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Live Nation Reports 98% Drop in Second-Quarter Revenue — But Predicts 2021, 2022 ‘Will Be Record Years’

"We won’t be doing DJ sets in the Hamptons any time soon," quipped Michael Rapino, emphasizing a need to ramp up safely before what he predicts will be a wide-scale return to shows next summer.

Live Nation Logo. (PRNewsFoto/Live Nation)
PR NEWSWIRE

A second-quarter earnings call with Live Nation execs Wednesday was full of hope, promise and even swagger… for 2021-22. Not surprisingly, though, the current numbers were grim, with revenue predictably down by a staggering 98% from year-to-year in the company’s quarterly earnings report.

Revenue was $74 million for the quarter, down from $3.2 billion in the same time frame in 2019.

Live Nation’s net loss for the second quarter was reported at $568 million, compared to net income of $172 million in the quarter last year.

Nonetheless, the company reported in its call Wednesday afternoon, it believes it has “sufficient liquidity to maintain critical operations until shows return,” which Live Nation anticipates will happen in a big way in summer 2021.

“We won’t be doing DJ sets in the Hamptons any time soon,” CEO-president Michael Rapino quipped, referred to a recent benefit show by the Chainsmokers in New York that drew negative attention from politicians and health officials. “We’re gonna play long and play safe.”

Among the stats cited, Live Nation says that 86% of fans have chosen to hold onto their tickets for rescheduled shows instead of asking for refunds, “indicating a strong desire to attend concerts in the future.” The number of fans throwing their tickets for festivals into the following year rather than opting for a refund is lower, at about two-thirds. But Live Nation pointed to strong sales for festivals in Europe that have already gone on sale for next summer, saying 19 million tickets have been sold for 2021 shows.

In the call, Rapino expressed faith in vaccines and treatment to make the world safe for shows a year from now.

As for earnings, Rapino said, “We didn’t want deferred revenue to have any false narrative to it. We are leading the industry,” he said, in offering refunds to fans who want them for postponed shows, suggesting that some competitors are determined to hold on to that ticket money at any cost to its image.

“I believe ’21, ’22 will be record years,” Rapino said. “Regardless of what quarter exactly we scale at, the business will be stronger than ever.”

Live Nation reps on the call said the company is “talking about a spring return to business outdoors in 40 countries” and that the business could see a return to concertgoing in “some markets before the spring,” but that the determination would be different for different territories. The U.S., they indicated, would take the longest in ramping back up, but the 50 amphitheaters that Live Nation manages would provide an advantage.

In the initial report, the company said, “Nearly 90% of fans globally are planning on attending concerts again,” although not everyone will see more than 10% of the population swearing off concerts altogether as encouragement for the future of the industry.

The company said it has targeted cost cuts of more than $800 million this year and reduced cash usage by $1.4 billion.

Asked about recent reports that Live Nation was asking agents and artists for much more favorable terms on festivals next year — which resulted in considerable backlash — Rapino said that was an unfortunate leak of what was only meant to be a starting point in negotiations.

“We wanted to make sure going into ’21 that if you were a headline artist that was going to play a certain festival this year and still wanted to next year… (that) we both shared some of the risk,” in terms of asking for “a refund reduction and some insurance.” Despite what he called “drama in the press,” Rapino said the company only “wanted to make sure we weren’t paying the same price in ’21 if we had a 30% reduction” in fans willing to buy tickets. But he added that he doesn’t foresee any such drop in fan interest or willingness at this point.

“The press got ahold of a kind of work in progress, which is too bad,” he said. “Negotiating deals with agents and managers, that’s the business model… different terms for different artists and different times. The process is always fluid. … The agents and the artists have all been very cooperative that if you had a show this year and wanted to reschedule next year, some compromise in the terms would have to be made.”

As for when fans might expect to see sales for shows in the U.S. begin again, Live Nation president Joe Berchtold said, “We do expect the on-sales to be a few toward the end of the year and the bulk of them as we get into the first quarter of next year.”