LN Reports Improved Q3

Despite a concert year that is proving to be "one of the weakest in history," Live Nation reported improved quarterly financial results for the second straight period over those of 2006, with third quarter pro forma revenue and operating income up despite of reduced show counts and attendance levels.

In its November 8th earnings call, LN reported total company pro forma revenue for Q3 was $1.509 billion, compared to $1.502 billion ’06. Operating income jumped to $68.4 million over last year’s $33.1 million.

Adjusted OIBDAN from North American Music improved by $5.1 million to $65.2 million, with operating income improving to $51.7 million from $11.9 million in ’06, owing in part to the elimination of a write-down of certain venues taken in depreciation and amortization during Q3 ’06.

The increase was offset, however, by an admittedly weak concert schedule. On a conference call accompanying the report’s release, Live Nation CEO Michael Rapino referred to the 2007 concert season as "one of the weakest in history," citing a single major worldwide tour on the books, presumably The Police, driving global touring.

But the bright spot for Rapino is the performance of amphitheatres, which saw 30 percent growth in year to date adjusted OIBDAN, reversing a five-year trend of losses, according to LN.

Some of the increase has to be attributed to the divestment of some sheds, most notably the Starwood near Nashville, and the reduction in the number of shows drawing less than 7,500 by 22 percent.

Live Nation also announced November 8th that it entered into a definitive agreement with James Nederlander to sell the remainder of its interest in the "Broadway in Chicago" theatrical series for a gross of $60 million. The sale is in line with Rapino’s stated desire to get Live Nation out of the theatricals business and concentrate on live music.

To that end, Rapino reports the company is well on its way to meeting its three-year goals of fixing, building and expanding core music operations.

Rapino also credits the establishment of "7 rules for 2007" that local promoters – mostly former independents who sold their interest to SFX or Clear Channel Entertainment – were required to follow with respect to event bookings, for moving LN toward those goals.

Rapino convinced those former independents to follow those booking guidelines and get behind a common financial target for the year, with some voluntarily agreeing to convert their potential cash bonuses into the right to receive company stock instead.

Despite year to date concert attendance dropping by 10 percent, according to Rapino, the company still looks forward to improvement in the fourth quarter with more dates from The Police, and tours with Bruce Springsteen & The E Street Band, Van Halen, Chris Brown and Jennifer Lopez picking up some of the slack.