There is no getting around the fact that as goes Live Nation, so goes the global live entertainment industry. As the world’s largest promoter, tour producer, venue operator, festival producer, and ticketing company (Ticketmaster), the success of Live Nation, the industry’s only public company (NYSE: LYV) led by CEO Michael Rapino, has mirrored the Golden Era the entire business of live has enjoyed over the past decade.
That success was certainly evident in 2019, with revenue up 7% to $11.5 billion, operating income up 19% to $325 million, AOI up 14% to $943 million, and event-related deferred revenue up 10% to $1.2 billion by year’s end. Concert attendance for Live Nation in 2019 reached a staggering 98 million, up 5%. And all indicators were that 2020 would continue the roll. By mid-February, before the bottom fell out, Live Nation had promoted 5,500 shows drawing nearly 8 million fans, a significant increase over the year before, and sold 38 million tickets for 2020 concerts, a 10% increase YOY. This was shaping up to be an exciting year, with 4,700 confirmed arena, stadium and amphitheater shows, up 30% from 2019.
Even with the loss of what was by all indicators another massive summer, LN can find some bright spots. The company says over 90% of fans opted to eschew refunds to events, and 80% of shows lost to the pandemic will be rescheduled. Though Live Nation implemented a $600 million cost reduction program (including furloughs) to combat losses, it also expanded its cash management program, eliminating or deferring $1 billion in cash requirements this year
In May, the company announced the offering of $1.2 billion in aggregate principal amount of 6.5% senior secured notes due 2027, an offer upsized from $800 million due to overwhelming investor demand, with no less than entrepreneur and Dallas Mavericks owner Mark Cuban publicly stating he was bullish on Live Nation stock. Rapino said the added liquidity would, “help bolster our already strong balance sheet, providing us with extra cushion to withstand any scenario well into 2021, as well as ample resources to capitalize on current innovations and ramp business up quickly when the time is right” and further stated his confidence in a “strong future ahead for concerts and live events.”
Just before this issue went to press, Live Nation, via Rapino’s Instagram account, announced a number of ambitious diversity and inclusivity measures to lead this and other industries on a critical issue. These quantifiable benchmarks include by 2025 having a 40% racially diverse and 50% gender diverse staff.
Against this backdrop of uncertainty balanced by vision, leadership and a belief in the core strength of live, Rapino, as ever one of the most impactful executives in the global live entertainment industry, spoke about the challenges faced and how Live Nation is dealing with them.
Pollstar: How challenging was it to unwind the world? Basically, the world of touring unplugged in a couple weeks, it’s mind-boggling to think about.
Michael Rapino: We shifted and rescheduled more shows in two months than we have in the past 10 years combined. It’s still staggering to think about. I have so much respect for our teams and partners across the industry who rallied together to respond.
The thing we’re really grateful for is we entered the crisis with a strong balance sheet, allowing us the flexibility to take prudent and decisive actions. Also, we have the flexibility to reschedule, which many industries aren’t able to do and that gives us optimism the ramp back up will be just as swift. Artists want to be on the road performing and fans want to be making those once-in-a-lifetime memories at concerts with friends. It’s not a matter of if these shows will happen, it’s a matter of when. And we’re ready and waiting to ramp up as soon as the time is right. As we’ve seen across the globe, it’s not a one-size-fits-all approach, and some markets open up before others. We’re confident in the full return of live and know when the time is right to reopen, we’ll be there.
Talk about the refund process, how it played out and where it stands now.
Live Nation committed to leading the industry by providing the most comprehensive refund options available, with options for full refunds for all cancelled and rescheduled shows. We imagined refund rates would be much higher, so we’ve been really pleased to see the vast majority of fans think it’s worth the wait to hold onto tickets and attend the show, even with all the other factors at play in their lives.
Ticketmaster is a platform, and in order to issue refunds, Ticketmaster must first get approval and funds from our clients. These organizers of concerts, festivals, games or events worked tirelessly, in a short time span, to react to the global pandemic. However, in a matter of weeks, most of the event organizers using Ticketmaster offered refunds giving the choice to our consumers, and we are proud Ticketmaster got most of the systems set-up to do this safely and efficiently.
Tell us about your relief efforts like Crew Nation and Music Forward, how that came about and why.
When people think about live shows, what immediately comes to mind is artists on stage, the fans in the audience, but they don’t always think about the crew behind the scenes working tirelessly to make shows possible. I wanted to make sure we did what we could to support those crew members, because our shows wouldn’t be possible without them.
Live Nation got the ball rolling on funding with an initial $5 million donation and matched the next $5 million in donations from artists, fans and employees – right now the fund has a total of $15 million and growing. We created Crew Nation merch, which brought in a good amount and we’ve seen overwhelming support from artists, some of whom even created their own merch and songs to donate the proceeds. We even had livestreamed festivals and events benefiting Crew Nation.
The Music Forward Foundation is facilitating the fund, and they’ve been amazing getting thousands of people vetted and sending cash grants out quickly.
It’s been incredible to see the industry come together and rally to protect those hardest hit by the shutdown. This is particularly important for crew in countries without a lot of government support for gig workers or the live music industry. As we head into that core summer concert season, there are a lot of crew still in need. We welcome any and all support, if you want to get involved please reach out.
A summer without live music is hard to imagine. Talk about efforts with Drive-In Concerts, streaming, anything else to fill that void.
It’s not the summer we anticipated, but we are doing everything we can to make the most of it, innovating new ways to connect artists and fans like never before. Nothing can replace that feeling and energy you get at a live show with your favorite artist and in the meantime we’re doing our best to bring that to fans in new formats.
The drive-in concerts are a unique way to keep people connected safely and responsibly and we’ve been doing those in various markets around the world. Other companies do this in different ways, but we’re able to deliver a premium experience with artists playing every show live on-site by reimagining our network of venues. You still get the full concert production and sound, and fans can enjoy the show from the comfort of their own tailgating zone. It’s a great way for artists and fans to get back out there and it’s an experience they’ll never forget.
Our virtual events, including festivals and livestreams, are also popular, drawing millions of fans from around the world. We’ve hosted virtual tours, which are a great discovery tool for artists, giving them the chance to play for a range of audiences in territories they might not have toured before.
We’re using this time to be proactive and these innovations are an unexpected but welcome addition to our business in 2020. We imagine some of the learnings will evolve into permanent enhancements to help improve our core business and add new revenue streams far into the future as live shows return in full force..