LN Losses Widen In Q2

Live Nation posted wider losses in the second quarter with a drop in revenue and expenses related to its proposed “merger of equals” with Ticketmaster Entertainment.

The company lost $27.2 million, or 33 cents per share, in Q2 2009. Last year at this time, LN reported a loss of $652,000, or 1 cent per share. Revenue fell 6 percent to $1.06 billion, which the company attributed to changes in exchange rates.

Live Nation CEO Michael Rapino did his best to paint a bullish face on the results, saying it was “in line with expectations” and “we remain on track to growing our business in 2009.” But the results were way off track from Wall Street’s expectations.

Analysts polled by Thomson Reuters, who generally exclude items from their estimates, expected a profit of 14 per share on $1.16 billion in revenue.

Besides the dip in revenue, another notable figure is the year-to-date, in which the company lost almost $90 million, including a $10.6 million loss in ticketing alone.

North American Music declined $38.3 million primarily because of an overall decrease in events and attendance at theatres, clubs and other third-party venues, in addition to a decline in House of Blues special events.

And another expense of note was $38 million for acquisitions of De-Lux and Fantasma in North American Music and DF Concerts and other smaller acquisitions in International Music.

Live Nation said it sold 4.3 million tickets in the second quarter, nearly 500,000 of them through its “no service fee Wednesday” promotion. During a question-and-answer portion of the call, Rapino acknowledged artists are not adjusting their guarantees or other demands to reflect those discounted tickets – and even then it’s a nearly negligible piece of the Live Nation summer pie.

Rapino said that with the launching of Madonna and U2 European tour legs in July, the company expects to see most of the benefits from this promotion during the third quarter.

“We believe that any reduction in margin that we sacrifice on the ticket purchase will be more than made up for in incremental ticket sales and additional onsite spending,” said CEO Michael Rapino in a statement.

Estimated total concert attendance declined 2 percent to 13.1 million people in the quarter from 13.5 million people last year, and total revenue per attendee declined nearly 5 percent to $78.16 from $81.82.

The company said its number of sponsors during the quarter totaled 576, down nearly 8 percent from last year, though average revenue per sponsor rose 8 percent to $78,000.

Live Nation also reported a $14.9 million expense related to its proposed merger with Ticketmaster Entertainment, which it expects to complete during the fourth quarter. The companies are still seeking regulatory approval for the deal, which was announced in February.

Opponents of the deal have said it will hurt competition and increase ticket prices for consumers.

And in a bit of a surprise, Live Nation’s 10-K filing with the Securities and Exchange Commission did not include any mention under “Legal Proceedings” of the antitrust suit filed by Seth Hurwitz companies I.M.P and I.M.A. against Live Nation in March.

As previously reported, a federal judge in Maryland on July 17 denied a motion to dismiss filed by Live Nation. The case is ongoing; however, the closest to an acknowledgment was a general statement in the 10-K that from time to time the company is involved in cases “arising in the ordinary course of our business” that include antitrust and tortious interference claims.