun off (initially as CCE SpinCo, Inc.) from Clear Channel, where he was president of global music. He became president and CEO of the newly formed Live Nation Entertainment in 2010, when Live Nation merged with Ticketmaster.
LN delivered its best Q1 performance ever earlier this year
Earlier this year, LN delivered its best Q1 performance ever, posting revenue of $1.8 billion. The promoter recorded operating income of $27 million and AOI of $209m for the first three months of the year, while its Ticketmaster division posted another record quarter.
Ticketmaster reported sales of 70 million tickets for its 2022 concerts – up 36% compared to the same point in 2019, and Rapino said all leading indicators pointed towards double-digit growth and fan attendance for LN over the course of the year.
News of Rapino’s deal follows the company’s strategic acquisition of the concerts and entertainment division of Thailand-based TERO Entertainment (TERO C&E).
LN’s share price stood at $83.35 before the opening of the markets today.
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Michael Rapino: ‘This is a global demand business’
Live Nation president and CEO Michael Rapino has spoken of international growth opportunities for the business in a new interview.
Rapino appeared on the Live from the Compound podcast in conversation with Josh Brown and Michael Batnick of Ritholtz Wealth Management.
In a wide-ranging chat, Rapino suggested there was no substitute for touring when it comes to building a fanbase.
“You can be a one-hit wonder and have great streams. But if you can sell out that arena… that’s where you build fans,” he said. “If you can fill venues, then you’re going to have a long career and that machine is going to work for you in many ways.
“For 50 years, this was a US/Western Europe business. The minute the internet unlocked, the game changed”
“Artists need to get on the road. But I think the part that gets overlooked is that it’s a global demand business. For 50 years, this was a US/Western Europe business. The minute the internet unlocked, the game changed. Now that 19-year-old in Colombia, Cape Town, knows that Tyler [the Creator] dropped an album last night, there are no gatekeepers telling them about that. So we look at this incredible global opportunity.
“As big as we look like we are, we’re still only 30% of the global market share. We’ve just started in Latin America, with Ocesa and Rock in Rio. We have minimum market share in Asia. Eastern Europe is growing. We think Africa has some great potential and we’re talking a lot about that. We just did our first Middle East tour with Maroon 5 and sold everything out instantly, so it’s a global business. And like any global platform, we have a great advantage on a global basis.”
Rapino described the company’s multiple global bases as its “special sauce”, adding: “We think most of the growth for the next 10 years will be international. There are 100 cities that all want to be New York and they all want Drake, Taylor Swift and the Rolling Stones to play there. So we look at this as a global growth business that is going to grow organically, we think, on a 10% basis a year. A market leader like us is probably going to ride that wave on a global basis for continued double digit growth.”
“We were headed for a monster year and then boom, the music stops”
He also recalled his response at the start of the Covid shutdown in March 2020.
“We were headed for a monster year and then boom, the music stops,” he said. “You were the captain on the Titanic in the sense that you had no idea when and how this was going to play out – whether it was two months, six months or a year. But you had to get on those global employee calls and make everyone feel fairly confident that things were going to be okay.
“We thought 75% of people were going to refund their tickets… But the gift that we got by the first earnings – and why our stock then did the take off – was that at that point, 94% of people were holding onto their tickets.”
“We’re about the only product out there that is worth more the second it’s sold”
The subject later turned to ticket prices and the industry’s reputation for being “recession-proof” given the state of the economy.
“Historically, over 30 years, [the live business] has been fairly recession-proof. In 2010, let’s call it the worst time for the industry, ticket sales were down 10%,” said Rapino. “And then the year after it was a record year, so it’s not really had a big effect. Now, I’d say there are a few factors to think about: One is, we are still dramatically underpriced and that’s part of why we think we have a great growth story. There is a $12 billion secondary business that exists… We’re about the only product out there that is worth more the second it’s sold. So we still think there is a great opportunity in pricing.
“Then two, people write about the big headline prices. But compared to going to an NBA, NHL or NFL game, this is very affordable opportunity. What we’ve typically seen in a recession is you might not go to Disneyland, you might not buy that dishwasher, but you’re going to go to Keith Urban at the amphitheatre. It’s still a really affordable, but high value escape.”
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Live Nation hails biggest Q1 in company history
Live Nation boss Michael Rapino says the company’s Q1 business “greatly surpassed” expectations after delivering its best Q1 performance ever.
The promoter recorded operating income of $27 million and AOI of $209m for the first three months of the year, while its Ticketmaster division posted another record quarter, with big growth in operating revenue, AOI and transacted GTV compared with the last pre-pandemic year of 2019.
Sponsorship operating income and AOI were also up 83% and 75%, respectively, on three years ago.
“Artists are back on the road and fan demand has never been stronger”
“Momentum has picked up for all of our businesses over the course of the first quarter,” Rapino told investors during yesterday’s earnings call. “And as a result, we have delivered financial performance that greatly surpassed our previous expectations with AOI of $209 million.
“Artists are back on the road and fan demand has never been stronger. The reflection of live events remain a clear priority for consumers as our social lives restart.”
Ticketmaster reported sales of 70 million tickets for its 2022 concerts – up 36% compared to the same point in 2019, and Rapino said all leading indicators pointed towards double-digit growth and fan attendance for LN over the course of the year.
“Ticket sales were at record levels in Q1 with momentum building over February and March,” he said. “We sold almost 20 million more tickets to our concerts this year in this point in time in 2019, with large number of tours still to go on sale and concert fans are showing no sign of slowing down.
“Ticket buying serves as a leading indicator to our overall business. Ticketmaster’s strong first quarter performance drove the company’s overall profitability and shows how well our concert and sponsorship businesses are positioned to deliver record results this year.
“Despite some markets taking longer to reopen, the quarter was our second highest ever we transacted GTV, excluding refunds, trailing only Q4 2021 with March being our highest transacted GTV month ever.”
He added: “Our sponsorship activity fully returned in Q1, delivering financial results that well exceeded 2019. We’re seeing growth across a number of dimensions, expansion of existing relationships, new categories expanding our breadth to partners and new ad units being created both onsite and online.”
“We continue to build our flywheel with over 70 million tickets now sold for shows in 2022”
Rapino also referenced the firm’s partnerships with brands such as Verizon and Snap.
“Much of our focus with brand partners is how we collectively elevate the fan experience. We’ve had great success with this in recent years. And so far this year through our partnership with Verizon, we started powering our Venues with cutting edge 5G connectivity and are launching initiative with Snap to give artists augmented reality capabilities at shows and festivals.
“But more importantly, we continue to build our flywheel with over 70 million tickets now sold for shows in 2022, up to 36 million, compared to 2019 and committed show count is up 44% through the end of April, relative to 19%, setting us up for continued ticket sales over the year.
“We have over 60 tours already under discussion for 2023, our earliest indicators of next year in great positioning for ongoing growth.”
I continue to expect this just to be the start of our run”
Rapino said the no-show rate at gigs – a common complaint the first few months after the restart – had returned to normal levels.
“We’re seeing no challenges at all,” he said. “People are showing up to the shows. We are showing similar to 2018, ’19, your regular low digit no-show rate of people that don’t make it to the show. But back to normal, people come and drum to those shows no issues at all in terms of showing up.”
He added that while the US and UK had driven much of the company’s activity over the past year, the rest of the world was now rapidly opening up.
“Both Latin America and Western Europe are expected to have record attendance for our concerts this year,” he concluded. “I continue to expect this just to be the start of our run, the global addressable markets for concerts, ticketing and sponsorship, all provide a long runway for continued growth.”
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