Live Nation Q1 Losses Widen

Live Nation posted a $102.7 million, or $1.29 per share, first-quarter loss May 7, which CEO Michael Rapino called “in line with expectations” during the traditionally slow period for concert attendance.

It may have been in line with Rapino’s expectations, but apparently it was not for financial analysts polled by Thomson Reuters that expected a loss of 74 cents per share.

The Q1 loss compares with a loss of $37.2 million, or 50 cents per share, from a year ago, which had been bolstered by 42 cents per share of income from the sale of its North American theatrical business, motor sports division and a business related to producing and selling concert DVDs.

Rapino pointed out that Live Nation continues to divest non-core assets, including the just-announced sale of three Boston venues to another company that happens to be headed up by Don Law, LN’s New England regional president.

Revenue fell 6 percent to $499.3 million, well below analyst exceptions of $561.8 million. In the North American division, revenue dipped 4 percent to $322.2 million, with attendance down 23 percent to 4.2 million compared to last year.

Rapino said that, to date, including sales for U2’s stadium tour and Madonna’s European trek, attendance is closer to 6 million “as of yesterday.”

Live Nation’s international division fared much better, as attendance rose 17 percent to 3 million. However, it didn’t translate into big gains with Rapino citing $48.6 million in negative changes in foreign exchange rates, particularly for the U.K. pound and Swedish Kroner.

With the Q1 report, Live Nation Artists ceases to be a separate division, and its activity will be reported under North America and Global divisions as appropriate, leaving those divisions along with Live Nation Ticketing as the three core units.

Rapino put his best face forward during an earnings call with investors and analysts, saying first quarter figures are not indicative of what to expect for the year, since it’s traditionally the slowest three months in the number of concerts and attendance.

“We are very optimistic for the full year ahead,” he said, basing his rosy outlook on metrics of new operating income from 2008 investments, increased international ticket sales and an increase in per-head spending by fans, particularly at amphitheatres.

Revenue per fan climbed nearly 6 percent to $66.50. Rapino reported that increasing in-venue spending in North America is a key strategy, with higher margins on food and beverage thanks to last year’s deal with SMG and Aramark.

He said LN plans to tweak offerings by reducing the number of items sold and increasing sales of venues’ most popular items and increasing ancillaries such as souvenir photos and early access packages.

Sponsorship remains a concern with the downward spiral in advertising and spending, Rapino said. The number of Live Nation sponsors dropped 42 percent to 304 from 528, but total sponsorship revenue climbed 17 percent to $21 million and the average per-sponsor revenue more than doubled to $69,000.

Live Nation also reported that as of March it had $696.2 million in deferred revenue – sales for summer concerts and other events that have yet to take place. That’s higher than $560.4 million in the year-ago quarter.

The company sold 4.2 million tickets through a new ticketing platform launched in January after ending a long-term contract last year to sell concert tickets through Ticketmaster, the world’s biggest seller of tickets to concerts and shows.

The end of that agreement looked to cut into at least 15 percent of Ticketmaster’s revenue and put the two companies into fierce competition for ticketing contracts. In February, though, the two parties said they agreed to merge.

Rapino revised somewhat his earlier prediction of the closing date for the proposed merger from the end of the second quarter to as late as year-end. A shareholder vote is expected in late July or early August.

The companies have said they are cooperating with Department of Justice requests for information regarding their proposed merger. Artists have expressed worries that the deal would result in a near-monopoly on ticket sales to big concerts.

The company’s shares fell 6 cents in after-hours trading, after finishing regular trading down 37 cents, or 6.7 percent, at $5.14.