Live Nation Concert Revenue Ticks Up 34.2% as Live Events Return
Live Nation’s earnings for the first quarter of 2021 showed only the precursors to the comeback, as concert revenue ticked up 34.2% from the fourth quarter of 2020 compared to the 76% decline…
The return of concerts in the U.S. and abroad is sweet music to Live Nation’s ears after the pandemic-caused live music shutdown dropped revenues by 95% or more in the last three quarters of 2020. Live Nation’s earnings for the first quarter of 2021 showed only the precursors to the comeback, as concert revenue ticked up 34.2% from the fourth quarter of 2020 compared to the 76% decline compared to the first quarter of 2020 that was almost untouched by the pandemic.
Artists’ interest in touring after a year-long suspending gives Live Nation an “incredible supply” of concerts, said CEO Michael Rapino during Thursday’s earnings call. He expects the number of major touring artists on the road in 2022 to almost double from 25 in a typical year to 45. Although there have been whispers of a bottleneck as artists rush to a limited number of available dates, Rapino noted in the earnings release that over two-thirds of nights at amphitheaters, arenas and stadiums tend to go unused by sporting events or major concerts. “Right now, we have great supply, we don’t have any issues in terms of availability, but we’re also not looking to cram everything in three years into one year,” he said during the call. “We’re looking to stage a good ‘22 into ‘23.”
Rapino also optimistically noted that Bonnaroo, Electric Daisy and Rolling Loud Festivals sold out “in record time at full capacity.” In the U.K., where Live Nation has 11 festivals planned for the summer, Reading, Leeds and Parklife are also sold out. Rhythm and Vines, New Zealand’s largest festival, has sold out as well.
NFTs — non-fungible tokens — exploded since the previous earnings call on Feb. 5. and Live Nation gained some NFT experience through a digital goods sale by the rock band Kings of Leon that benefitted the Crew Nation nonprofit to help road crew members who lost work during the pandemic. Ticketmaster is already working with sports teams, festivals “and everyone else about how they can layer an NFT on a ticket,” said Rapino, and “take a boring PDF and turn it into souvenir magic.”
If there were a silver lining to 2020, the pandemic has given companies a rare opportunity to stop and rethink how they operate. Many companies, such as Spotify and Facebook, will allow workers to remain working away from an office. More hands-on businesses will change their operations, too. Live Nation expects to have positive adjusted operating income in the second half of the year, helped by a $750 million annual cost reduction relative to pre-pandemic levels. President Joe Berchtold explained that Live Nation “has shifted to a truly global organization” to is being rebuilt from the ground up. “When we were growing double digits every year through most of the last decade, it wasn’t worth the potential disruption,” he said.
Live Nation shares closed down 4.6% at $75.12 before earnings were released on Thursday. Shares edged up 0.5% in after-hours trading.
Breaking down Live Nation’s earnings:
Financial metrics – year-over-year (Q1 2021 vs. Q1 2020)
- Revenue: $290.6 million, down 79% from $1.37 billion
- Operating loss: $303.2 million, up 76% from $172.7 million
- Net loss: $322.7 million, up 53% from $210.9 million
Financial metrics – sequential (Q1 2021 vs. Q4 2020)
- Revenue: $290.6 million, up 22% from $237.4 million
- Operating loss: $303.2 million, down 22% from $388 million
- Net loss: $322.7 million, down 53% from $463.8 million
Sales metrics – year over year (Q1 2021 vs. Q1 2020)
- Concerts: $239.4 million, down 76% from $993.4 million
- Ticketing: $28.3 million, down 90% from $284.3 million
- Advertising and sponsorships: $22.6 million, down 75% from $90.3 million
Financial metrics – sequential (Q1 2021 vs. Q4 2020)
- Concerts: $239.4 million, up 34.2% from $178.4 million
- Ticketing: $28.3 million, up 160% from $10.9 million
- Advertising and sponsorships: $22.6 million, down 52% from $47.4 million
Additional financial information
- Liquidity on March 31, 2021, was $2.1 billion, a combination of $964 million in available debt capacity and $1.1 billion in free cash, up from $1.6 billion on Dec. 31, 2020 (through $500 million in new notes in January)
- Long-term debt (net) at March 31, 2021, was $5.29 billion, up 9% from $4.86 billion at Dec. 31, 2020, and up 94% from $2.72 billion on March 31, 2019
- Operational cash burn averaged $100 million per month, about the same as the fourth quarter.
Stock market
- Market capitalization on May 6, 2021: $16.43 billion
- 12-month price change: up 90.8% from $39.37
Major Events in 2021
- Plans to outfit 60 venues with live-streaming capabilities with Veeps, in which Live Nation acquired a majority stake in January.
- CFO Kathy Willard to retire on June 30, 2021
- Sherri Sosa hired as president of Venue Nation’s U.S. division in April
- Closed on $500 million of 3.75% notes due 2028