Live Nation Entertainment reported its third quarter and year-to-date 2020 earnings Nov 5 and while there’s not a lot of good news to share, given the entire industry has been virtually closed since mid-March, not all of it was grim.
The company reports it has reduced operational cash burn projected at $110 million per month on average for the last nine months, prior to any benefits generated by revenue from operations. Live Nation has total cash and equivalents of $2.6 billion, including $951 million of free cash. According to the report, The cash along with $963 million of available debt capacity gives LNE more than $1.9 billion in available liquidity. But the devil remains in the details. On the quarter, concerts (drive-ins and other outdoor, spaced events) earned $154.8 million while sponsorship and advertising brought in $47.9 million. Ticketing lost $19.8 million for a net revenue of $184 million. One year ago, concert revenue was $3.173 billion and total revenue was $3.774 billion. Operating income in Q3 saw concerts losing $281.6 million over last year’s $111.4 million in positive territory. Total operating loss in Q3 2020 is $504.4 million, compared to income of $260 million last year. In the 9 months ended September 30, Concerts lost $722.6 million and total operating loss is $1.265 billion, compared with $407 million in 2019 income.
“There have been no major changes in our business conditions or outlook over the past three months, and while we see signs of promise around the world as some live events return, most regions we operate in continue to have various restrictions on live events,” LNE President and CEO Michael Rapino said in a statement. “For now, we continue to maintain a strong cash management discipline, while planning for the ramp up to resume live shows as soon as possible.”
A continuing bright spot remains fan demand for live entertainment.
“We also continue to see strong fan demand across the board. Our sales and survey data tell us fan demand will be there when the time is right. Our refund rate on rescheduled shows remains consistently low, with 83% of fans globally keeping their tickets. Our recent global survey indicates that 95% of fans are planning to return to live music events when restrictions are lifted, the highest point of confidence since the start of the pandemic.”
Rapino also reports strong festival onsales in 2021, with EDC Las Vegas sold out in less than one day at a higher capacity than 2019. UK festivals Reading, Creamfields and Isle of Wight are all pacing ahead of last year’s sales as well, he adds.
The addition of Ticketmaster’s SmartEvent, including social distancing seat mapping tools and timed entry technology, and SafeTix digital ticketing technology are notable in preparing for reopening as soon as feasible, though “the exact timeline of this return will vary by region, and so we continue to focus on remaining flexible,” Rapino said.