After months of reports reviews and rumors predicting that the US would file an antitrust lawsuit towards Reside Nation and its subsidiary Ticketmaster, the Division of Justice lowered the increase in April.
The DoJ alleged that the corporate engaged in “monopolization and different illegal conduct that thwarts competitors in markets throughout the stay leisure business.”
The DoJ requested a federal courtroom in New York to order the break-up of the corporate to “restore competitors within the stay live performance business, present higher selections at decrease costs for followers, and open venue doorways for working musicians and different efficiency artists.”
Within the wake of the lawsuit, Reside Nation argued that the notion it’s a monopoly is “absurd,” given its low web revenue margins, which don’t look very similar to the revenue margins one would anticipate a monopoly to drag off.
Moreover, Reside Nation argued, the case is politically motivated, and has little authorized floor to face on: The DoJ had agreed to the merger again in 2010, with situations, and got here to one other settlement with Reside Nation in 2019 over the corporate’s alleged monopolistic practices. So why the change in method now?
Even earlier than the lawsuit was filed, Reside Nation lengthy argued that it doesn’t set the ticket costs out there: That energy belongs to the artists, sports activities groups and different performers on whose behalf Ticketmaster sells tickets.
Nonetheless, the lawsuit was extensively anticipated, and because it rolls on, Reside Nation’s management workforce says it isn’t affecting the corporate’s operations or its (formidable) plans for the longer term.
“When you’re… in my authorized division, you’re engaged on the DoJ [lawsuit]. When you’re operating any considered one of my divisions, it’s enterprise as typical,” CEO Michael Rapino mentioned on the corporate’s earnings name on Tuesday (July 30).
Rapino mentioned he’s targeted on Venue Nation, the corporate division that’s buying and constructing out stay occasion infrastructure all over the world, noting that Venue Nation has 15 new venues scheduled to roll out worldwide over the subsequent 12 months.
“We predict there’s nonetheless an awesome, nice white house on a worldwide venue foundation,” he mentioned. “And [in ticketing], I believe you noticed final week, we expanded ticketing in South Africa and have just a few extra of these on a global foundation. So plenty of alternatives nonetheless forward of us, and [it’s] enterprise as typical within the divisions.”
“When you’re… in my authorized division, you’re engaged on the DoJ [lawsuit]. When you’re operating any considered one of my divisions, it’s enterprise as typical.”
Michael Rapino, Reside Nation
Reside Nation reported a file $6.02 billion in income for Q2 2024, a rise of 7% YoY.
Income from live shows jumped 8% YoY, to $4.99 billion, whereas the ticketing phase (i.e. Ticketmaster) noticed revenues rise 3% YoY, to $730.7 million. Income from sponsorships and promoting additionally grew 3% YoY, to $312.2 million.
Some 39 million followers attended Reside Nation exhibits, up 5% YoY, whereas Ticketmaster offered some 78 million fee-bearing tickets, roughly according to the year-ago quarter.
Internet earnings attributable to shareholders in rose barely in Q2, to $298 million, or $1.03 per diluted share.
Listed here are 4 different issues we realized on Reside Nation’s newest earnings name.
1) Reside Nation doesn’t see any enhance in occasion cancellations
There’s been some speak of late about what appears to have been a spike in tour cancellations, spurred particularly by the high-profile cancellations of excursions by Jennifer Lopez and The Black Keys. (The Keys’ tour cancellation might have had one thing to do with the band parting methods with its managers, Irving Azoff and Steve Moir.)
The discuss cancellations was sufficient to immediate an article within the New York Occasions asking if huge music excursions could also be in hassle. However in Reside Nation’s view, that is all speak, and nothing out of the unusual is occurring.
Reside Nation is seeing cancellation charges which might be decrease than they have been final 12 months, President and CFO Joe Berchtold instructed analysts on the earnings name.
“I believe many of the reviews that we’ve seen have been efforts to take one or two knowledge factors out of a really giant variety of excursions and exhibits, and we’re simply not seeing something uncommon there,” Berchtold mentioned.
Traditionally, Reside Nation has seen 4% or 5% of exhibits canceled upfront, affecting about 1.5% of followers, and at the moment’s numbers are “completely according to historic traits,” Berchtold mentioned.
However that doesn’t imply stay stadium exhibits are breaking information this 12 months. Reside Nation had signaled on earlier earnings calls that 2024 would see one thing of a stoop within the largest venues, whilst smaller venues like amphitheaters decide up steam, and in its Q2 earnings, Reside Nation referred to “lowered stadium exercise.”
Nonetheless, that has a lot to do with the truth that final 12 months was completely epic for stadium live shows, with excursions from Taylor Swift, Bruce Springsteen, Beyonce, Drake and others breaking information. It might have been arduous, underneath any circumstances, to prime a 12 months like that.
On the earnings name, Rapino and Berchtold predicted that Reside Nation’s earnings would present a big pick-up in stadium gross sales in This autumn of this 12 months, as advance ticket gross sales decide up for 2025, a 12 months they are saying will see renewed power on the stadium aspect of the enterprise.
2) Weak spot within the worldwide phase is about Reside Nation’s dependence on stadiums outdoors North America (and the Paris Olympics are partly responsible)
If there was one space of weak spot in Reside Nation’s Q2 numbers, it was within the worldwide live shows phase, which recorded a 15.6% YoY drop in followers, to an estimated 15.7 million, from 18.6 million the 12 months earlier than.
By comparability, the North American phase noticed a 25.5% enhance in followers, to 23.2 million from 18.5 million.
However that doesn’t imply stay occasions are slumping outdoors North America – fairly, it has to do with the truth that Reside Nation’s worldwide enlargement has been targeted on stadiums – the precise a part of the market that has seen weak spot this 12 months.
“I believe it truly is venue sort pushed, it’s not a lot geographic pushed,” Berchtold mentioned on the earnings name.
“It’s very according to what we’ve been saying for the previous 12 months. This was not going to be a giant stadium 12 months. You’re seeing that play out when it comes to decrease stadium exhibits, decrease fan depend. That impacts our worldwide quantity.”
“This was not going to be a giant stadium 12 months. You’re seeing that play out when it comes to decrease stadium exhibits, decrease fan depend. That impacts our worldwide quantity.”
Joe Berchtold, Reside Nation
Nonetheless, a few of that stoop does appear to have been pushed by geography – particularly by Paris, which is presently internet hosting the Olympics. That occasion led to shutdowns of venues in June, the final month of Reside Nation’s second quarter.
“Most of France shut down for that month, and most of that affected plenty of the stadium enterprise for the summer season,” Rapino mentioned.
Nonetheless, even when the variety of followers outdoors North America is down, income from them isn’t. Reside Nation’s worldwide live shows division clocked a 13.5% YoY enhance in income, to $4.69 million in Q2 from $4.13 million a 12 months earlier.
3) There’s no post-post-Covid pullback in stay occasion demand
There’s a principle on the market – or at the very least an expectation – that the spike seen in stay occasion attendance over the previous few years or so was the results of pent-up demand that constructed through the Covid pandemic shutdowns.
And, the speculation goes, now that this post-Covid pent-up demand has been happy, we are able to anticipate a pullback within the post-post-Covid period.
Reside Nation’s management workforce rejects this concept, and says there’s no proof of a pullback – simply proof that development ranges have returned to extra regular ranges.
“We by no means predicted that the business was going to develop at 30% a 12 months going ahead,” Rapino mentioned.
“We all the time wished to restate that, no matter a number of the Covid pent-up demand, or a number of the exhibits that obtained moved round… the fundamentals [are] nonetheless sound.”
“We by no means predicted that the business was going to develop at 30% a 12 months going ahead.”
Michael Rapino, Reside Nation
Rapino mentioned he expects to see development at 9% or 10% within the years forward.
“We now have lengthy mentioned this can be a supply-driven enterprise,” Berchtold added. “The demand is there. However the actual fact we now have so much fewer stadiums this 12 months, we’re truly nonetheless rising our present depend. We’re nonetheless rising our fan depend.”
He pointed to the globalization of the music business – the growing recognition of genres reminiscent of Afrobeats, Latin music, Okay-pop, and even nation – as what’s driving the music business, extra so than any post-Covid bounce.
“What we’re seeing is an acceleration of the continued globalization on the demand aspect, the artists seeing that they’ll go in every single place on the planet,” he mentioned.
“We’ll have some shifts when it comes to venue varieties and precisely which markets have which stage of exercise, however there’s nothing that may counsel that we’re actually deviating from historic trajectories on the continuing development of the enterprise.”Music Enterprise Worldwide
