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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:

Live music down 64% this year – but will rebound in 2021


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T4F sells stock-car biz to focus on music

Time for Fun (T4F Entertainment) has sold its shareholdings in Vicar Sports Promotions, the promoter of Brazil’s popular Stock Car and Stock Car Light racing series, to focus on its core live music business.

Sao Paulo-based T4F is South America’s leading live entertainment company, promoting shows and festivals and running venues in Brazil and Argentina. It has been in control of the Nascar-inspired Stock Car series since 2006.

The sale of Vicar, to Veloci Investments, is “aligned to the company’s strategic planning in order to increase its efforts to the promotion of major music festivals and live concerts, as well as family events and theatre”, according to T4F’s CFO, André Pinheiro Veloso. T4F’s festivals include Lollapalooza Brazil and Popload Festival.

The proceeds will reinforce Time for Fun’s cash position, he adds.

Similarly to other public live entertainment businesses, T4F saw its turnover decline 98% in the second quarter of 2020 as touring ground to a halt.

 


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Cash reserves intact as T4F revenue falls 98%

Time for Fun (T4F), South America’s largest live entertainment company, saw its turnover decline by 98% in the second quarter of 2020, its latest earnings release reveals.

Brazil-based T4F, which trades on Sao Paulo’s B3 stock exchange, reported revenue of R$2.6 million (US$475,425) in Q2 2020 – down from R$132.4m (US$24.2m) in the same period in 2019. For the half-year ending 31 June 2020, the figure is R$35.1m (US$6.4m), a decrease on 86% on H1 2019’s R$253m (US$46.2m).

In losing 98% of its revenue in Q2 2020, T4F is in good company: US-based Live Nation, the world’s biggest live entertainment firm, experienced the same decline in the same period.

Profit figures were even more bleak, with earnings before interest, taxes, depreciation and amortisation (ebitda) falling 585.5%, leaving T4F with a Q2 loss of R$15.5m (-US$2.8m).

Cost-cutting measures have delivered a 36% reduction in expenses

However, the company – which promotes concerts, festivals and theatrical shows, and sells tickets as Tickets 4 Fun – can take comfort in the fact that 50 events, worth 327,000 tickets, have been rescheduled for when large-scale shows are allowed again, while previously announced cost-cutting measures have delivered a 36% reduction in expenses compared to 2019.

This “cash maintenance” plan, it says, means the group has lost a comparatively low R$4.6m (R$1.7m net) compared to Q1 2020.

Its cash reserves as of the end of June were $217.9m ($39.8m) gross and $57.2m ($10.4m) net.

The full Q2 2020 financial report is available from the Time 4 Fun website.

 


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T4F directors quit as part of cost-cutting measures

Time for Fun (T4F), South America’s largest live entertainment company, is proposing to shrink its board of directors as part of ongoing cost-cutting measures in response to the coronavirus.

T4F, headquartered in Sao Paulo, Brazil, has already accepted the resignations of three directors – Luciano Nogueira Neto, Maurizio de Franciscis and Guilherme Affonso Ferreira – and further proposes to reduce the size of the board at its next shareholders’ meeting on 22 July, according to a market notice issued by the B3-listed company on Monday (22 June).

Fernando Luiz Alterio, vice-president of the board, will continue to fill in as interim chairman until the appointment of a new chair, the company adds.

A programme of cost-cutting was originally implemented at T4F in March, shortly after the postponement of its flagship festival, Lollapalooza Brazil.

Last month, in its Q1 earnings report (which showed initial Covid-19-related losses of R$5.1 million (US$986,200), the promoter outlined further money-saving measures, including a 30% reduction in staff numbers (compared to March), two-month lay-offs for 17% of remaining staff, and the suspension of contracts with suppliers.

 


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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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Kylie, Little Mix to play all-female T4F festival

LittleBrazil’s Time For Fun (T4F), the largest live entertainment company in South America, is launching GRLS!, a new two-day festival celebrating the role of women in music.

Kylie Minogue and Little Mix are heading up the event’s all-female line-up, which also features US rapper Tierra Whack and Brazilian acts Linn da Quebrada, Gaby Amarantos and Mulamba.

Curated by Brazilian music platform Popload, GRLS! is taking place on 7 and 8 March – International Women’s Day – at the Latin American Memorial in São Paulo.

Talks, lectures and workshops focusing on the role of women in culture will also form part of the event’s programming.

“Our main goal was to design a festival made by women and non-binaries, that would also lead to an all-gender debate about the role and representation of women in our culture”

“Our main goal was to design a festival made by women and non-binaries, that would also lead to an all-gender debate about the role and representation of women in our culture,” explains Paola Wescher, T4F artistic director and Popload partner.

“Women always have to try harder, impose themselves more and achieve more to be respected. We have many strong women in all sectors of the music industry, both on stage and behind the scenes, making everything happen. We want to amplify these voices and be a milestone in this regard.”

More information can be found here.

 


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T4F’s Credicard Hall becomes UnimedHall

Brazil’s Time 4 Fun (T4F), the largest live entertainment company in South America, has secured a new naming-rights agreement for its venue in Santo Amaro, Sao Paulo.

The 7,500-capacity theatre formerly known as Credicard Hall is now called UnimedHall, with health cooperative Unimed becoming its naming sponsor for the next five years.

Since opening in 2000, UnimedHall has hosted performances by artists including Oasis, Kylie Minogue, Avril Lavigne, Demi Lovato and BTS.

T4F’s other venues include the KM de Vantagens Hall (8,450-cap.) in Rio de Janeiro and the Renault Theatre cinema in Sao Paulo.

 


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Public live companies grow $1bn+ per quarter since 2017

The major publicly traded live entertainment companies have increased their collective market value by more than US$8 billion in just two years, reflecting growing investor confidence in the industry.

Analysing the market capitalisations of Live Nation, CTS Eventim, Madison Square Garden Company, Deutsche Entertainment AG and Brazil’s T4F Entertainment (Time 4 Fun), as well as eBay’s StubHub and Vivendi’s live businesses, reveals the seven were worth around $8.4bn more at the end of June 2019 than in the same period two years previous.

The bulk of the heavy lifting was done by market leader Live Nation, whose share price stood at $66.25 at the end of the first half (H1) of the 2019 financial year. Journalist and stock-market analyst Manfred Tari notes that LN stock has in recent years vastly outperformed the Dow Jones Industrial Average, which tracks the value of 30 large public companies in the US.

“Since August 2016, the Dow Jones has recorded gains of more than 40%,” he observes. “Meanwhile, Live Nation shares have gained more than 40% since August 2018, boosted by positive analyst ratings and institutional investors raising their shareholdings.”

Nevertheless, five of the seven companies increased their market cap in that time – with only eBay, whose StubHub ticketing business accounts for just an eighth of its turnover, and T4F down in value.

“We hear a lot of talk about the ‘experience economy’, and these figures reflect that”

Several companies were not included in IQ’s analysis: Liberty Media (FWONK) owns a third of Live Nation, but its stake in LN represents its sole live activities, while Eventbrite (EB) only floated at the tail end of 2018. Other smaller listed businesses include British virtual-reality company MelodyVR (EVRH), US live-streaming firm LiveXLive (LIVX) and Singapore-based promoter Unusual (UNU).

Interestingly, over $7bn (~85%) of the two-year growth was added in the first seven months of 2019 alone, with live businesses’ performance on the markets generally accelerating this year, despite economic uncertainty around issues like Brexit, the US-China trade war and looming recession in Germany.

“We hear a lot of talk about the ‘experience economy’, and these figures reflect that,” comments industry economist Chris Carey. “As the cultural shift towards experiences and moments, especially those with social capital, continues, live entertainment is well placed to capitalise.”

In the streaming sector, Carey also highlights the “smooth” initial public offering (IPO) by market leader Spotify, which undertook an unconventional ‘direct listing’ of its shares on the NYSE in early 2018. “It’s important not to overlook the success of the Spotify IPO,” he says.

“While it didn’t set the world alight, the smooth listing on the NY Stock Exchange bolstered the market’s confidence in music streaming, which in turn has driven share price growth for Vivendi.”

In more detail, here’s how each of the core seven stack up:

 


Live Nation Entertainment (LYV)

H1 2019 share price (market cap): $66.25 ($13.88bn)
H1 2017 share price (market cap): $34.80 ($7.16bn)
Two-year change: +90.37%

The value of Live Nation’s shares has grown at an astronomical rate over the past four half-year cycles, jumping from under $50 to over $70 in 2019 alone.

The live entertainment giant, which includes concerts, sponsorship and ticketing (Ticketmaster) divisions, posted its eighth consecutive record annual results in 2018, with revenue topping $1.7bn – and is on course to deliver more of the same, including a double-digit increase in operating income, according to CEO Michael Rapino.

Live Nation’s shares outperformed the S&P 500 index throughout the H1 2017–H1 2019 period, and Wall Street sentiment remains positive: according to the Motley Fool, a clear majority of analysts give LYV a ‘buy’ rating (indicating an undervalued stock).

“LN shares have gained more than 40% since August 2018, bolstered by positive analyst ratings and institutional investors”

CTS Eventim (EVD)

H1 2019 share price (market cap): €40.92 (3.93bn)
H1 2017 share price (market cap): 39.24 (3.77bn)
Two-year change: +4.28%

CTS Eventim, the German ticketing and promotion powerhouse, saw its Börse Frankfurt-listed shares reach their highest price to date (€46.88) late last month, on the back of plans to acquire a significant stake in Fnac’s France Billet. Its market cap also climbed to a record €4.5bn.

At the time of IQ’s end-of-June snapshot, shares were trading at just shy of €41 – up from around €33 in January 2019 following a record-breaking 2018 and strong start to 2019.

Analysts are largely bullish on Eventim’s future growth potential, with MarketBeat listing five buys, two ‘holds’ and one ‘sell’, indicating a buy consensus, as of 14 August.

Eventim’s shares reached a record price in July, and analysts are bullish on its growth potential

Madison Square Garden Company (MSG)

H1 2019 share price (market cap): $279.94 ($6.65bn)
H1 2017 share price (market cap): $200.50 ($4.72bn)
Two-year change: +39.62%

New York-based Madison Square Garden Company, best known for its portfolio of US arenas and sports teams, made headlines in early 2018 when it revealed plans for its first international venue, in London, based on the spectacular MSG Sphere concept. The company has also diversified into esports, and has been identified as a key gaming-related stock.

Speaking during the company’s Q3 2019 earnings call, MSG CEO Jim Dolan hailed the “important progress” made with the MSG Sphere project in 2019, as well the impending spin-off of its sports business. “We remain confident that we are executing on a plan that positions us for long-term growth,” he told investors.

MSG stock has outperformed the S&P 500 consistently since March 2018, and holds a buy rating (seven buys and one hold) as of 13 August.

“We remain confident that we are executing on a plan that positions us for long-term growth”

DEAG (ERMK)

H1 2019 share price (market cap): 4.27 (€78.57m)
H1 2017 share price (market cap): 2.48 (45.63m)
Two-year change: +72.18%

While still small compared to the likes of CTS Eventim, Berlin-based DEAG, which celebrated its 40th anniversary in 2018, has grown its market capitalisation by nearly 75% since 2017, boosted by a string of acquisitions in Germany and the UK (the latter through promoter Kilimanjaro Live) and success in concerts, family entertainment and ticketing.

According to the company’s Q1 2019 earnings report, analysts monitoring DEAG stock give its shares a target price of between €5 and €7, with four buy ratings and one ‘outperform’ (ie a moderate buy).

DEAG has grown its market capitalisation by nearly 75% since 2017

T4F (SHOW3)

H1 2019 share price (market cap): $1.31 ($88.2m)
H1 2017 share price (market cap): $1.52 ($106.14m)
Two-year change: -14.3%

On a constant-currency basis, Sao Paulo-based T4F Entretenimento has shrunk slightly in the past two years, reflecting economic uncertainty in many South American markets where it is active.

In its 2018 year-end financial statement, T4F CEO Fernando Alterio highlighted political turbulence and hyperinflation in Argentina and Brazil as negatively affecting demand for tickets, but noted that the company expects to return to “historical levels of activity” this year. Despite these challenges, T4F sold nearly two million tickets last year, for a net revenue of R$598 million ($148m).

Analysts, too, are confident: BTG Pactual, which gives Time 4 Fun stock a buy rating, in April set a price target of R$11 for its shares – more than double the R$5 it is today, and a price it hasn’t hit since early 2018.

T4F expects to return to “historical levels of activity” this year

Vivendi (VIV)

H1 2019 share price (market cap): $27.43 ($33.78bn)
H1 2017 share price (market cap): $23.06 ($28.38bn)
Two-year change: +18.95%

Vivendi’s live (Olympia Production, U Live, festivals and venues in France and Africa) and ticketing (See Tickets, Digitick) businesses accounting for just under 0.9% of its revenue – €64m ($70.9m), of €7.35bn ($8.14bn), per its H1 2019 report – or around $54m of the French conglomerate’s two-year market cap growth.

With reports the company is planning a sell-off of up to 50% of Universal Music Group (H1 2019 revenue: $3.3bn), including 10% to China’s Tencent, expect that percentage to increase in years to come.

“It will be interesting to see how the global live companies engage with emerging markets”

eBay (EBAY)

H1 2019 share price (market cap): $39.50 ($34.43bn)
H1 2017 share price (market cap): $35.31 ($38.22bn)
Two-year change: –11.87%

As per eBay’s 2018 annual report, StubHub’s net transaction revenues were $1.1bn, out of $8.485bn total, the secondary ticket marketplace accounting for around an eighth of eBay group turnover.

That puts StubHub’s share of the $3.79bn wiped off eBay’s market cap over the past two years at just shy of $500m, though eBay Inc.’s share price is actually up by about 40% this year, more than double the S&P 500 Index – albeit largely in response to rumours it plans to offload StubHub, a move advocated by many activist investors.

 


Looking to the future, adds Carey, market-watchers should also keep an eye on the growth potential of developing countries. “It will be interesting to see how the global live companies engage with emerging markets,” he concludes.

“I’d anticipate an increase in activity within those geographies, but also a growth in talent from those markets being exploited in the established markets, too.”

 


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Alexandre Faria to spearhead LN Brazil launch

Responding to what it calls a “growing demand for live events throughout Latin America”, Live Nation has announced its expansion into Brazil under Alexandre Faria Fernandes, who joins as director and senior vice-president of talent buying.

Faria was previously chief entertainment officer at Time for Fun (T4F), South America’s leading regional promoter, which he left earlier this month, replaced by Planmusic founder Luiz Oscar Niemeyer. In 17 years at T4F (previously CIE Brasil), Faria worked on tours for U2, Foo Fighters, Coldplay, One Direction and Madonna and festivals including Lollapalooza Brasil and Electric Daisy Carnival.

At Live Nation Faria will report into Bruce Moran, the company’s president of Latin America. In his new role, he will focus on booking and promoting shows for major acts visiting Brazil, the continent’s largest live entertainment market.

“Cities throughout Brazil are becoming key tour stops as more global artists visit their fans in Latin America”

“I’m excited to join the Live Nation Latin America team during a time with so much opportunity and development,” he comments Faria. “Together, we will bring the people of Brazil and Latin America stand-out performances from international artists, as well as local talent.”

Moran adds: “Cities throughout Brazil are becoming key tour stops as more global artists visit their fans in Latin America. The knowledge, relationships and passion Alexandre Faria displays for promotion makes him a great asset to Live Nation as we continue to expand concert offerings to meet growing demand across Brazil.”

Shows produced by Live Nation Latin America in 2017 include Coldplay, U2, Bruno Mars, Ariana Grande, Sting, Metallica, Paul McCartneyJustin Bieber and Bon Jovi.

 


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T4F names Luiz Oscar Niemeyer head of live music in South America

Luiz Oscar Niemeyer, the veteran Brazilian concert promoter who sold his Planmusic company to Time for Fun (T4F) last May, has been appointed head of T4F’s live music/entertainment activities in all four countries where the company is active.

Niemeyer (pictured) previously held the same role for Brazil, but will now additionally oversee live entertainment in Argentina, Peru and Chile. He replaces former chief entertainment officer Alexandre Faria Fernandes, who T4F thanks for “all his contributions and wishes him success in future endeavours”.

T4F is South America’s leading live entertainment company and one the top-five promoters worldwide. Upcoming shows include Fifth Harmony’s PSA tour, The Wailers in Rio and Sao Paolo, Paul McCartney’s One on One tour and Lollapalooza Brasil next March.

Niemeyer, meanwhile, has promoted some of the biggest live shows in Brazilian history, including Hollywood Rock festival from 1988 to 1993, Paul McCartney’s 1990 concert at the Maracanã, which attracted 184,000 people, and The Rolling Stones’ historic performance to more than 1.5 million people on Copacabana beach in 2006, and is widely credited as the man who put Brazil on the international touring map.

 


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