Live Nation Revenue Up 6% in First Quarter

Live Nation posted good first-quarter gains in its concerts division and is betting electronic dance music will help it have a strong 2013. Total first-quarter revenue grew 6.4% to $923.7 million and adjusted operating income rose 9.8% in the quarter ended March 31. The company's net loss was $64.2 million, a slight improvement from the $66 million loss in the prior-year period.

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The gains were driven by increases of 14.4% in revenue and 47.6% in adjusted operating income in the concert division. (Adjusted operating income is operating income before acquisition expenses, depreciation and amortization, one-time gains or losses on asset sales and other items that don't reflect the performance of the company's operating segments. When considering depreciation and a loss on the sale of assets, the concert division had an operating loss of $39.8 million.) The sponsorships division's revenue grew $3.9 million to $40.1 million and its adjusted operating income grew $3.1 million to $23.8 million.  
The ticketing and Artist Nation divisions did not fare as well. Ticketing revenue was down 0.4% while its adjusted operating income fell 17.9%. The number of total tickets sold dropped 2.6% to 35.7 million from 36.7 million last year. Concert ticket sales, which accounted for 46.6% of ticket sales, fell 0.8%. Sports, the second-largest category with a 23.8% share of ticket sales, fell 3.3% to 8.5 million from 8.8 million. At Artist Nation, revenue fell 18.1% and the adjusted operating loss improved to $1 million.  

Timing of ticket sales was partly to blame for the decline in ticketing revenue, and the company believes ticket sales will be "flat to slightly up" in 2013. More than 1 million tickets purchases in the fourth quarter of 2012 rather than the first quarter of 2013. Ticket sales for 2013 events are up 5% when accounting for tickets sold in both years. 

Live Nation is adding greater emphasis to EDM, which CEO Michael Rapino called "a global phenomenon" during Tuesday's earnings call. Buoyed by last year's acquisitions of HARD Events and Cream Holdings Limited, first quarter attendance of EDM shows nearly tripled to 350,000 people. With the help of the recent acquisition of Insomniac Events, the producer of the Electric Daisy Carnival festival, Live Nation expects full-year EDM attendance to be more than double to 1.5 million people. More EDM acquisitions could be on the way. Chief operating officer Joe Berchtold said the company expects to dispose of non-strategic assets in order to invest the proceeds in EDM as well as festival businesses.

Rapino said this year's concert season is expected to be strong. "The consumer seems to be coming back very strongly both in America and in Europe," said Rapino, noting that most of the company's business in Europe comes from Northern countries. Those markets are doing "very well year-over-year" in part because the company is "executing better this year than last year" and is shutting down underperforming festivals, he said.
The company ended the first quarter with cash and cash equivalents of $1.25 billion, up from $1 billion a year earlier. Its long-term debt stood at $1.67 billion.