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Live Nation posts record Q1, addresses DOJ lawsuit

Live Nation’s share price has surged almost 10% on the back of its biggest Q1 to date, which saw revenue leap 21% year-on-year to $3.8 billion.

While the company posted an operating loss of $37 million “impacted by one-time accruals” for the first quarter of 2024, fan growth was up 21% to 23 million fans, AOI increased 15% to $367 million and sponsorship revenue leapt 24% to $211m.

Approximately 77m fee-bearing tickets were sold, driven by double-digit growth in international markets.

“Our Q1 results demonstrate that live events remain a priority for fans around the world,” says Live Nation president and CEO Michael Rapino. “Global fan demand is stronger than ever, more artists are out on the road, and more venues are being added to bring them together.

“While operating income will be impacted by one-time accruals, we’re on track to deliver another record year with double-digit AOI growth and years of momentum still to come.”

The firm plans to open at least 12 major venues globally in 2024/25, creating capacity for more than eight million expected additional fans. Major refurbishment of two venues in the US and Mexico is also set to be completed this year.

“Based on the issues we know about, we don’t believe a breakup of Live Nation and Ticketmaster would be a legally permissible remedy”

Speaking to investors during LN’s Q1 earnings call yesterday (2 May), president/CFO Joe Berchtold began by attempting to set the record straight over reports claiming the US Department of Justice’s (DOJ) antitrust division has decided to file a lawsuit against Live Nation, potentially seeking a breakup of LN and Ticketmaster.

“As we previously stated, the DOJ’s investigation appears to be focused on specific business practices, not the legality of Live Nation-Ticketmaster merger or our overall business structure,” said Berchtold. “Very little of the conduct that DOJ has raised with us relates to the combination of ticketing and promotion resulting from the merger. And most of what does was anticipated and addressed by the consent decree allowing the merger to go forward.

“Based on the issues we know about, we don’t believe a breakup of Live Nation and Ticketmaster would be a legally permissible remedy. Live Nation and Ticketmaster came together lawfully through a merger that the DOJ reviewed and approved subject to divestitures and other remedies. The DOJ has repeatedly stated in court filings that the merger and settlement were in the public interest.

“Furthermore, structural relief such as the divestiture is rarely granted. Legally, it’s only available where there is a strong connection between the corporate structure and the company’s ability to engage in the allegedly unlawful conduct. We believe that connection is lacking with regard to the bulk of the issues in this investigation, since the conduct under scrutiny falls either within our ticketing segment or within our concert segment and not across those segments.”

He added: “We’re looking forward to our upcoming meetings with the division leadership and remain hopeful that we can amicably resolve any remaining disputes. But if not, we’re prepared to defend ourselves in court.”

The company says that the leading indicators pointed towards another record year in 2024, with ticket sales for arena and amphitheatre shows, and confirmed shows for large venues, up double-digits, and over 85% of full-year shows at large venues booked.

“The things that we look at that give us an indication of how the shows are selling, how the fans are spending when they go to the site, all continue to be very strong”

“We are seeing no weakness,” said Berchtold. “The things that we look at that give us an indication of how the shows are selling, how the fans are spending when they go to the site, all continue to be very strong.

“Just to hit a few of the highlights: when we look at a number of artists that toured last year and they’re touring again this year, so those are the best like-for-like examples of demand. We’re consistently seeing the sell-through of the shows are at or above where they were last year and that the overall grosses for the artists are consistently higher. So no issues at all on fan demand relative to last summer.”

Fan count for Q1 shows almost doubled for international artists across top 50 global tours compared to five years ago, with ticket sales per show for Latin shows in the US up double-digits year-on-year, US.show count for Afrobeats up 400% and Latin up approximately 40%, with similar trends in Europe.

“Every year, you have the same artists who’ve been touring, back out touring on whatever cycle, and we’re adding in more hours,” stressed Berchtold. “We added in K-pop. We added in Latin. Now we’re adding in Afrobeats. So we’re adding in more artists, which also draw more fans, and that will continue to help with the penetration.

“As we look at the international markets, it’s all a function of how penetrated are they in the major cities where we have a presence. In a lot of markets, we think that there’s the opportunity for driving that through additional venues. In other markets that may be more penetrated like the UK, you’re going to see more of a hyper local strategy, which is why we continue to focus on making sure we got a lot of activity going to Manchester, not just London. So every market is a bit different, but certainly a focus on how we continue to get more fan growth from the biggest to the largest.”

Rapino went on to address the reported challenges facing the European and US festival industries this summer.

“We are seeing probably a shift to more niche one or two-day festivals with higher per heads”

“We have over 100 festivals around the world. I think currently, ticket sales are up double-digits year-over-year, So we’re seeing a strong start to our festival portfolio,” he said. “We’ve launched some new festivals internationally. We launch about 10 new festivals a year. You’re lucky if 50% of them make it to the next year. And I think this year, we started 10, we shut down six. So you’re always kind of cutting off the weak performers and restarting some new ideas.”

He acknowledged, however, that there is an increasing shift away from huge three-day festivals.

“Where we’re seeing great success [is with] one or two-day festivals that are appealing to a more of a niche, and it’s maybe 35,000 people,” he said. “So we are seeing probably a shift to more niche one or two-day festivals with higher per heads, higher sponsorship value and less big swings across, let’s go after a three day 100,000 people.

“There’s still the Coachellas, the Lollapaloozas, the Austin City Limits… But if you’re starting a new one, you’re probably starting a more niche strategy and try to make sure it’s a better experience versus just putting 75,000 people in the field.”

 


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