LN Q3 Income Up, Attendance Down

Live Nation Entertainment’s overall revenue fell short of analyst expectations in the third quarter as net income rose slightly while revenue from concert ticket sales fell, the company said in a Nov. 3 earnings call.

Third quarter net income rose 1 percent and concert attendance dropped 4 percent to 12.3 million. LN CEO Michael Rapino attributed some of that drop to a reduction in lower-performing amphitheatre dates, adding that internal data shows concertgoers indicate they intend to attend at least as many, and likely more, concerts in 2012.

“We believe the stabilization of consumer demand for live events will continue into 2012 and, looking ahead, we are increasingly optimistic about our opportunities,” Rapino said. “Given the continued fan demand for concerts and a growing supply of artists hitting the road, we are optimistic about the future growth of the global concert industry. Based on this, we believe we are well positioned to generate improved returns from our business and deliver shareholder value.”

Overall, concert attendance fell 6 percent to 15.6 million. The company sold more tickets than in the year-ago quarter, however: 34.9 million, compared with 32.6 million in 2010. The company held about 5,271 events during the quarter, up from 4,929 a year earlier.

Live Nation earned $51.7 million, or 27 cents per share, compared with $51.0 million, or 30 cents per share, in the year-ago quarter ended Sept. 30.

The company’s per-share earnings were calculated using a larger amount of shares in the most recent quarter.
Revenue fell nearly 3 percent to $1.79 billion, missing the average estimate for $1.90 billion from analysts polled by FactSet.

The company’s concert revenue, which makes up the bulk of its proceeds, fell 7 percent to $1.28 billion. Ticket revenue, which comes from the Ticketmaster subsidiary that it merged with last year, climbed 10 percent to $287 million. Revenue from managing artists, selling items online and selling sponsorships to events rose as well.

LNE took an unexpected hit of $14.6 million in legal expenses thanks to a Los Angeles judge’s rejection of a settlement agreement the company made relating to a ticket-fee class action suit filed well before Live Nation and Ticketmaster merged last year.

And LNE Chairman Irving Azoff said the company expects to take a $10 million hit from the NBA lockout in the fourth quarter, given the league canceled all games in November. Should the lockout end, Azoff said in a conference call that team owners have assured him any rescheduled games will be worked around dates booked in the first quarter of the 2012.