Why Live Nation Stock Is Shaking Off Its Ticketmaster Woes

Ticketmaster tickets
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Another week, another ticketing debacle for Ticketmaster.  

When concertgoers for chart-topper Bad Bunny were denied entry into a Mexico event due to confusion regarding fake tickets, it was the second incident in less than a month to put the spotlight on its parent company, Live Nation. Ticketmaster also drew incredible outrage from Taylor Swift fans when they were unable to purchase presale tickets to her upcoming U.S. tour.  

But despite the massive blowback Ticketmaster received from the public, lawmakers and regulators recently, investors seem to care very little, for now. 

The T-Swift ordeal sent Live Nation shares sinking 8% in a single day on Nov. 18 to its lowest level in nearly two years. But since then, the stock has been steadily rising and was up 11% as of market close Monday, compared with the S&P 500’s less-than-1% gain during the same time period. On the day the Bad Bunny incident was reported, Live Nation stock saw no impact and closed 2.5% higher. 

While Ticketmaster’s issues and subsequent public relations nightmares are certainly points of concern, investors have reason to stay bullish on the company, at least in the long term.

The live events business, and specifically concerts, has been going bonkers this year. In its latest quarter, Live Nation logged its best summer concert season in history and its highest gross transaction value on record.  

And looking forward, Live Nation expects even more strength in 2023 with double digit year-over-year growth even when excluding sales from rescheduled shows.

And the data supports Live Nation’s outlook. According to decision intelligence company Morning Consult’s weekly survey data, American consumer sentiment toward concertgoing has stayed at its highest levels since the start of the pandemic. Whether it's pent-up demand or just a renewed sense of favoring experiences over material goods, there are still some economic challenges looming. With a recession expected in 2023, it remains unclear how long the bullish sentiment toward concertgoing will remain elevated if a recession were to hit the U.S. and world. 

Then there are the regulatory headwinds facing Live Nation. Lawmakers have called for a congressional hearing, and the Department of Justice launched an antitrust investigation into the company. While the DOJ’s antitrust probe predated the Taylor Swift ticketing drama, the incident certainly cast a bigger spotlight on the argument that Live Nation has abused its power in the ticketing industry. It’s worth noting that the DOJ was the same regulatory entity to approve the $2.5 billion Live Nation-Ticketmaster merger in 2010, much to the disapproval of the music industry at the time.  

Concerns of Live Nation’s monopolistic practices are not new, and while they are certainly something to investigate, the outcome will likely be in favor of Live Nation and its investors. Furthermore, ripping apart the Live Nation business segments would likely have far larger consequences than many realize. 

An example is Live Nation’s Verified Ticket Program which is perhaps one of the biggest benefits for consumers looking to purchase in the secondary market. Issues with scamming and fake tickets in the resale market have been one of the imperfections of the live events industry. The program was launched in 2017, and while it’s certainly not a perfect process, it’s helped to alleviate some of the industry’s pain points. 

Much like the Facebook saga, the antitrust probes may not have the strong and decisive outcome that some lawmakers and users expect such as a breakup of the company, but the process of investigating and questioning Live Nation will certainly yield changes and better practices at the company down the line. In the long run, the scrutiny of the company will be a net positive for Live Nation investors and consumers alike.