Live Nation Revenue Sinks 84% In 2020, But Vaccine And Pent-Up Fan Demand Raise Hopes

– Live Nation Logo 2017

Live Nation yesterday released its financial reports for the full year and final quarter of 2020, an annus horribilis by anyone’s standards, showing staggering drops in revenue, ticketing, and advertising & sponsorships but also, on the cusp of what’s hoped to be a roaring comeback, reasons for optimism.

With virtually no concerts since March, concert revenue sank 84% ($1.47 billion vs. $9.43 billion in 2019) year over year and 92% ($178.4 million vs. $2.27 billion in 2019) in the fourth quarter. Ticketing was down 88% on the year and a staggering 98% on Q4. Sponsorships & Advertising also took a beating, down 65% in 2020 and 68% in the final quarter.

Yet, despite those sobering numbers, the company’s stock price has rebounded from a low of $33.57 on March 30 — about two weeks after most concerts shut down because of the COVID pandemic — to a high of $90.49 on Feb. 22. By contrast, shares were trading at $60.77 one year ago, prior to the pandemic crash.

Investors appear optimistic for the future, and Live Nation President and CEO Michael Rapino is, too. 

The company reports $2 billion in available liquidity after a debt sale in early January, an effective burn rate for Q4 of $103 million per month, and expects the contribution margin in Q1 2021 to increase faster than costs.

In the past year, Live Nation cut $200 million in costs and added new revenue streams including concert livestreaming and other direct to consumer businesses while accelerating the rollout of digital ticketing globally.

On the market research front, the news is even better. According to the report, 83% of fans have kept tickets from postponed shows rather than seeking refunds, and 95% of fans say the are likely to attend a show once restrictions are lifted — and 64% say they plan to attend even more live music events than they did prior to the pandemic.

Of course, this all depends on a ramped-up vaccine rollout and restrictions being lifted significantly.

“For both the U.S. and U.K., projections indicate that everyone who wants a vaccine will be able to get one by May or June, and Europe and most other markets following a few months later,” Rapino said during the earnings call. “Given the mass social and economic toll the lockdown has put on the public, we believe there will be strong momentum to reopen society swiftly as soon as vaccines are readily available, and we believe outdoor activity will be the first to happen.

“So while the timing of return to live will continue to vary across global markets, every sign points to beginning safely in many countries sometime this summer and scaling further from there.