Live Nation Reports ‘Best First Quarter Ever,’ Expects Record Year
The concert giant had $1.8 billion of revenue and adjusted operating income of $209 million in the first quarter of 2022.
After two years slowed by COVID-19 restrictions, Live Nation could be on its way to a record-setting year.
In what the concert promotion giant called its “best first quarter ever,” Live Nation had $1.8 billion of revenue and adjusted operating income of $209 million, the company announced in its earnings report Wednesday (May 5).
“Artists are back on the road and fan demand has never been stronger, a reflection that live events remain a clear priority for consumers as our social lives restart,” CEO Michael Rapino said in a statement.
Across the board, Live Nation’s Q1 2022 numbers easily topped the prior-year period and occasionally exceeded the first quarter of 2019, before the pandemic shut down the global concert business.
The concert division had revenue of $1.2 billion, a five-fold increase year over year and 8.4% lower than the first quarter of 2019.
Ticketing revenue was $480.4 million, 17 times greater than the prior-year period and 42.3% higher than the first quarter of 2019.
The sponsorship and advertising division posted revenue of $115.7 million, up from $22.6 million a year earlier and 54% higher than the same period in 2019.
“At this point our sponsorship sales are up double digits relative to this point in 2019,” said Rapino, “and we have sold 90% of our planned sponsorship for the year, positioning us for continued strong financial performance.”
Fans’ demand for live entertainment — and their willingness to pay higher prices — helped deliver a record quarter for Ticketmaster. Compared to the first quarter of 2019, transacted gross ticket value — ticket sales before Ticketmaster takes its cut — was up 39%. the second-best quarter in terms of GTV, excluding refunds, after the fourth quarter of 2021. Ticketmaster added 7 million net new tickets in the quarter from new contracts with venues and content creators.
“The overall double-digit increase” in ticket prices from 2019 “is driven by the high end [of ticket prices],” said president and CFO Joe Berchtold during Thursday’s earnings call. “Across our major stadiums, arenas, amphitheaters, we’ve probably about doubled the number of tickets that go into what we call platinum or market-based pricing.” That means “more of the tickets are getting market-priced or something closer to market price,” which “helped move $500 million to the artist this year” by pricing some primary tickets closer to actual demand, which reduces what re-sellers capture on the secondary market.
Three months ago, Rapino was confident that the company would “have a record year in 2022 that sets us up for growth over the next several years,” as he said in the Feb. 23 announcement of fourth quarter earnings. He echoed those thoughts on Thursday. “We think we’re in for multiple record years of growth,” he said during the earnings call.
Some forward-looking metrics from the first quarter suggest Live Nation is on target. Concert bookings were up 44% through late April compared to the same period in 2019. Deferred revenue — ticket revenue for future concerts — was $3.5 billion, almost double the first quarter of 2019. Live Nation has sold over 70 million tickets for shows in 2022, up 36% from the same period in 2019.
With COVID-19 infection rates low but rising, Live Nation believes attendance won’t be hurt by fans’ health concerns. “We continue to see that fans are showing up to the concerts they have tickets for, with attendance rates in the U.S. across all venue types at 2019 levels, and no-shows generally in the mid-single digits,” added Rapino.
Some costs are expected to increase in 2022, however — not surprising considering the U.S. consumer price index rose 8.5% in March. For amphitheaters, theaters and clubs, variable cost per fan (excluding talent) will increase by $2.00 to $2.50 relative to 2019. At festivals, variable costs per fan (excluding talent) will rise 7%. But in both cases, the cost increases are expected to be lower than gains in per-fan revenue. Additionally, the company is running lean compared to 2019 after trimming $200 million from annual costs during its COVID shutdown.
Looking forward, Live Nation said it has over 60 tours under discussion for 2023. The post-COVID backlog will be “flushed out” in 2022 and touring will be “back in business” in 2023, said Rapino.
Q1 financial metrics
- Revenue: $1.8 billion, +620% y/y
- Adjusted operating income: $209 million, +$360.7 million y/y
- Concerts revenue: $1.2 billion, +405% y/y
- Ticketing revenue: $480.4 million, +1,598% y/y
- Sponsorships & advertising revenue: $115.7 million, +154% y/y
Ticketing and attendance metrics
- Total estimated events: 6,607, +896% y/y
- Total estimated fans: 10.8 million, +1,321% y/y
- Fee-bearing tickets sold: 51.4 million, +681% y/y