Touring giants rebound after stock market slump
Touring power players appear to be back on track following a turbulent few days for the stock market.
Markets in the US dipped on Friday and Monday after new data showed the unemployment rate increased from 4.1% to 4.3% in July – its highest level in almost three years – while only 114,000 jobs were added – well down from the 215,000 monthly average over the previous 12 months.
However, the BBC reports that Nasdaq, the Dow Jones Industrial Average and the S&P 500 all witnessed early gains today (6 August). Japan’s Nikkei 225 stock index also surged by more than 10%, having plummeted 12% at the beginning of the week.
Live Nation‘s share price, which opened at US$88.06, advanced almost 3% to $90.57, giving it a $21.25 billion market cap.
The company published its Q2 earnings report last week, posting $6 billion in revenue for the quarter – up 7% on the equivalent quarter in 2023. Operating income rose 21% to $466 million and AOI 21% to $716m, with the key metrics pointing to another record-setting year for the firm.
Shares in Madison Square Garden Entertainment and spin-off Sphere Entertainment have both risen
“We continue to see strong demand globally, with a growing variety of shows attracting both casual and diehard fans who are buying tickets at all price points, which speaks to the unique experience only live concerts can provide,” said Live Nation president and CEO Michael Rapino.
German-headquartered CTS Eventim, which is due to release its half-year financial report later this month, saw a small uptick to €75.55, valuing the pan-European behemoth at €7.38bn.
Shares in Madison Square Garden Entertainment and spin-off Sphere Entertainment have also both risen to $36.24 and $39.30, respectively, ahead of their upcoming financial results for fiscal Q4.
Elsewhere, MENA streaming service Anghami, owner of Dubai-based event management company Spotlight Events, has dipped almost 7% to $0.89 over the past five days, while shares in music company ATC Group, which is listed on the Aquis Growth Market in London, stand at 110p. Plus, Roblox Corp, the firm behind social gaming platform Roblox, saw a 1% uptick to $36.95.
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Touring power players enjoy stock market surge
Live music powerhouses have recorded big six-month gains on the stock market, with CTS Eventim sailing to its highest ever share price.
Shares in the German pan-European ticketing and live entertainment giant reached an all-time high of €77.90 yesterday (19 March) – representing a 13% upswing in the last month and a huge 40% rise on six months ago.
In its latest financial results, published last month, the company reported it had “significantly exceeded” its 2023 forecast thanks to a “very strong” Q4. It enjoyed a record year, attaining consolidated revenue of €2.359 billion – a 22.5% increase on the previous year’s €1.926bn.
“The CTS Eventim share has been in a long-term upward trend since January 24, 2024 and has gained +28.96% in value during this period,” reports Boerse.
Live Nation is also on a significant upward trajectory. Its current price of US$103.47 (€95.31) is 12% higher than a month ago and has leapt 27% over the last six months. The firm posted all-time highs for attendance, ticket sales and sponsorship activity in its financial results for full-year and Q4 2023.
“The live music industry reached new heights in 2023, and demand for live music continues to build,” Live Nation president and CEO Michael Rapino told investors at last month’s earnings call.
Furthermore, Madison Square Garden Entertainment shares have jumped 18.8% in half a year to their current price of $38.87, while shares in its Sphere Entertainment spinoff have seen a 28% uptick in the same period to $46.73.
German live entertainment power player DEAG postponed its return to the Frankfurt Stock Exchange earlier this year
Sphere Entertainment encompasses the first Sphere venue in Las Vegas as well as MSG Networks and Tao Group Hospitality businesses. The company reported revenues of $314.2m for fiscal 2024 Q2, an increase of $154.6m on the prior year quarter, and an operating loss of $159.7m, (up from the prior year’s quarter $109.9m).
In addition, MENA streaming service Anghami, owner of Dubai-based event management company Spotlight Events, has climbed 63% in six months to $1.30, while music company ATC, which listed on the Aquis Growth Market in London in December 2021, has risen from 92.5p to 115p. The UK-based company announced in February 2024 that it had raised £2.3 million through a subscription of 2.2 million shares priced at 105p each.
And Roblox Corp, the company behind social gaming platform Roblox, is up 40.5% since September 2023 to hover at $36.88.
Meanwhile, German live entertainment power player DEAG postponed its return to the Frankfurt Stock Exchange earlier this year.
The group was due to list in Q1 2024 with an offer consisting of a capital increase of €40-50 million, together with an additional offering of existing shares from the holdings of current shareholders. However, it announced that the management board has decided to continue conversations with investors at a later date as it is “currently in advanced conversations with several acquisition targets”.
The Berlin-headquartered firm first went public in 1998 and delisted in January 2021 in the wake of the pandemic after accepting a takeover offer from its largest single shareholder Apeiron Investment Group and its Malta-based subsidiary Musai Capital.
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Live music giants enjoy big stock market gains
It has been a strong week for touring power players on the stock market, with Live Nation, CTS Eventim and Madison Square Garden (MSG) Entertainment all seeing significant gains.
Billboard‘s Global Music Index increased 4.4% to 1,256.06, with 15 of the 21 stocks showing an upswing over the past week. Shares in concert giants LN and CTS were up 8.4% and 9.2% respectively, spurred by recent positive financial results for Q1 2023.
Live Nation posted revenue of $3.1 billion (€2.8bn) for the first quarter – up 73% on the corresponding period 12 months ago – with record results across all divisions. The earnings call prompted a notable uptick in the company’s share price, increasing from $66.76 to $75.91. The stock has since soared a further 12%, standing at $85.13 at press time, boosted by a bullish forecast by CEO Michael Rapino.
“What is clear as we look at our results and operating metrics is that global demand for live events continues to reach new heights – demand has been growing for a long time and is showing no signs of letting up,” said Rapino. “We expect to host a record number of fans this year, even against a 2022 comparison which benefited from rescheduled shows attended by 20 million fans.”
“The results show that live entertainment remains as popular as ever”
It is a similar story at pan-European giant CTS, which reported last week that ticket sales were up 58% on 2022, while consolidated revenue rocketed 163% year-on-year to €366.2m. Shares in the German-headquartered firm jumped 3% to €62.60 and have continued on an upward curve to €64.75.
“The results show that live entertainment remains as popular as ever,” said CEO Klaus-Peter Schulenberg. “Our customers have high expectations when it comes to buying tickets – especially for tours featuring top acts – and we have comfortably met these expectations. Both in Germany and internationally, we are pursuing organic growth and anticipate that our business performance will continue on its successful course.”
But it was MSG Entertainment, which reported a 4% year-on-year rise in revenues to $201.2m for the fiscal 2023 third quarter – its first as a standalone company following its spin-off from Sphere Entertainment – that experienced the biggest uplift. Shares leapt a huge 19.4% amid rumours it is negotiating a $1 billion deal to sell the former Hulu Theater, as Guggenheim initiated coverage of the company with a buy recommendation. The share price increased a further 2% today to $36.54.
“With the completion of our spin-off, MSG Entertainment begins its new chapter as a standalone, pure-play live entertainment company,” said executive chairman and CEO James L. Dolan. “We remain confident in the strength of our assets and brands and believe that we are well-positioned to create long-term value for shareholders.”
“We remain confident that this next chapter for our company will drive long-term shareholder value”
Shares in Sphere Entertainment also improved 6.1% last week and a further 1% today to $24.97. The firm reported an operating loss of $70.3m for fiscal Q3 on revenues of $363.3m.
“As we approach the opening of Sphere in Las Vegas, we remain confident that this next chapter for our company will drive long-term shareholder value,” said Dolan.
Billboard also reports that share prices for HYBE, SM Entertainment, YG Entertainment and JYP Entertainment have increased by an average of 75% year to date.
Elsewhere, Anghami, the largest music streaming service in the Middle East and North Africa (MENA), which acquired Dubai-based event management company Spotlight Events, climbed 1.7% and stands at $1.26.
UK-based music company ATC, which listed on the Aquis Growth Market in London in December 2021, has also seen its share price rise from 90p (€1.03) to 92.5p over the past month. The firm bettered its own expectations to record a profit on revenue of £12.1 million (€13.9m) in its first full year as a a public company.
“We are delighted with the progress we have made in our first year as a PLC, delivering 33% top line growth and profitability earlier than expected, whilst also investing in a number of important strategic developments for the group,” said ATC Group plc CEO Adam Driscoll.
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“Bring on the Roaring ’20s”: $97 target for LN stock
Financial research firm Wolfe Research has begun coverage of Live Nation, assigning the company’s stock an ‘outperform’ (ie strong buy) rating ahead of the resumption of live entertainment activity later this year.
In an announcement, titled ‘LYV: Bring on the Roaring 20s – Initiate with Outperform’, that the company is initiating coverage of Live Nation stocks (which trade on the New York Stock Exchange under the symbol LYV), Wolfe analyst John Janedis says the promoter is “poised for a multi-year cycle of strong growth as the reopening accelerates for a business that will have the tailwind of favourable supply/demand and a structurally stronger margin profile coming out of the pandemic”.
“LN will have the tailwind of favourable supply/demand and a structurally stronger margin profile coming out of the pandemic”
Channelling Marc Geiger in predicting a second “roaring twenties” for live entertainment, Janedis says he also sees Live Nation growing its already dominant market share post-Covid-19 “given its scale and vertical positioning within live entertainment”.
Wolfe has given Live Nation shares a price target of US$97 by the end of 2021. At press time, LYV stocks were worth $85.80; they reached an all-time high of $92.86 on 1 March.
Other analysts covering Live Nation stock include JP Morgan, William Blair, Morgan Stanley and Northcoast Research.
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Live Nation’s share price reaches all-time high
The share price of live entertainment behemoth Live Nation has scaled new heights this week, despite the fact the vast majority of live shows have not been able to take place for the past 10 months.
On Tuesday (19 January), Live Nation’s share price hit an all-time high of US$76.54 – which has more than doubled since its slump to $29.50 in March last year, amid the cancellations and postponements of live shows.
The record-high share price comes after the company acquired a majority stake in Veeps, a ticketed livestreaming platform developed by Good Charlotte’s Joel and Benji Madden.
Veeps is Live Nation’s first major acquisition since the pre-Covid-19 era and a strong indication that livestreamed concerts are here to stay.
Live Nation’s share price hit an all-time high of $76.54 after the live entertainment giant acquired a majority stake in Veeps
“Livestreaming is a great complement to our core business, and essentially gives any show an unlimited capacity,” said Live Nation CEO, Michael Rapino.
“Looking to the future, live streams will continue to unlock access for fans – whether they are tuning into a sold-out show in their hometown, or watching their favourite artist play in a city halfway around the world. The most critical element of live streaming is the artist on stage, and with Live Nation’s unmatched inventory feeding into Veeps, together we will help fans enjoy more live music than ever before.”
Live Nation’s stock has steadily climbed after its 52-week low in March 2020, with the company offering drive-in shows, live streams, and new content through its Live From Home virtual music hub throughout the pandemic.
In November last year, following early results from the world’s first effective coronavirus vaccine, Live Nation share price soared by 22%.
Prior to that, Live Nation-owned Ticketmaster unveiled SmartEvent, a new suite of technology will equip event organisers to meet the evolving needs of capacity, distancing and other logistics.
Live Nation’s share price stood at $74.59 yesterday (21 January).
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Public live cos add nearly $6bn since March crash
The main publicly listed live entertainment companies have added US$5.75 billion – or nearly $1bn a month – to their collective value since the worst of the Covid-19-induced stock-market crash in March, new analysis reveals.
Combining the market capitalisations of Live Nation, CTS Eventim, DEAG, Time for Fun and Eventbrite, as well as a relevant percentage of Vivendi’s business, shows the six companies were worth nearly $6bn more on 21 September than 20 March, in spite of the six-month-and-counting shutdown of nearly all live experiences.
As in previous IQ coverage of live music’s (pre-coronavirus) stock-market performance, Live Nation Entertainment – the world’s biggest live entertainment business – is the biggest mover, growing its market cap by nearly 60% in the period analysed.
Worth $7.29bn on 20 March, with a share price of $33.97, Live Nation (LYV)’s market cap stood at $11.55bn six months later, with most financial analysts confident the concert behemoth will bounce back strongly post-pandemic. As of 9 September, of the 12 firms covering Live Nation stock, seven have assigned it a ‘buy’ rating, one a ‘strong buy’ and one a ‘hold’, with none recommending a ‘sell’.
While the recovery of Live Nation – which has made an estimated $600m in savings this year, believed to include widespread redundancies globally – is impressive, five of the six businesses included have rebounded strongly over the last six months, with only DEAG shares having declined in price as of 21 September.
Berlin-based Deustche Entertainment AG (LOUD), which trades on Frankfurt’s Xetra exchange, had around $11 million (€9.4m) shaved off its market cap after the value of its stocks fell from €3.48 on 20 March to exactly €3 on 21 September. As of the latter date, DEAG’s market capitalisation was €58.9m ($68.9m), down around 14% on €68.3m ($79.9m) six months previous.
Live Nation is the biggest mover, growing its market cap by nearly 60% in the period analysed
Yet DEAG stock, too, is strongly rated by market watchers: analysts’ ratings similarly lean heavily towards a ‘buy’, with even the most pessimistic financial observers giving the company’s stock a price target of €3.50 in the short term (while noting that DEAG should “return to pre-corona levels” by 2022).
Of the other four businesses, another German company, public pan-European concert and ticketing giant CTS Eventim, was the stand-out performer, growing its market cap more than $1bn by adding nearly €10 to its share price.
Compared to 20 March, when its share price was €31.78 and market cap €3.05bn, CTS Eventim (EVD) shares traded at €41.14 six months later, giving the company a market capitalisation of €3.95bn at the time of writing.
Brazil’s Time for Fun/T4F Entertainment (SHOW3) – the largest promoter in South America – has seen its value increase 42%, from R$131m ($23.8m) to R$186.1m ($33.8m), while US-based self-service and club ticketing specialist Eventbrite (EB) is up 61%, growing its market cap from $649.2m to $1.06bn in the same period.
French media conglomerate Vivendi (VIV), meanwhile, has seen its market cap rise from an estimated €20.9bn in March to €26.38bn on 21 September. The company’s Vivendi Village unit – which incorporates its live (Olympia Production, U Live, festivals and venues in France and Africa) and ticketing (See Tickets, Starticket, Paylogic) businesses – accounts for some 0.34% of the business: €26m in revenue, of €7.58bn total, per its H1 2020 report.
Many outside observers agree live music’s recovery will be complete by 2022
While it should be noted the industry is far from back to its pre-Covid-19 value – Live Nation stocks were once worth nearly $75, while Eventim shares hit a high of €60 in January – the rally bodes well for a sector often described as the first to close and last to reopen, and which has been hit particularly hard by the impact of the virus.
Additionally, the live music industry welcomed two newly public businesses – MSG Entertainment, spun off from the Madison Square Garden Company, and Warner Music Live/Umbrella Artists owner Warner Music Group, which floated in April and June, respectively – in the same period, and which would likely have pushed the $5.75bn figure even higher were those companies trading in March.
With so-called second lockdowns looming in many territories, it remains unclear how global markets will perform in the months ahead, as well as the effects, positive or otherwise, any volatility will have on live music stocks.
One thing, however, many outside observers seem to agree on is that live music’s recovery will be complete by 2022.
As IQ revealed earlier this month, financial consulting firm PricewaterhouseCoopers (PwC) is predicting a complete recovery by 2022, with the value of the live music market (public and private) set to reach $29.3bn – over $300m more than 2019’s $28.97bn – that year, while investment bank Goldman Sachs is similarly bullish, with its head of European media research, Lisa Yang, also heralding a return to normal in 2022.
Read PwC’s live music growth predictions here:
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Eventbrite cuts staff by 45% in $100m cost-saving plan
Event management and ticketing company Eventbrite is laying of 45% of its staff – reportedly between 450 and 500 people – as it implements widespread cost-saving measures.
The workforce reduction was announced as part of a cost-cutting plan, with the company looking to reduce annual expenses by at least $100 million.
The move follows layoffs at other companies in the entertainment industry, including Paradigm and WME parent company Endeavor.
Eventbrite expects to spend between $7m and $10m in severance payments, with an additional $3 to $4m in charges related to facilities and fixed assets.
Reports suggest that Eventbrite’s music division has been particularly affected by the cuts.
“The Covid-19 pandemic has caused massive disruption to the live entertainment and experiences economy and we are taking significant action to navigate this unprecedented time,” says Eventbrite co-founder and CEO Julia Hartz.
“The Covid-19 pandemic has caused massive disruption to live entertainment and we are taking significant action to navigate this unprecedented time”
“We are saddened to see many members of our team depart the company and we are supporting them in every way we possibly can during this tumultuous time. I want to personally thank our talented and dedicated teammates for contributing towards building the leading platform for independent creators.”
Eventbrite shares (EB) have dropped by just over 66% since the end of February, falling from $21.76 to $7.36. The company’s share price rose by more than 10% during trading yesterday (8 March), following the news of layoffs.
Shares in Eventbrite have been in decline since March 2019, as the company continued to work on the integration of ticketing platform Ticketfly, which it acquired in 2017 for $200m.
The company’s 2019 financial report saw net revenue increase by 12% from the year before to $327m and losses of $69m, an increase of over $6m from 2018.
Photo: Stefan Wieland/Wikimedia Commons (CC BY-SA 3.0) (cropped)
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CTS and Live Nation shares rally
The stock market reaction to the coronavirus has been dramatic and at times immediate over the last four weeks, but after share prices of the big entertainment companies dipped over 60% in recent week, stocks are now rallying.
The experience economy has been one of the hardest hit since the Covid-19 crisis began, and after 2019 underlined the prosperity of live entertainment in general, it’s a year that may be the overall benchmark of success for some time.
But with most governments announcing extensive support programmes, the share prices of CTS Eventim (EVD) and Live Nation (LYV) are now starting to recover (the former which closed yesterday at €38.22, up from €27.54 on 18 March). And this reaction is further backed by analysts’ estimates.
Christoph Bast, analyst at Bankhaus Lampe entitled his recent research report ‘Out of The Dark’. In a “new base scenario”, Bast said “expect a decline in online tickets by 52% in 2020 and the cancellation or postponement of most of the concerts scheduled for 2020.” He predicts that, “once this crisis is over, CTS Eventim should see a strong concert season in 2021.”
Bast’s previous ‘sell’ rating has changed to ‘buy’ with a redefined price target of €43, compared to €45 before the crisis. Bast’s research is similar to estimates by other analysts, which largely see the ongoing business year as a sabbatical, being back on track in 2021.
With most governments announcing extensive support programmes, the share prices of CTS Eventim and Live Nation are now starting to recover
Rating agencies Moody’s and S&P are more concerned about the current situation of Live Nation, with both agencies adjusting their ratings. Moody’s downgraded its rating to BA3 which details that: “Obligations rated BA are judged to have speculative elements and subject to substantial credit risk”, while 3 stands for: “Issuers rated Prime-3 have an acceptable ability to repay short-term obligations.”
S&P last week declared it was scrutinising its rating for Live Nation as well as for Endeavor (WME’s parent company). Endeavor has long terms debts of $4.6 billion on its books, while Live Nation filed a debt of $3.4bn in its 2019 annual report, up from $2.9bn in 2018.
Published on 24 March, a research report on Live Nation by analyst Jason Bazinet at Citigroup changed the stock from ‘sell’ to ‘neutral’ and set a price target of $35. By close of play yesterday (26 March) Live Nation’s share price had risen to $45.90, a substantial climb given that it had dipped to $21.70 on 18 March.
Ongoing concerns for many analysts now sits around cashflow for a sector that is currently in limbo. And while the likes of Live Nation and CTS Eventim may have more options to restructure credit lines currently, the ability to weather the current situation with enough reserves in the bank affects both mid-sized and small operations alike.
Photo: QuoteInspector.com (CC BY-ND 2.0) (cropped)
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Liberty repays $130m loan, avoids LN stock sale
Liberty Media Corporation has repaid a £130 million margin loan to Live Nation, preventing any sale of its stock in the company.
Liberty, which owns almost 70 million shares in Live Nation, around 34% of the company, states that the payment means “there are no margin or other price triggers that could require a sale of the underlying stock.”
Following the repayment, Live Nation’s share price rose 11%, with the company’s market cap sitting at $7.06 billion.
Liberty, which is led by Live Nation chairman Greg Maffei, holds majority shares in satellite radio giant SiriusXM. The company acquired internet radio, streaming service Pandora Media in 2018 and motorsport series Formula 1 in 2016.
“There are no margin or other price triggers that could require a sale of the underlying stock”
Share prices of all major live entertainment companies have taken a hit in the past few weeks as the spread of Covid-19 continues to cause government-imposed lockdowns, event bans and tour and festival postponements across the world.
Both Live Nation and German live events giant CTS Eventim have seen their price dip by over 40% in the last two weeks due to fears around the virus. Like Live Nation, Eventim has experienced a rebound in the past day, with its share price rising by almost 10%.
The S&P 500 index, a measure of the stock performance of 500 large companies listed on US stock exchanges, has fallen by 29% in the last month. The index inched up by less than 1% following trading yesterday.
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Live stocks hit as coronavirus batters markets
The major publicly traded live entertainment companies have seen the value of their shares decline this week, as stock markets around the world reel from fears over the impact of the Covid-19 coronavirus.
Markets in Europe, Asia and the Americas are suffering their worst week since the global financial crisis of 2008, according to the BBC, with the spread of coronavirus affecting both the global supply chain and consumer demand.
Live Nation CEO Michael Rapino referred to the “resilience” of music fans in the company’s earnings call yesterday (27 February), stating that consumers are still buying tickets worldwide, despite the ongoing spread of Covid-19.
The company’s share price, which reached an all-time high of US$76.08 earlier this month, has fallen by 20% in the past few days, in keeping with the global stock market drop. Shares are back up 2% today, following the publication of strong 2019 financial results.
Shares for German ticketing and promotion powerhouse CTS Eventim have taken a similar hit, falling by just under 20% since last week. Eventim shares reached a record high of €61.30 ($67.27) on 24 January 2020.
“We’re confident that, long-term, the show will happen”
Fellow German company Deutsche Entertainment AG (DEAG), whose shares have climbed almost 30% to €6.30 ($6.92) since mid January, has seen a 22% drop since last week, whereas shares for New York-based Madison Square Garden Company (MSG) have decreased by around 17% in the past week, falling to $261.34.
In Latin America, Sao Paulo-based Time 4 Fun’s shares are also down 22%, from BRL5.41 ($1.20) to BRL4.24 ($0.94). Brazil recorded its first case of coronavirus on Wednesday, marking the virus’ arrival to Latin America.
It is not just live entertainment companies that have suffered in the wake of coronavirus. The S&P 500 index, a measure of the stock performance of 500 large companies listed on US stock exchanges, has fallen 15% from the record high it achieved just last week.
Although coronavirus has already caused the cancellations of thousands of shows across Asia and Europe, not all are worried about the long-term impact. “We’re confident that, long-term, the show will happen,” says Rapino. “The revenue will flow and the fan will show up.”
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