Business

Live Nation Posts $10.4B Record Revenues in 2017, Q4 Earnings Drop Following Songkick Settlement

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Courtesy of Live Nation

      

For the fourth quarter, the promoter saw losses balloon to $202 million -- more than five times the same quarter in 2016.

Live Nation had its best year on record with its three major divisions all posting gains over 2016. The promoter giant posted strong year-over-year revenue growth for the fourth quarter of 2017 in its earnings report on Tuesday (Feb. 27), but also saw its losses for the quarter grow significantly following its nine-figure legal settlement with Songkick in January.

Live Nation reported total revenues of $10.4 billion for 2017, up 25 percent over last year. Operating income was down 53 percent year over year to $91.4 million and its adjusted operating of $625 million was down about 2 percent over the same time frame. As of Dec. 31, the company had $1.8 billion in cash and $3.2 billion in total assets.

For the fourth quarter, Live Nation saw losses balloon to $202 million, more than five times the same quarter in 2016, which was blamed in part on the company's $110 million payout to former rival Songkick that concluded a protracted two-year legal battle over claims of unfair competition and computer hacking. The company's fourth-quarter adjusted operating income was down more than $105 million over the same period. 

The fourth profitability drop was a down note in an otherwise very positive year-end report for the 12-year old company, with 2017 marking its seventh consecutive year of growth. In it, the concert division grew 26 percent to $7.9 billion, sponsorships were up 18 percent to $445.1 million and ticketing revenue increased 17 percent to $2.1 billion. The company produced 30,000 shows in 40 countries to 86 million fans in 2017, according to the report, investing $5.6 billion in promoting concerts. 

Average ticket price ticked up 5 percent in 2017, bringing in an additional $250 million for the company. Meanwhile, average per-fan spending was also up to $24 per person, an increase of 9 percent year over year.

"Overall, we expect a very strong year across our amphitheaters, arenas and festivals, with some decline in stadium show count on a year-over-year basis," company CEO Michael Rapino wrote in a statement accompanying the year-end report. "Given our plans to further monetize our fan relationships, I expect this will translate into continued strong growth in concerts operating results in 2018."

For sponsorships, Live Nation now boasts 50 companies that spend over $1 million per year to reach fans, collectively spending $285 million to reach fans and make up more than half of overall spending. Sponsorship revenue at festivals grew 20 percent, driven by new deals with American Express, American Eagle, Samsung and Amazon Web Services.

"With over 70% of budgeted sponsorship revenue for the year already committed, we are confident that we will again deliver double-digit growth in operating results for 2018," Rapino explained.

The report estimates that Live Nation's Ticketmaster platform saw fee-bearing Gross Transaction Value (GTV), up 15 percent, transacting $30 billion in sales with 500 million tickets delivered to fans in 29 countries.

"Music has accounted for about 80% of Ticketmaster's GTV growth in recent years, making it imperative for us to extend our focus from venues to those artists who are filling the venues," Rapino continued. He estimates that 80 artists utilized Ticketmaster's Verified Fan platform, selling 3 million tickets. The available inventory on Ticketmaster's secondary site grew 25 percent and overall, the company estimates tickets sales are up 5 percent for the first two months of 2018.

Live Nation made a number of large-scale acquisitions in 2017 including the BottleRock Festival in Napa, Utah's United Concerts and Frank Productions of Madison, Wisconsin.

"In 2018, I expect us to further consolidate our global concerts position while enhancing our on-site hospitality business and capturing additional pricing opportunities," Rapino wrote. "We believe that our sponsorship business will continue driving double-digit growth as more brands look for that direct connection with music fans. And a more effective Ticketmaster marketplace, along with further alignment with artists, should continue to build on Ticketmaster's success."

The report also explained it was expecting stadium concerts to be slightly down over 2017 -- the monster Taylor Swift Reputation tour is currently being promoted by rival AEG Presents, although Ticketmaster is processing tickets.