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WME parent Endeavor posts $1.2bn revenue for Q3

WME’s parent company Endeavor has praised the resilience of live events after posting Q3 2022 revenue of $1.221 billion.

Endeavor, which owns properties such as sports agency IMG and the Ultimate Fighting Championship (UFC), recorded a net loss of $12.5 million for the quarter, but has upped its adjusted EBITDA guidance for 2022 as a whole by $10m in recognition of “continued strength across the business”.

“Our business performed well in the quarter despite a turbulent macroeconomic environment,” says Endeavor CEO Ariel Emanuel. “Given our unique positioning relative to a set of highly resilient secular industry trends across premium sports and entertainment content and live events, we remain confident in our ability to continue delivering on our long-term growth strategy while also being good stewards of capital.”

WME artists include Drake, Justin Timberlake, Adele, Bruno Mars, Pearl Jam, Kendrick Lamar, the Killers, Bjork, Frank Ocean, Foo Fighters, St Vincent and Shakira, with Snoop Dogg joining its ranks earlier this week.

Revenue from Endeavor’s representation segment was $388.3m for the three-month period, down 42% on the third quarter of 2021.

“Spending habits have shifted, but our company has a presence at every point on the purchase chain”

“The decrease was primarily due to $334 million of revenue in the prior year from the restricted Endeavor Content business, which was sold in January 2022,” says the firm. “The decrease was partially offset by continued strong demand for talent including the recovery of music and comedy touring, as well as increased corporate brand spending at [creative agency] 160over90.

Elsewhere, revenue for its owned sports properties segment was $402.3m for the quarter, up 39% on Q3 2021, while revenue from events, experiences & rights segment was down 1% to $440.6m, partially offset by growth in music and other events.

“Spending habits have shifted, but our company has a presence at every point on the purchase chain,” Emanuel told investors. “During Covid people were buying stuff, and post-Covid, they are more focused on experiences, and we are the benefit of that side of the equation.”

Full-year revenue is expected to be between $5.235bn and $5.325bn, while adjusted EBITDA is forecast to be between $1.145bn and $1.175bn, adds the company, which notes it repaid $250m of debt in the third quarter with the intent to repay an additional $250m by the year’s end.

Endeavor named Richard Weitz and Christian Muirhead as co-chairmen of WME in September, while Lucy Dickins was elevated to the position of WME global head of contemporary music and touring in August.


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Live Nation share price hits all-time high

Live Nation‘s share price has rocketed to an all-time high less than 24 hours after the firm released its Q3 financial results.

Stock in the company was up 16% to $122.13 at press time, having peaked at $125.88 earlier in the day following chairman and CEO Michael Rapino’s bullish projections during yesterday’s earnings call. The share price broke $100 for the first time only last month.

Rapino told investors that 2022 was on track to be a record year after the company reported revenue of $2.7 billion (€2.3bn) for the quarter. He said ticket sales for the 2021 summer season “reflected tremendous pent-up demand”, with 17 million fans attending Live Nation shows.

The promoter, which recorded a $19.8m loss for the same period in 2020, returned to positive operating income and AOI for the first time in two years, with a company-wide operating income and AOI of $137 million and $306m, respectively.

“Festivals were large part of our return to live this summer with many of our festivals selling out in record time, and then overall ticket sales for major festivals was up 10% versus 2019,” said Rapino, who referenced upcoming sell-out tours by Harry Styles and Chris Stapleton.

“Through mid-October, we have already sold 22 million tickets for our shows in 2022 and demand has been stronger than ever for many of these on sales, with a million tickets sold for each of the Coldplay and Red Hot Chili Peppers tours, and several other tours already selling over 500,000 tickets,” he added.

No industry has so proven the durability of its demand in the face of such disruption

Live Nation’s Ticketmaster division, meanwhile, delivered revenue of $374.2m for the quarter and has already sold 65m tickets for next year.

“As we get close to turning the page in 2021, I remain more convinced than ever in the power and potential of live entertainment, and the strength of our position,” added Rapino. “No industry was more impacted by the pandemic over the last two years, and no industry has so proven the durability of its demand in the face of such disruption.

“I fully expect we will continue to have bumps in the road in the coming months. And it will take some time for international artists to be touring on a truly global basis. But the fundamental strength of live entertainment and Live Nation has proven out and expect we will only continue to grow from here.”

Speaking on the company’s earnings call, Live Nation president and chief financial officer Joe Berchtold said the resurgence had been driven by the UK and US.

“These markets accounted for 95% of our fans in Q3 versus 75% in Q3 of 2019,” he said. “And they represented 90% of fee-bearing GTV in Q3 versus 80% in Q3 of 2019.”

With concerts in North America and the UK already back in full flow, Rapino discussed when the rest of the world was likely to open up.

The good news is ’22 is going to probably be a record year

“Europe will be fully open by the end of the year, so we’ll have most of the main markets open into January,” he said. “Pacific Rim, Latin America, all looks positive in terms of being open fully for international artists by April. We think internationally, on a global basis, by April the world will be moving around again.

“It doesn’t overly affect our business short-term because most of the outdoor stadium festival business is summer time, so that will be all fully up and rolling. We have Lollapalooza starting in April in Latin America and Australia festivals. So we think we’ll be open for prime season and we’ll be rolling around indoors in the main markets of US, Europe, Canada, and the UK between now and April.”

Rapino also expanded on his expectations for 2022 and beyond.

“The good news is ’22 is going to probably be a record year, but there’s only so many Fridays and Saturdays and artists are pretty smart about how they route their tours and how they look at the world and find their right positioning, so it kind of self-regulates itself,” he said.

“You’re never going to have a bunch of tours on the same weekend piled on. So that just meant we have a more inventory to spread into ’22, ’23, and we’re talking ’24 now. So I would say we have a backlog that needs to still work through the system in ’22, ’23, which will be incredibly strong years. And then we continue to get back to regular.

“We’ve had over the year, double-digit growth in the live entertainment space ongoing. We project that to continue both on pricing and global volume as demand and supply continues to grow around the world.”

In a further sign that investor confidence in live music is returning, shares in CTS Eventim have risen from €63 to €72 since the start of the week.


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