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Another year of record growth for Live Nation

As predicted by CEO Michael Rapino in November, Live Nation Entertainment has posted a seventh consecutive year of record-breaking growth, turning over nearly an extra US$2bn – a remarkable 24% increase in revenue – in 2017.

Speaking to investors yesterday, Rapino (pictured) said he sees “strong growth for years” in the global concert market, of which Live Nation is by far the biggest player, “as fans globally drive demand, artists are touring more, and sponsorship and ticketing benefit from the concerts flywheel”.

That value of that flywheel grew even more, with LN’s concerts division worth $7.9bn (up 26%) in 2017, while concert attendance – from a reported 30,000 shows in 40 countries – grew 21% to 86 million. “Given our plans to further monetise our fan relationships, I expect this will translate into a continued strong growth in concerts AOI [adjusted operating income] in 2018,” said Rapino.

Across the company as a whole – including sponsorship and ticketing (Ticketmaster) – revenue was up 24%, AOI up 15% and free cash flow up 21%, with all delivering their strongest-ever AOI results.

Losses did, however, widen in the fourth quarter (Q4) of 2017, as a result of the company’s $110m legal settlement with Songkick.

Among Ticketmaster’s greatest successes in 2017, continued Rapino, was the introduction of the Verified Fan initiative, which aims to verify the ticket-buyer is a genuine “fan” by asking them to register for a presale in advance, then emailing codes to buyers it predicts will use the ticket rather than resell it.

“In 2018, I expect us to further consolidate our global concerts position”

“Through the year, we worked with over 80 artists on Verified Fan, selling three million tickets and saving fans over $100 million relative to what they would have spent on the secondary market to buy these tickets,” he said. “As we look to 2018, it will continue to be a top priority to evolve Verified Fan, while also building out a full suite of services that continue to give artists greater control of how their tickets are priced and distributed.”

However, “at the same time,” Rapino continued, “we’ve also continued to improve our marketplace, already by far the largest ticketing marketplace in the world. We remain focused on building the inventory available to fans, adding new clients and expanding our secondary listings.”

Looking ahead to 2018, Rapino expects Live Nation “to further consolidate our global concerts position while enhancing our on-site hospitality business and capturing additional pricing opportunities.

“We believe that our sponsorship business will continue driving double-digit growth as more brands look for that direct connection with music fans. And a more effective Ticketmaster marketplace, along with further alignment with artists, should continue to build on Ticketmaster’s success.”

“The combination of macro trends and our demonstrated ability to execute provide great confidence in our ability to grow the business for many years to come,” he concluded.

 


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Record Q4 2016 for StubHub

StubHub had a record-breaking fourth quarter (Q4) of 2016, growing revenue to US$279 million and gross merchandise volume (GMV) to $1.2 billion.

That compares to $263m revenue and $1.1bn GMV – the value of goods sold – in Q3, and equates to year-on-year growth 20% and 5%, respectively.

While StubHub once again outperformed the core marketplace business of its parent company, eBay – which recorded revenue growth of 4% (to $1.9bn), and a 5% increase in GMV (to $21.1bn) – it was also a record quarter for the eBay group as a whole, which reports turnover of $2.4bn on a constant-currency basis.

According to eBay president and CEO Devin Wenig, StubHub’s growth was largely driven by “strength in its baseball and theatre genres”.

StubHub’s growth was largely driven by “strength in its baseball and theatre genres”

Commenting on the results, Wenig (pictured) told investors: “Q4 was a record quarter highlighted by solid performance in our eBay business. During the holiday [Christmas] season, eBay was one of the top consumer shopping destinations in the world and the second most visited e-commerce site in the US.

“In 2017, we intend to accelerate the progress we made last year as we continue to execute our business strategy.”

Perhaps conscious of the growing international backlash against secondary ticketing, StubHub president Scott Cutler earlier this month announced plans for expansion beyond ticket sales, including into transport, accommodation and dining.

 


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DEAG ‘on course for record Q4’

Deutsche Entertainment AG (DEAG) is on course for its best financial quarter in five years, it said today, as it returns to profitability following a €23 million loss in 2015 incurred by the launch of three new festivals.

The German promoter lost €6.8m in the first nine months of 2016 – affected by a “low event density and […] negative effect from exchange rate conversions” as a result of the post-Brexit slump in the pound sterling, according to its third-quarter (Q3) financial results – compared to -€11.6m in the same period of 2015 (a 41.6% increase).

Echoing comments made in August by chairman Peter LH Schwenkow, who praised the company’s “very well-filled event pipeline”, the DEAG board says it “expects the financial year 2016 to finish with a clearly positive adjusted operating result after depreciation and amortisation”, pointing to Christmas family events Christmas at Kew, Christmas at Blenheim and Christmas Garden Berlin, family shows Disney on Ice and Marvel Universe Live! and “many great tours, like the Red Hot Chili Peppers, Böhse Onkelz [and] David Garrett” as fourth-quarter highlights.

It also hailed “disproportionate organic growth in the UK [from subsidiaries Kilimanjaro Live and Raymond Gubbay] thanks to sold-out events, inter alia at the Royal Albert Hall”.

Despite the improved profit margins, sales revenues have so far declined, from €27.6m to €19.1m, hit by the weak pound, legal fees and the cost of the expansion of its ticketing subsidiary, MyTicket, into Austria.

 


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