Live Nation ’05 Financials

Live Nation’s first set of financials as a new company were released February 21st, and despite taking a net loss of $130.6 million for the year ended December 31st, Wall Street responded with a spike of nearly $1 per share on LYV stock.

The overall loss was rung up in the fourth quarter, as the company prepared for its December 22nd spinoff from Clear Channel Communications. Whether it means anything other than spinoffs can be expensive is a question that will be answered by future quarterlies but, for now, investors – and Live Nation CEO Michael Rapino – seem to be happy with the results.

“The fourth quarter of 2005 represented a new beginning for our company,” Rapino said in a statement announcing the results. “We entered the public markets on December 22nd as an independent company under new leadership, with a new strategy, identity and a strong balance sheet.

“Our primary focus during the fourth quarter was on rightsizing our cost structure and tightening our strategic and operational focuses. We exited non-core businesses, reduced our workforce by 10 percent and streamlined our reporting structure, realigning 12 separate business units into six,” Rapino said.

In Live Nation’s fourth quarter, the company not only finalized its split from Clear Channel but completed a $610 million credit agreement, named a new board of directors and announced a $150 million stock buyback.

In the new year, Live Nation hit the ground running with the announcement of a 15-year management deal for London’s Wembley Arena and finalized the sale of its sports agency to Arn Tellum. The company is now free to focus on the concert business, as well as the fan, according to Rapino.

“In short, our new strategy is to provide value to artists and fans before, during and after the live event. By expanding our relationships with our customers beyond the two-hour experience of the show, we believe we can further unlock value in our key assets: our 149 venues that we own, manage or book, our global and national touring platform, and the 60 million fans who attend our events.”

The increased losses in the global music division were a result of $4 million in litigation contingencies and expenses, $12 million due to reorganization and reductions in personnel and $3 million in writeoffs of advances on certain music projects, the company said.

Live Nation has moved quickly toward establishing itself as a new brand now that it no longer has the “Clear Channel” yoke. The company has eliminated the heritage names from regional promoter offices, including Pace, Belkin Productions and Cellar Door. The change also applies to the Bill Graham Presents unit in San Francisco, although they continue to use the BGP moniker in all public advertising.

As for Clear Channel Communications, the split was good for the former parent company, too. Clear Channel announced, also on February 21st, it earned $461.6 million in 4Q 2005 – including a tax benefit of $314.1 million directly related to the spinoffs of Live Nation as well as 10 percent of its outdoor advertising business.

– Deborah Speer