Live Nation Continues Cost Reductions, Furloughs 20% Of Full-Time Staff
Live Nation Entertainment has continued implementation of cost reductions as announced April 13, with furloughs of as many as 20% of its full-time staff coming after President and CEO Michael Rapino gave up his salary and execs took up to 50% pay cuts.
The furloughs run across all sectors of the company, which is decentralized and includes numerous regional offices, according to a person with knowledge of the cuts.
In addition to the salary reduction program, the company froze new hiring, reduced use of contractors, renegotiated rents and reduced or eliminated other discretionary spending, including travel and entertainment, repairs and maintenance, and marketing prior to making job cuts.
Live Nation has committed to reducing costs by some $600 million. In addition, it has amended its credit agreement, raised $120 million in additional revolving credit and, most recently, moved to raise some $1.2 billion by marketing a senior notes offering on May 13.
With the global concert industry at a virtual stop since mid-March, Live Nation follows other live-focused businesses that have recently furloughed or layed off staff including Endeavor, WME, Paradigm, UTA, APA, Feld Entertainment, Cirque du Soleil and others.
The COVID-19 pandemic has taken a heavy toll on the live industry in just two months. In addition to forcing layoffs and furloughs across the job spectrum, Pollstar has estimated that the industry stands to lose as much as $9 billion if concerts remain off the books for the remainder of the year.
Live Nation, as a publicly traded company and the world’s largest concert promoter, is taking an exceptionally large hit. However, it is believed to also have a substantial cushion to survive a lengthy shutdown. As of April 13, it had a total liquidity position of $3.8 billion.
But the ongoing crisis has caused its stock value to crash from a 52-week high of $76.60 to a low of $21.70 within the span of one month, from mid-February to mid-March. Shares have rebounded somewhat since the low on March 18, trading at $40.06 to close the day May 15.