The concert business had similar declines across the market. Madison Square Garden’s fourth-quarter revenue deficit was 94% following annual declines of 96% and 92% in the first and second quarters. Big Hit Entertainment, the South Korean company behind K-pop group BTS, posted 98% lower concert revenue in 2020.
With the help of financial maneuvers since March 2020, Live Nation has a financial cushion of $643 million of free cash, helped by $417 million of debt raised in early January, and $962 million of available debt capacity, which the company believes is enough to fund operations until concerts return this summer. To last this long, Live Nation had to drastically curtail spending throughout furloughs, postponing some capital expenditures and other belt-tightening. By lowering the amount of cash it uses for operations each month from $150 million pre-pandemic to $103 million in the fourth quarter, Live Nation president Joe Berchold said during Thursday’s earnings call, the company has reduced its total cash usage by $1.65 billion compared to pre-pandemic plans,
There’s good news on the horizon, though, with heightened anticipation that the recent availability of vaccines will speed a concert business recovery. Based on vaccine manufacturers’ capacity and governments’ ability to distribute, Live Nation officials believe that nearly all people in the U.S. will have access to vaccines by June -- not that cities and states will be fully open by then.
CEO Michael Rapino expects “more of a regional model” to U.S. touring this summer, he said during the earnings call on Thursday. “Every day we seem to have a new state or country talking about when they’ll open up.” Even though some states “might not be ready” for summer concerts, “We think we have enough artists,” he said. “And as long as these states open to the right capacities, we can start mid-summer into the Southern U.S. [and] go all the way to November.”
With the U.S. lagging behind other countries in vaccinations, Live Nation has gained more momentum in Europe. In the U.K., Live Nation put three festivals on sale after the government outlined its vaccination plans: Reading and Leeds Festivals sold 100,000 tickets in 72 hours while EDM-focused Creamfields sold out its 70,000 tickets in 48 hours, said Rapino. Music fans “have been excited to get back to the show as soon as we get the green lights in these markets to open up.”
Since May 2020, Live Nation has pointed to indications that fans are ready to attend concerts again: 95% of fans are likely to attend a show when possible, based on its own reporting, and 83% of fans have chosen to hold tickets to rescheduled shows rather than seek refunds. They’ll have their choice of concerts as Live Nation expects 45 major touring artists to be the road in 2022 compared to 25 in a typical year.
"We’re feeling more optimistic than we were a month ago,” said Rapino.