Live Nation Entertainment
POWER MOVE: Amid major company changes, signed on for five more years -- and oversaw $2 billion in revenue and net income of $58 million during third-quarter 2012.
THE RUNDOWN: Michael Rapino’s power quotient has been rising for both his strong survival instincts and his ability to improve numbers for Live Nation, the world’s largest events promoter, ticketing firm and management company. He outlasted yet another boardroom shakeup with the resignation of chairman Irving Azoff on New Year’s Eve, days after Rapino re-upped for five years. And the third quarter of 2012 delivered strong results, with nearly $2 billion in revenue and net income of $58 million, beating Wall Street’s estimates.
Rapino’s vision for the company is akin to a three-legged stool. Live Nation’s global footprint in 41 countries is one leg. Second, a maximized focus on sponsorships involves 800 companies delivering $150 million in profits. But it’s Live Nation’s relationships with consumers and artists that may provide the most sturdy support.
Of course, the stability of those legs hinges on butts in seats. And after a challenging year industry-wide in 2010, Live Nation’s sales for 2012 were up 15% through October, compared with the same span in 2011. Live Nation reports that by October 2012, it had already sold about 3 million advance tickets for shows in 2013, compared with about 900,000 such tickets by October 2011 for 2012 shows. When final numbers are calculated, Rapino is estimated to have increased revenue from 2010 to 2012 by 15%, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) by 25% and upped free cash flow 70%-75%.
No one writes more fat checks in the industry than Rapino -- Live Nation says it invested $2.5 billion in talent in 2012. But for every investment there must be a return, and finally there are signs that Live Nation is reaping what it has sown. The company produced Madonna’s tour last year, making Live Nation the promoter for Billboard’s top tour in six of the past 10 years. Between Live Nation events and its Ticketmaster division’s scope, about 400 million tickets are moved annually. Live Nation’s Artist Nation division has a roster of some 250 performers, with the acts playing into every Live Nation revenue stream. “We’re still coming out of a tough global economy,” Rapino says, “so continuing to obsess around how we price the product and reach consumers is the absolute challenge of 2013.”