Touring

Touring Stocks Drop as Coronavirus Declared a Pandemic

Concert crowd, touring
Aaron Foster/Getty Images

Live Nation shares fell 16.6%, Madison Square Garden Company dropped 9.5% and German promoter and ticketing company CTS Eventim stumbled 6.5%.

UPDATE: Live Nation shares fell as much as 24.3%, from $42.01 to $31.81, on Thursday (March 12), before improving to roughly 4% down by early afternoon. Shares of The Madison Square Garden Company 12.1% but recovered half the loss by midday Thursday. CTS Eventim, traded on the German exchange Xetra, closed down 8.6%

Concert promoters’ stock prices sank further on Wednesday (March 11) as the World Health Organization deemed the novel coronavirus outbreak to be a pandemic, the health equivalent of upgrading an economic recession to a depression. Live Nation shares closed the day (March 11) down 16.6%, nearly triple the Dow’s 5.9% decline, while Madison Square Garden Company fell 9.5% and German promoter and ticketing company CTS Eventim stumbled 6.5%.

The term bear market -- a 20% decline from recent highs -- also arrived Monday, lending more awe to the stock market’s shock. Live Nation shares have shed 41.2% this year and 43.4% since the sell-off began Feb. 24, while MSG and CTS Eventim have lost 25.2% and 29.2% of their market values, respectively.

Investors can see that early signs of potentially major disruption are being realized. Goldenvoice’s Coachella and Stagecoach festivals were postponed until October but fortunate to find a place on the calendar. A number of March events were less fortunate have been canceled outright, including South by Southwest in Austin, Ultra Music Festival and Winter Music Conference in Miami, and Big Ears Festival in Knoxville, Tennessee.

“The big question is the timing of cancellations and reservations,” says Brandon Ross, partner at Lightshed Partners. If the coronavirus is not reasonably contained by late spring or summer, the busiest part of the concert business will be pushed to fall and winter. “That’s difficult for the amphitheater business” that thrives in warmer months, Ross says. Live Nation president Joe Berchtold echoed this idea on CNN Wednesday afternoon, saying the promoter is looking at its slate of festivals and considering which can move to summer or fall “when things have settled down.”

Add sports to the list of casualties. Around the time Berchtold was calming investors’ nerves, the Golden State Warriors announced it will play two games in its home arena, the brand new Chase Center in San Francisco, without fans in attendance. Fortunately for the Warriors, teams have lucrative contacts with TV broadcasters and can air games in empty arenas. But “the game must go on” isn’t in promoters’ vocabulary. Right now, the concert business is filled with unanswerable questions. As CTS Eventim’s CEO Klaus-Peter Schulenberg said in a press release Wednesday, the coronavirus “will have negative impacts...that we are currently unable to quantify.”

Ironically, CNBC chose Black Sabbath’s “Paranoid” for intro music Wednesday, a questionable choice given the gravity of recent weeks. Businesses aren’t paranoid when canceling or postponing events -- far from it. But investors’ state of mind is another story.

Coronavirus