LN Talks Artist Fees

Live Nation CEO Michael Rapino told a Sept. 16 investors’ conference that the company is making good on executive chairman Irving Azoff’s July promise to analysts to lower artist guarantees in 2011.

Rapino told the Bank of America Merrill Lynch Media, Communications and Entertainment Conference in Newport Beach, Calif., the company is also within “striking distance” of meeting its lowered fiscal projection for the year. That good news for investors and likely helped boost LYV’s share price from $9.22 the day of the conference to a Sept. 25 high of $10.25.

Live Nation seems to be generally recovering from a selloff triggered during a disastrous July investors meeting at Irving Plaza in New York City. In fact, the share value has risen steadily – save for a few hiccups – since late August, when it hit recent a low of $8.43 not long after the meeting.

What most likely encouraged investors were Rapino’s remarks about reducing costs – chiefly through lowered artist fees – and focusing on profitability more than market share in the coming year.

Rapino told the Merrill Lynch group that although the company did make a profit in 2009 despite the down economy and the sale of fewer tickets than in 2008, his team was not prepared for 2010.

“We didn’t expect the consumer pullback that happened,” he told the gathering. “We all thought the theory that concerts are recession-proof is true.”

He assured investors that Live Nation was making an effort to reduce artist guarantees, which many in the industry point to as the primary culprit behind soaring ticket prices that many concertgoers are no longer willing to pay.

Without naming names, Rapino did acknowledge there’s been some pushback from artists to reduce those guarantees. But while artists have some leverage if they’re willing to stay off the road in protest, LN has some thunder of its own simply by having many of those artists’ managers and tour promoters under the same roof.

“Have we started going to artists and saying, ‘No, we’re not going to offer you that much’ … And are we getting some pushback? Yeah,” Rapino said. “But are we getting to the right deal points we’re looking for? Yes.”

Rapino also pitched the company’s e-commerce efforts, and suggested Live Nation is looking at acquisitions of international management firms via Front Line Management.