Thursday, August 6, 2020

Live Nation Reports Brutal Second Quarter | Hypebot

Live Nation Reports Brutal Second Quarter

Live Nation President and CEO Michael Rapino did his best to sound optimistic Wednesday, even as the company released a brutal financial report for Q2 2020.

Rapino said that while the industry has virtually shut down for now, Live Nation anticipates that concerts will return to scale in time for the summer concert season of 2021.

He also expressed confidence that fans are ready to return to live events, noting that 86% of fans had opted to retain tickets for events that had been postponed instead of seeking refunds.

66% Of Fans Did Not Refund Festival Tickets

Additionally, according to Rapino, two-thirds of fans have opted to hold on to festival tickets for the 2021 event and added that sales for festivals in the UK next year are off to a strong start and have exceeded sales for 2019.

“Between the tickets held by fans for rescheduled shows and these festival onsales, we have already sold 19 million tickets to more than four thousand concerts and festivals scheduled for 2021, creating a strong baseload of demand that is pacing well ahead of this point last year. At the same time, surveys continue to show that concerts remain fans’ highest priority social event when it is safe to gather, with almost 90% of fans globally planning on attending concerts again,” Rapino said.

In addition to the return to live events, Mr. Rapino shared some statistics about the company’s innovation in alternative event formats, including virtual concerts.

“the potential for live streaming to become an additional long-term component of our concert business”

“In the second quarter, we had 67 million fans view over 18 thousand concerts and festivals globally. Among our highlights, this past weekend we streamed 150 performances for our Virtual Lollapalooza Festival. Given the tremendous popularity of these shows, we are seeing the potential for live streaming to become an additional long-term component of our concert business, allowing fans in other cities, or those who can’t attend, to enjoy the concert as well,” Rapino said.

Brutal Losses

While Rapino was optimistic in his remarks, the company’s financial filings released on Wednesday painted a grim picture of the company’s financial results for the second quarter.

Overall revenue for Live Nation in the second quarter fell by a heart-stopping 98%, plummeting from $3.157 billion in the quarter in 2019 to just $74.1 million.

Live Nation’s concert business bore the brunt, with revenue for the segment declining from $2.639.5 billion from Q2 2019 to just $141.8 million for this year’s Q2. Unsurprisingly, ticketing also tanked, dropping from $141.8 million in 2019 to a loss of $87 million for the quarter this year.

The flower of the promoter-giant’s sponsorship business wilted in the COVID-19 summer sun as well, dropping from $151.5 million in Q2 2019 to $18.4 million this year.

For operating income, Live Nation swung from $319.3 million in the black for last year’s Q2 to $431.9 million in the red for the quarter in 2020./

Despite the dire financial results, Live Nation still appears to be well-positioned to weather the storm.

According to the company’s filing, Live Nation has total cash and cash equivalents of $3.3 billion available, which includes $1.8 billion of free cash along with an additional $966 million of available debt capacity.

At the same time, the cost savings measured implemented earlier this year appear to be paying off and Live Nation reports that its operational cash burn rate has been reduced to $125 million per month and the estimated gross burn rate is $185 million per month.

“While this is a challenging time for everyone – the live events business in particular – there are a few things that I am confident about: we are well positioned to weather this crisis, and we will get through this; when it is safe to return, we will have an abundance of fans and artists ready to enjoy live music again; and Live Nation will do everything in its power to meet our responsibilities to artists, fans, our employees and everyone else affected by this shutdown by bringing back as much live music as fast as possible when it is responsible to do so,” Rapino said.

Bruce Houghton on 08/06/2020 in

Live & Touring




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