Live Nation Reports $184.8M Loss In First Coronavirus-Affected Quarter

Live Nation Entertainment Inc. (LYV) on Thursday reported a loss of $184.8 million for the first quarter of 2020 in the company’s first earnings report since the coronavirus pandemic began.

“At the beginning of the year, we were on track for tremendous growth across all our businesses with both fan demand and artist touring increasing on a global basis,” President and CEO Michael Rapino said in a statement accompanying the earnings release. “However, in mid-March we came to a halt and we have held no concerts in almost two months. Despite these challenging times, we continue to have full confidence in the long-term supply and demand dynamics of the live concerts industry, Live Nation’s leadership position and our business model’s ability to successfully deliver profitable growth and shareholder value.”

The Beverly Hills-based company said it had a loss of 94 cents per share, which did not meet Wall Street expectations of a loss 68 cents per share.

The ticket seller and concert promoter posted revenue of $1.37 billion in the period, also missing Street forecasts. Three analysts surveyed by Zacks expected $1.46 billion.

The numbers include $993.4 million in concerts revenue for the first quarter of 2020, compared to $1.32 billion from last year’s quarter, down 21%. 

Concerts saw an operating income loss of $161.1 million in the quarter, against last year’s loss of $59.1 million, in typically the slowest concert season of the year.

“Our next priority is planning for the reopening of concerts when the time is right,” Rapino’s statement continues. “First and foremost, we will let the facts and science tell us when we should start putting on concerts again.  We are working with the government at the federal and state levels in the U.S. and across all countries, building plans that fit within reopening phases for each specific market. In the meantime, we have fortified our balance sheet to have the resources to ramp up quickly when the time is right.”

The balance sheet fortification includes top execs like Rapino and President Joe Berchtold forgoing their base salaries for the year, as well as a new revolving credit facility worth up to $150 million. 

Looking ahead, Rapino says the company remains bullish.

 “We know from fans that demand will be there when the shows return,” he said. “Globally, over 90% of fans are holding on to their tickets for rescheduled shows where refunds are available, which is the clearest demonstration of pent up demand that will enable us to quickly start concerts back up.

“Reinforcing this, in a global survey of ten thousand live music goers, over 90% indicate they will be back to concerts once possible to do so. Looking further out, given that 80% of shows have been rescheduled rather than canceled, and as we noted almost all fans are holding on to their tickets, we believe 2021 can return to show volume and fan attendance at levels consistent with what we’ve seen in recent years.”

While the earnings missed Wall Street expectations, the company’s share price remained steady, at $40 per share at the opening of trading Friday morning, a notable rebound from the mid-March drop of down to below $30.

LYV stock is down 44% on the year to date, against the broad-market S&P 500’s 10.8% decline. 

Live Nation shares have declined 45% since the beginning of the year. In the final minutes of trading on Thursday, shares hit $39.37, a decline of 38% in the last 12 months.

“Throughout all this, we remain motivated by the long-term potential of global live events,” Rapino states. “It is in our DNA to gather, socialize and celebrate and, as we provide reassurances on health and safety at the venues, we expect our business to build back. Live Nation is best positioned in the live ecosystem to play the long game, capture new opportunities and continue leading the industry into the future.”