Live Nation Earnings Report: Coronavirus Cancellations Lead to Considerable Q1 Loss

Courtesy of Live Nation Entertainment

Michael Rapino

The sudden cancellation of concerts and events in the last few weeks of March meant a 21% decline in revenues for Live Nation and a $172 million loss for the quarter, nearly seven times what the company posted for the same period last year.

According to the company’s first quarter earnings report, released Thursday (May 7), over the first three months of the year Live Nation posted an earnings per share of .94 cents with revenues of $1.4 billion and a $20.1 million adjusted operating loss. Lost revenue impact for the quarter is $435 million.

Concert revenue for the quarter was $993.4 milion, down 25 percent from the same period last year, while ticketing revenue was $284.3 million, down 16 percent. The number of U.S. events in the first quarter fell from 5,675 in 2019 to 4,790 in 2020, while international events dropped from 5,957 in 2019 to 4,640 in 2020. Global attendance was down from 14.9 million fans in 2019 to 10.4 million fans in 2020, whole total estimate tickets sold slipped from 117.1 million to 91.5.

The world’s largest concert promoter is feeling the impact of the global shutdown brought on by the spread of COVID-19. After offering refunds on thousands of rescheduled concerts, the company reports that 90% of fans are holding on to their tickets and say 80% of affected shows have been rescheduled rather than canceled.

At the end of the quarter, Live Nation held $3.3 billion in cash and cash equivalents including $842 million in client ticket cash, $817 million in free cash and another $900 million in available credit for $1.7 billion in available liquidity. With a cash burn rate of $150 million per year, the company has enough cash to make it through the year with having to tap into any additional credit, company president Joe Berchtold said on Thursday’s earnings call.

In April the company announced a $600 million cost reduction target and forecast capital expenditures for the full year to be approximately $200 million, down from initial estimate of $370 million.

“We recognize that next quarter wont be business as usual,” Berchtold said on Thursday’s investors call, noting the company won’t forecast results until it has a clear picture of when events can go back on sale.

“We have not recorded an estimate for refunds that may occur in the future since we have never experienced a global shutdown of live events and are unable to estimate it,” company officials wrote in the Q1 report. “We expect that the majority of our shows postponed due to the pandemic will be rescheduled. Any ticket proceeds for shows expected to occur after March 31, 2021 are reflected in other long-term liabilities on our consolidated balance sheets.”