Live Nation Entertainment Q4 2024 Earnings Call Transcript

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February 20, 2025

There are 13 speakers on the call.

Operator

Good afternoon. My name is John, and I

Speaker 1

will be your conference operator today. At this time, I would like to welcome everyone to Live Nation's Fourth Quarter and Full Year twenty twenty four Earnings Call. I would now like to turn the call over to Ms. Young. Thank you, Ms.

Speaker 1

Young. You may begin your conference.

Speaker 2

Good afternoon, and welcome to the Live Nation full year and fourth quarter twenty twenty four earnings conference call. Joining us today is our President and CEO, Michael Rapinoe and our President and CFO, Joe Berthold. We would like to remind you that this afternoon's call will contain certain forward looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company's anticipated financial performance, business prospects and new developments and similar matters. Please refer to Live Nation's SEC filings, including the risk factors and cautionary statements included in the company's most recent filings on Forms 10 K, 10 Q and eight K for a description of risks and uncertainties that could impact the actual results. Live Nation will also refer to some non GAAP measures on this call.

Speaker 2

In accordance with the SEC Regulation G, Live Nation has provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in our earnings release. The release reconciliation can be found under the Financial Information section on Live Nation's website. With that, we will now take your questions. Operator?

Operator

Thank you. We will now be conducting a question and answer session.

Speaker 3

You.

Operator

And the first question comes from the line of Steven Lacek with Goldman Sachs. Please proceed with your question.

Speaker 4

Hey, guys. Thanks for taking the questions. Maybe it started off from Michael on consumer demand. You guys have put a lot of stadium supply on the market over the last few months. I'm curious if you maybe could talk a little bit more about the demand trends you're seeing play out across the slate so far this year.

Speaker 4

Is there anything that you're seeing that makes you any more constructive or perhaps any more cautious on the demand front, since we last caught up in November before a lot of the supply went

Speaker 5

on sale? Thank you, Stephen. As you said, we've had a great start to the year. We've got a lot of inventory in the marketplace. We are seeing continued strong demand.

Speaker 5

We're seeing sell through rates at the stadium level higher than any previous year. If we look at one stat, the first week on sales were selling through over 75% and that's much higher than the last year. So we're seeing consumers buying up those stadium dates faster than ever up year over year or any comparable base. So no slowdown at all. Lots of inventory, but equally great demand selling most of these stadiums out or close to being sold out by the time we get to the show dates.

Speaker 4

That's great. And then maybe a follow-up for Joe. Given that inventory that Michael spoke to on the stadium side this year and the mix shift in that direction, I'm curious, Joe, if you could speak a little bit more about the puts and takes on Concert segment margin or maybe how we should think about AOI growth this year. How does the mix shift back towards stadiums in 2025 impact that? And I'm curious as well the visibility you feel like you have on the Venue Nation, amphitheater side of the equation this year and how that factors into the AOI growth for the segment?

Speaker 3

Yes. Thanks, Stephen. I think that this year is going to be more like a twenty three year as we look at how we're growing the business. With all this stadium volume leading the way, I'd expect to see some good revenue growth. I think Ticketmaster, first and foremost, will be a big beneficiary.

Speaker 3

I talked a lot about last year on the other side that it took 10 amp shows to deliver the kind of revenue for Ticketmaster's one stadium show. Now we have all those stadium shows. So I think you'll really see that benefiting on the Ticketmaster side. I think that we continue to have a sponsorship business that's performing extremely well. We note here 75% sold, up double digits.

Speaker 3

So you expect that to continue to deliver some ongoing strong growth. Then on the Concert side, again, all these shows, all these stadium shows, we're absolutely making money on attractive returns. We just don't get to count the beer money and the parking money as we do with our own venues. So I think it will ultimately come down to the pace of revenue growth versus the pace of AOI growth, which we don't know yet because we haven't gotten into the AMP season. So the latter part of your question on how much growth do we get on our per caps at our AMPs at our festivals, theaters and clubs over the course of the year, all of that will just help determine the exact balance of revenue growth versus AOI growth there.

Speaker 3

But we expect to see all of all the businesses performing well this year and as Michael said in aggregate continuing to deliver double digit AOI growth for the business.

Speaker 4

That's great. Thank you both.

Operator

And the next question comes from the line of Brandon Ross with LightShed Partners. Please proceed with your question.

Speaker 6

Hi, guys. Thanks for taking the questions. Something that stood out in the release to me was that Ticketmaster transacted ticket volume, you said was up only 3% and then the event related deferred at 11%. I thought that would have been much higher given the pipeline and frankly the answer that you gave to Steven's last question. Can you guys explain the disconnect for me?

Speaker 3

Sure. Let me take the two different pieces because I think they're slightly different in terms of what's going on. So Ticketmaster transacted volume, as you noted, is up 3%, while our concert tickets are up 10%. So if you look at the numbers, our concert tickets were up around $6,000,000 The TM transacted tickets, which is everything at the high end of all of our tickets to at the lower end family shows and other lower price things, up 3%, but off of roughly almost double the base. So what you have is at this point of the year, strong growth in the Live Nation concerts that Ticketmaster has been selling.

Speaker 3

You have a bit less activity in some of the other, whether they're promoters or some of the other activity in the Ticketmaster buildings. But we're still very early in the Ticketmaster scheme. It's about 100,000,000 tickets and we ended up the year last year at about three thirty million tickets. We expect to see growth off of that. So we're at a pretty early point for the Ticketmaster volume as opposed to somewhat further along on the Live Nation side.

Speaker 3

So I think it's a bit early to read too much into that number. Then in terms of the deferred, I I think the on sale timing this year was slightly different than what we saw last year. This year, because we had such a strong stadium lineup that really owned the fourth quarter in terms of the majority of the on sales. So that drove growth, but we didn't have as early of on sales on the arenas and the amphitheaters as we had last year. Last year because we didn't have the stadium volume in the end of twenty twenty three, we saw some earlier on sales on the arena and amphitheater side.

Speaker 3

So that's in effect why you got the double digit level of deferred growth at that point.

Speaker 6

Great. And then Michael, you talked a lot about the strong demand for stadium shows in answering Stephen's question. But just optically, I look at some of these shows and I see a lot of high priced tickets still on sale for high profile shows. Do you think ticket pricing is getting ahead of itself or is there some other explanation for that? And how should we expect apples to apples ticket prices to grow this year?

Speaker 6

So stadium versus stadium?

Speaker 5

Yes. I think you're seeing the artist in general every cycle is a little more educated on what's the best way to price Mike's ticket, how do I keep it accessible to my fans, but make sure scalpers don't run away with the front of the house. So we love seeing these stadiums sitting somewhere around 95% sold out right now. The instantly sold out at ten a. M.

Speaker 5

Means we've transferred a lot of wealth to the scalpers. If you see

Speaker 7

any of those

Speaker 5

tickets any tickets you're talking about are going to be the high end tickets sitting on the market. Those will flush out between now and show date. So we think these artists on their stadium pricing are priced at almost perfection where strong, strong demand. They also added more venues which we love. So they're helping consumers get to more shows at a good price, but also making sure that this priced closer to market which means you'll have a few high end tickets sit around the rim until we get closer to show date.

Speaker 5

So that's the perfect on sale and land the plane on show date model.

Speaker 6

So would it be silly to partially think about it as you're taking away from secondary ticketers or ticket platforms and that's moving more to primary now?

Speaker 5

Yes, for sure. I think the artist is over years, we've been saying this for years, every tour is looking at that P1 and making sure that if their fan is going to buy it, they would rather buy it from them direct on show day than two days later from a secondary site, ours included. So yes, artists are going to figure out how to keep pricing the P1s a little more aggressively, price the bottom back end of the house lower, so we got a great sell through. Those artists you're talking about, any inventory you see, we could sell that out in a minute if we drop the price, right? So finding that right combination where you're making sure demand and supply kind of march along on the way to the show date versus the ten a.

Speaker 5

M. Fire sale.

Speaker 6

Thanks, Michael.

Operator

And the next question comes from the line of Cameron Mansen Peroni with Morgan Stanley. Please proceed with your question.

Speaker 8

Thank

Speaker 7

you. First, I just want to say thoughts, glad to you guys and everyone in the LA office after everything that's happened this year. Pretty tough. Hope everyone's hanging in as well as can be expected. But Michael, one high level question for you.

Speaker 7

As we frame the opportunity you've laid out for sustained double digit AOI growth over the next few years, I'd just love to hear your thoughts on whether you expect the drivers of that performance to evolve over that timeframe or whether it's really just down to executing against a similar playbook as what supported the growth that you delivered here in 2024? And then one for Joe, on the outlook for $900,000,000 CapEx in 2025, another big increase similar to what we saw in 2024. What would you say investors should take away from the decision to ramp that so healthily in terms of the ROI you're seeing from that spend so far? And any help with framing the timing from kind of investment outflow to the returns showing up on the P and L will be helpful? Thanks.

Speaker 5

I'll go back to your first question if I can remember it. But, yes, listen, we've been we love consistency over here. So if you've been following our stock and you've been to our Investor Days the last few years, we don't we haven't deviated really from what we think our thesis of why the industry is a great industry on a global basis. We think live has a real global unlock and will be a high single double digit kind of industry for the next decade as we saw our Coldplay show in India sell out largest single concert in history 125,000 people. We saw those dates sell out instantly.

Speaker 5

So we've been talking a lot about the globalization of consumer, supply demand of the globalization untapped markets to grow still. So our model is the same. We're 100 offices in about 40 countries, keep growing those offices, growing our market share in those underdeveloped markets. And we will continue to follow that global trend of more consumers wanting to go to shows from Pittsburgh to The Philippines. So we think the industry is growing.

Speaker 5

We tend to grow better than the industry and be able to capture the revenue from our consumers walking in the door.

Speaker 3

And Cameron, I think in some regards, your second question is the same as your first question, right, which is if our thesis is we're going to grow to 200,000,000 fans as the next step and the different levers we have and venue side is a key piece of it, then certainly our capital deployment is going to mirror the delivery of that AOI growth. So I think we should take from the fact that we're increasing our capital spend is we're continuing to see a lot of opportunities that have very attractive returns globally. Again heavily focused internationally on the arena level, globally focused on these large theaters, both types of venues that can not just deliver attractive returns, but also move some reasonable volume of fans, expand our shows, grow the market. So that's the biggest takeaway I take from that. In terms of the timing, these projects are all different in terms of how long they take from shovel and the dirt through growing it out.

Speaker 3

What we're trying to do and we gave you some pieces here is some understanding of when or what venue is opening to how many millions of fans to give you some guide for how we're seeing the impact roll in.

Speaker 7

Got it. Helpful. Thank you, both.

Operator

And the next question comes from the line of David Karnovsky with JPMorgan. Please proceed with your question.

Speaker 8

Hi. Thank you. So just wondering, music labels and DSPs have recently come to agreements that may allow for super premium tiers. And wondering if you thought of potentially about the role of live music within some of these offerings, maybe it was something like ticket access, is there inventory that could be made available and could this be a potential sponsor opportunity?

Speaker 5

Yes. Thanks, David. Yes. We currently our job is to use that inventory that we've acquired from the artist and maximize it to sponsorship currently. And we have a lot of presale programs in place with you've seen them all, Verizon and Citibank's etcetera.

Speaker 5

So our job is always to look at that show, work with the artist and figure out is there ways to maximize that inventory to business as well as consumers. As far as the latest round Spotify and Apple and Amazon, we've they've approached us all, we've talked to them all about ideas on if they wanted inventory. There's a cost to that and we would entertain and look at that option if it made sense for us in comparison to other options we have for that presale which is a no it's a very valuable asset. The artist themselves tend to do their own deals. We do deals for the artist, but ultimately the artist has control of it and that artist's job is to maximize the revenue from it.

Speaker 5

They're not giving that away to anyone for free. So whether we partnered with them and found sponsors or we paid for it, it's valuable and wouldn't surprise me of course the labels or the distributors if they're trying to add a $5 premium to a monthly subscription and they don't have enough of their own inventory in terms of music or free songs. It's always the easy go to let's give them presale access. The hard part about presale is just scaling it. Everybody wants to be on say presale and that's hard to scale.

Speaker 5

So we've been working with all three of them trying to find a model that may work for us and them and assuming they're talking to others also.

Speaker 8

And then maybe just separate, the DOJ antitrust nominee recently indicated some openness to settlements where effective remedies can be put into place. Just wondering kind of what room you see to advance discussions with the agency or relative to the prior administration? And then, I don't know, just separate to this, are there any updates you can give on just the trial in terms of timing or kind of notable dates to be aware of?

Speaker 3

Yes, this is Joe. The trial process continues to move apace as it has targeting early next year for a trial date. So question is, is over the course of this year, can is there a path towards a resolution with the DOJ that doesn't lead to the trial? We've said in the last administration, there was really no interest in any discussion on settlement. So we're hoping that this DOJ returns to a more traditional approach and is open because they don't own it in the same way to those discussions.

Speaker 3

But we haven't had any discussions yet. The person that you would discuss it with is not been approved yet, not been appointed. So until that happens, there's nothing we can do. And we'll see how that plays out in the coming months, but nothing really substantively new.

Operator

And the next question comes from the line of Peter Cepino with Wolfe Research. Please proceed with your question.

Speaker 9

Hi, everybody. A question on Venue Nation Capital. Wondering if the 2025 budget, which I think you detailed as being $200,000,000 or $300,000,000 greater than $2,024,000,000 dollars is showing any change in the mix of U. S. Versus international?

Speaker 9

And then a parallel question on the large arenas for the 15,000 to 20,000 seat segment. I'm wondering if those opportunities are coming any faster or slower than you imagined and whether your appetite to invest in that particular segment has shifted at all? Thank you.

Speaker 10

I think we will.

Speaker 5

I think we will. I think we will. I think we will. Sorry, I was just going to jump on the second. The large opportunities on an international basis are coming ongoing.

Speaker 5

So continues to see that ramp up. We tend to be the first, second phone call if you're a developer thinking about building or have land and want to use that land or have a venue you want to sell. So we see that pipeline growing and our appetite still remains very large to expand in that platform.

Speaker 3

And just on that same thread, Michael just answered the first question too, which is I think that in general you'll see a trend towards more of the capital being deployed internationally because of the attractiveness and volume of those arena opportunities.

Speaker 5

Thank you.

Operator

And the next question comes from the line of Peter Henderson with Bank of America. Please proceed with your question.

Speaker 8

Yes. Hi, everyone. So just wondering, I mean, there's been some concerns over the softness of U. S. Consumer, particularly on the low end recently.

Speaker 8

It doesn't sound like you guys are experiencing any of that. But coming back to sort of Brandon's question as well, are you seeing any trade down from more affluent cohorts? And what are you seeing sort of from the more value conscious consumer? And just related to that, I'm wondering, you recently announced that there will not be a long pass program in 'twenty five. And I'm wondering if you could give any color on sort of the size of that and why the decision was made to end that program and what other programs you're considering?

Speaker 5

Yes. I mean, overall, the demand we're seeing for the concert, and I assume the NFL has got the similar answer. We're seeing no pullback. It's still on a global basis. We're seeing strong demand.

Speaker 5

We're seeing it in small to big. So yes, Beyonce's are always going to have incredible demand. But if you look at my club business, we're going to do 30,000 club shows last in a year. Our club business is up 17% year over year. So that's kind of the simplest way to say bottom end on a Tuesday in Indianapolis my business is doing better.

Speaker 5

Consumers are coming to the club to see the young bands. So we're seeing our festivals which are on sale already they're selling at record levels. So I'm seeing no pullback in any festivals from EDM to our country festival. As we always say, someone will write about one that gets canceled or a dog here and there. But generally, overall, Macquarie, our festival business globally is stronger than ever.

Speaker 5

Our club and theater business is stronger than ever. And obviously our stadium business is on fire. So whether it's geographical, whether it's venue type or whether it's festival, we're still seeing strong, strong consumer across the board in terms of buying tickets for the twenty twenty five season. As far as the long pass, so very small program and we put some new leadership in charge of venues this year. We expanded Jordan, Zachary's role and put some new thinking around how do we sell the summer amphitheater.

Speaker 5

I think our belief was we were discounting too much too early with

Operator

some of

Speaker 5

the programs we had. So it was to pull back and relaunch which we always do our annual concert week is kind of our big if you want to call that our Amazon Prime Day. Our concert week in later in the summer or earlier in the spring, beginning of the summer that's kind of our big, big deal where we sell all of our volume that matters. So we're going to just consolidate around that bigger idea and we're going to eliminate some of the smaller programs that we're selling small, small volume of tickets overall. Thanks.

Operator

And the next question comes from the line of Jason Bazinet with Citibank. Please proceed with your question.

Speaker 11

I'm a big fan of the CapEx you're spending, so don't take this the wrong way. It's just a clarifying question. When I look historically at Venue Nation, you'd own, I don't know, less than 10% of the venues most were leased or operated or whatever. Is this CapEx really moving more overtly into outright ownership of these arenas? Is that what we're talking about?

Speaker 11

Or is it spending CapEx and then having the right to lease it at a lower rate or operate it?

Speaker 3

A chunk of it is absolutely owning it. Every situation is different, but we're following your advice and trying to own more, go upstream. So if we're in a situation where we can own it dirt on up, we do. Sometimes we can't own the dirt, we'll own the building. If we can't own the building, we'll do as much of the capital build out and minimize our lease.

Speaker 3

So, you don't always have pick exactly what you want, but we're absolutely pushing it further upstream, if you will.

Speaker 11

That's great. Thank you.

Operator

And the final question comes from the line of Ketan Meural with Evercore ISI. Please proceed with your question.

Speaker 12

Great. Thanks for taking the question. Another one on Venue Nation. You provided a lot of great color at the Investor Day on the midterm outlook. I know the impacts to the model gets a bit tricky because as Joe mentioned, timelines vary greatly depending on how the shovel to dirt to growing the Venue Out process looks like, but it's an area where we get a lot of questions on.

Speaker 12

So I was hoping you could help us think about what the AOI impacts of Venue Nation maybe was in 2024 and a little bit more specifics around how you see that evolving in 2025 just given the growing venue base there? Thank you.

Speaker 3

Yes, we haven't really tried to break it out for you guys as a segment. First of all, part of it or a good chunk of it obviously comes from the sponsorship side and we've talked that two thirds of sponsorship is venue driven. So you've got a component over there. Then you've got the operating component, which is heavily driven by your beer and by your parking and so on. So we haven't really tried to fully model it and break it out that way for you, unfortunately.

Speaker 3

We try to use what we present at Liberty is the overall guideposts over a mid term basis as you said to then try to back in and say how are these pieces potentially going to roll out, how do they maintain the sort of growth profile over the next several years? And am I comfortable they are going to be able to do it? But we are not really in a place that we are going to break out and give you the standalone Venue Nation business model.

Speaker 12

Worth a shot. Thanks, Joe.

Operator

And I'd like to pass the floor back over to Michael Rapinoe for any closing remarks.

Speaker 5

Thank you, everybody. Look forward to talking about Q1 in May.

Operator

Ladies and gentlemen, that does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.

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