Live Nation Entertainment, Inc.
- Live Nation Entertainment is an American global entertainment company that was mainly established in 1996 but took its current form in 2010 following a merger with Ticketmaster in January of the same year.
- In 2022, it has connected over 670 million fans across 48 countries in all of its concerts.
- The company can be considered as a live event promoter, venue manager, and ticket seller to the events. It also has sponsorship and advertisement business through which it facilitates corporate clients' promotional programs.
- The company has reported a total revenue of $3,127.39 million during the first quarter of 2023, and $1,802.81 million during the same quarter a year earlier. Net loss during the periods are $(3.17) million and $(50.18) million, respectively.
- Live Nation Entertainment reported total revenue of $16,681.25 million during 2022 and $6,268.45 million a year earlier. Net income attributable to common stockholders of Live Nation is $295.99 million in 2022 and net loss of $650.90 a year earlier. Diluted net income (loss) per share is $0.66 and $(3.09) for the years, respectively.
Brief Company Overview
Live Nation Entertainment (NYSE:LYV) is an American global entertainment company that was founded in 2010 following the merger of Live Nation and Ticketmaster. The company is one of the world’s biggest live entertainment companies. The company was originally established in 1996 as SFX Entertainment by Robert F. X. Sillerman. The company arranges live music concerts around the world and also sales tickets to these concerts. In 2022, it has connected over 670 million fans across 48 countries in all of its concerts. In music concerts, the company has connected over 121 million fans to more than 43,600 events for over 7,800 artists in 2022. Live Nation owns, operates, has exclusive booking rights for or has a significant equity interest in 338 venues globally. Some of the venues are House of Blues®, The Fillmore® in San Francisco, Brooklyn Bowl®, the Hollywood Palladium, the Ziggo Dome in Amsterdam, 3 Arena in Ireland, Royal Arena in Copenhagen and Spark Arena in New Zealand. As of December 31, 2022, globally the company had over 90 managers providing services to more than 410 artists.
The company is headquartered in California, United States. Michael Rapino is the current CEO and President of Live Nation serving since 2010. The company has three reportable business segments - Concerts, Ticketing, and Sponsorship & Advertising. As of December 31, 2022, the company had approximately 12,800 full-time employees.
As of May, 2023, 52-week price range of the company has been $99.66 to $64.25. Trailing P/E of the company is 109.66 times, price to sales ratio (ttm) is 0.97 times, diluted earnings per share (EPS) of the company during 2022 is $0.64 and $(3.09) during 2021, basic and diluted total number of shares outstanding as on March 31, 2023 is 228,162,831 shares.
- During 2021, the company completed the acquisition of an aggregate 51% interest in OCESA. This was accounted for as a business combination under the acquisition method of accounting.
Recent Financing Activities
- In February 2023, Live Nation Entertainment amended its senior secured credit facility. The amendments includes replacement of benchmark reference rate from Eurodollar Rate to SOFR, deletion of the provisions regarding Canadian bankers' acceptances, and the addition of the Company’s ability to draw letters of credit in Canadian Dollars.
- In January 2023, Live Nation Entertainment issued $1.0 billion principal amount of 3.125% convertible senior notes due 2029. Approximately $485.8 million of the net proceeds is used to repurchase $440.0 million aggregate principal amount of the 2.5% convertible senior notes due 2023; the company entered into capped call transactions at a cost of $75.5 million, paid debt issuance costs of $15.0 million and any remaining proceeds are available for general corporate purposes.
- In December 2022, we entered into a $120.4 million Euro denominated note due in 2024 with a floating interest rate of three month Euribor plus 3.0% per annum related to an asset acquisition in Europe.
- During 2022, the company completed various acquisitions for total consideration, net of cash acquired, of $315.0 million.
Financial Performance Highlights
In the first quarter of 2023, Live Nation Entertainment has started the year with records in its revenue growth, although reporting an net loss of $3.17 million. Overall revenue of the company has grown 73% this quarter compared to the same quarter a year earlier. The stellar increase is due largely to more shows and fans coming back to venues to enjoy their favorite artists. Concerts segment revenue for the quarter increased by $1.1 billion, or 89%, from $1.2 billion in the first quarter of 2022 to $2.3 billion in the first quarter of 2023. The number of events for the first quarter of 2023 was approximately 9,600 compared to approximately 6,700 in the first quarter of 2022, an increase of 2,900 events or 43%. The number of fans for the quarter was 19.5 million compared to approximately 10.9 million last year, a growth of 8.6 million fans or 79%. The growth was largely in the international markets – in particular in Asia Pacific, mainland Europe and Latin America. Some of the larger acts touring in the first quarter included the Red Hot Chili Peppers, Harry Styles, BLACKPINK and RBD. Concerts operating loss for the quarter improved by $65 million, from a loss of $150 million in the first quarter of 2022 to $84 million in the first quarter of 2023. Concerts operating loss for the quarter improved by $65 million, from a loss of $150 million in the first quarter of 2022 to $84 million in the first quarter of 2023.
Ticketing segment revenue for the quarter increased by $197 million, or 41%, from $480 million in the first quarter of 2022 to $678 million in the first quarter of 2023. Ticketing operating income for the quarter improved by $66 million, from $155 million in the first quarter of 2022 to $221 million in the first quarter of 2023. Sponsorship & Advertising segment revenue for the quarter increased by $54 million, or 47%, from $116 million in the first quarter of 2022 to $170 million in the first quarter of 2023. Operating income for the quarter increased by $18 million, from $59 million in the first quarter of 2022 to income of $77 million in the first quarter of 2023.
Overall revenue increased $1.3 billion during the three months ended March 31, 2023 as compared to the same period of the prior year driven by increased revenue in the
Concerts segment of $1.1 billion, Ticketing segment of $197.3 million and Sponsorship & Advertising of $54.4 million as further discussed within each segment’s operating
results. Operating income increased $115.7 million during the three months ended March 31, 2023 as compared to the same period of the prior year primarily driven by increased operating income in the Concerts segment of $65.2 million, Ticketing segment of $66.1 million and Sponsorship & Advertising segment of $18.1.
Cash provided by operating activities decreased $42.5 million for the three months ended March 31, 2023 as compared to the same period of the prior year. Cash used in investing activities decreased $55.2 million for the three months ended March 31, 2023 as compared to the prior year primarily due to cash acquired from acquisitions, net of cash paid of $96.4 million during the current year whereas the prior year was cash paid for acquisitions, net of cash acquired of $14.0 million. Cash provided by financing activities was $225.7 million for the three months ended March 31, 2023 as compared to cash used in financing activities of $75.0 million for the same period of the prior year.
Annual Performance Highlights
Live Nation Entertainment reported total revenue of $16,681.25 million during 2022 and $6,268.45 million a year earlier. Revenue increased $10.4 billion during the year ended December 31, 2022 as compared to the prior year driven by increased revenue in the Concerts segment of $8.8 billion, Ticketing segment of $1.1 billion and Sponsorship & Advertising segment of $556.2 million. Operating income of the company during 2022 is $732.12 million and operating loss of $417.86 million a year earlier. The year 2021 saw a loss due mainly for low revenue, whereas the cost level has remained high as the company has a high fixed-cost structure. Net income attributable to common stockholders of Live Nation is $295.99 million in 2022 and net loss of $650.90 a year earlier. Diluted net income (loss) per share is $0.66 and $(3.09) for the years, respectively.
The Concerts segment revenue grew by $8.8 billion, from $4.7 billion in 2021 to $13.5 billion in 2022. The growth is an outcome of the company holding more shows and more fans turning out to enjoy the live shows. The number of events for the year was approximately 43,600 compared to 17,400 in 2021. The number of fans for the year was approximately 121 million compared to 35 million last year. This was the highest annual fan count ever, powered by growth across the company's major divisions, the addition of the OCESA business in Mexico as well as the impact of rescheduled shows.
The Ticketing segment revenue grew by $1.1 billion, from $1.1 billion in 2021 to $2.2 billion in 2022. Ticketing AOI for the year increased by $407 million, from $421 million in 2021 to $828 million in 2022. Along with an increase in ticket sales, upward pricing momentum and revenue generated from non-service fee sources, while direct costs rose to support higher operations and enterprise growth.
The company has reported total current assets of $8,159.52 million in 2022 which was $6,684.09 million a year earlier. Total assets of the company is reported $16,460.84 million and $14,402.32 million during the years, respectively. Total current liabilities of the company is $8,303.31 million and $6,855.72 million for the years, respectively.
Live Nation Entertainment operates in several segments within live entertainment business. Live music events, music venue operations, the provision of management and other services to artists and athletes, ticketing services and sponsorship and advertising sales. The company's business includes concert promotion and/or production of music events or tours. Typically, to initiate live music events or tours, booking agents contract with artists to represent them for defined periods. Booking agents then work with promoters, who will contract with them or with artists directly, to arrange events. As a promoter, the company earns revenue primarily from the sale of tickets. Artists are paid by the company under one of several different formulas, which may include fixed guarantees and/or a percentage of ticket sales or event profits. In addition, promoters may also reimburse artists for certain costs of production, such as sound and lights. Under guaranteed payment formulas, promoters assume the risks of unprofitable events.
Business of Live Nation Entertainment can be categorized into three reportable segments - concerts, ticketing, and sponsorship & advertising.
Concerts segment principally involves the global promotion of live music events in the owned or operated venues of the company and in rented third-party venues, the operation and management of music venues, the production of music festivals across the world, the creation of associated content and the provision of management and other services to artists. This segment accounted for about 80.9% of the total revenue in 2022. The company primarily generates revenue from ticket sales. The scale of revenue depends on primarily ticket volume and ticket prices. The company functions as a promoter to the event, as a venue operator, and a festival promoter of the event.
The Ticketing segment is primarily an agency business that sells tickets for events on behalf of its clients and retains a portion of the service charge as its fee. Live Nation Entertainment sales tickets for both their own events and for their third-party clients. The company offers ticketing services across multiple live event categories such as arenas, stadiums, amphitheaters, music clubs, concert promoters, professional sports franchises and leagues, college sports teams, performing arts venues, museums and theater. Tickets are sold through mobile apps, websites and ticket outlets. During 2022, the company sold 56%, 42% and 2% of primary tickets through these channels, respectively. Through all of the ticketing services, the company sold approximately 281 million tickets in 2022 on which it was paid fees for the services. In addition, approximately 270 million tickets were sold using the Ticketmaster systems, including through season seat packages, venue clients’ box offices, and other channels through which the company did not receive a fee.
Sponsorship & Advertising
This segment of Live Nation Entertainment creates and maintains relationships with sponsors through a combination of strategic, international, national and local opportunities that allow businesses to reach customers through our concert, festival, venue and ticketing assets, including advertising on our websites. Live Nation works with the corporate clients to help create marketing programs that support their business goals and connect their brands directly with fans and artists. The company also develops, books, and produces custom events or programs for the clients’ specific brands, which are typically presented exclusively to the clients’ consumers. Including intersegment revenue, the Sponsorship & Advertising business generated $968.1 million, or 5.8%, of the total revenue during 2022.
Other Business Information
Live Nation Entertainment has seasonality in its business. The company experiences high sales between May to October of a year. The venues types of the company include stadiums, amphitheaters, arenas, theaters, clubs, restaurants & music halls, festival sites, and other venues like exhibition and convention halls. The main competitors of the company include Anschutz Entertainment Group, or AEG, Another Planet Entertainment, CTS Eventim, Jam Productions, Ltd., I.M.P., Outback Presents and TEG Dainty, ASM Global, Madison Square Garden Entertainment Corp., The Nederlander Organization and Bowery Presents, in addition to numerous smaller regional companies and various casinos and venues in North America, Europe, Asia and Australia. The ticketing business of the company competes with fan clubs websites and the artist websites.
Live Nation Entertainment was originally found in America by Robert F. X. Sillerman in 1996 as SFX Entertainment. In 2000, the company was sold to Clear Channel Communications for $4.4 billion and operated as Clear Channel Entertainment until 2005. On August 2, 2005, the company was incorporated in Delaware as Live Nation. Clear Channel Communication, Inc. spun off Live Nation and contributed and transferred all of its entertainment assets and liabilities to it. Live Nation completed this separation on December 21, 2005 and became a publicly traded company on the New York Stock Exchange trading under the symbol “LYV.”
On January 25, 2010, Live Nation merged with Ticketmast Entertainment LLC and the latter became a wholly-owned subsidiary of Live Nation. Effective with the merger, Live Nation, Inc. changed its name to Live Nation Entertainment, Inc.
In 2011, Live Nation Entertainment acquired the remaining 25% of Front Line Management Group Inc., an artist management firm that was majority owned by Ticketmaster. The company acquired Big Champagne in 2011; came up with a joint venture with Insomnia Events. Live Nation has acquired a stake in a number of festivals and festival management companies including Voodoo Music & Arts Experience and Bonnaroo Music and Arts Festival.
In late 2019, Live Nation announced "Lawn Pass", a one-time fee program for concertgoers to attend all 2020 events in the lawn section at 29 outdoor amphitheaters in the United States. In 2021, Live Nation acquired a majority stake in livestreaming entertainment company Veeps, whose founding team includes Benji and Joel Madden of Good Charlotte.
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