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Live Nations Fundamental Analysis October 2023

Live Nations Fundamental Analysis.


Live Nations Fundamental analysis: a closer look.

“Founded in 2005 and headquartered in Beverly Hills, California, Live Nation Entertainment, Inc. (LYV) is a leading live entertainment company. Operating through its Concerts, Ticketing, and Sponsorship and Advertising segments, Live Nation has a global fan base of over 580 million across 46 countries. The company holds ownership, management, or exclusive booking rights in 289 venues, including renowned spots like the House of Blues and iconic venues such as San Francisco’s Fillmore, Brooklyn Bowl, Hollywood Palladium, Ziggo Dome in Amsterdam, 3 Arena in Ireland, Copenhagen’s Royal Arena, and New Zealand’s Spark Arena.


Live Nation operates through the following segments:

  1. Concerts (80.9% of total revenue in 2022): This segment is responsible for promoting live music events in its own or managed venues and third-party rented locations. It handles music festivals, content creation, artist management, and various related services. Operating costs include artist fees, event production, marketing, advertising, and other expenses.
  2. Ticketing (13.4% of total revenue in 2022): Managing ticketing operations, this segment sells tickets for its events and third-party clients across diverse live event categories. It covers arenas, stadiums, professional sports, college sports, amphitheaters, music clubs, concert promotion, performing arts, museums, and theaters. Expenses include centralized costs and credit card fees.
  3. Sponsorship and Advertising (5.7% of total revenue in 2022): This segment specializes in selling international, national, and local sponsorships and advertising spaces. Operating costs consist of sponsorship program execution and related expenses.





Strong Revenue growth.

In the second quarter of 2023, Live Nation Entertainment reported solid revenue growth. The company’s revenues amounted to $5,630.7 million in the quarter, an increase compared to the $4,434.2 million reported in the previous year. The company benefited from pent-up demand for live events and strong ticket sales. Live Nation stated that with the world fully reopened, demand for concerts remains high. This has led to a robust performance by Ticketmaster and an increase in fan spending, improving the overall profitability of the company.

Acquisition of OCESA to Support Growth.

The company completed the acquisition of OCESA, a Mexican entertainment company in which broadcaster Televisa holds a 40% stake. OCESA has a strong presence in Latin America. Prior to the pandemic, the company promoted over 3,100 events for nearly 6 million fans in Mexico and Colombia. It has a solid business portfolio in ticketing, sponsorship, food and beverages, merchandise, and venue operation. The company owns 13 premium venues in Mexico. The company expects the acquisition to bring synergies, including increased efficiency in promotion, venues, and festivals, as well as ticketing and sponsorship opportunities.”

Demand and accumulated supply:

Strong demand continues to drive Live Nation Entertainment’s performance. For concerts, the company has stated that it has already sold over 117 million tickets since the beginning of the year, an increase of over 20% compared to the same period in 2022. In the second quarter of 2023, the company reported solid contributions from the Concerts segment, fueled by the growth in the number of fans in stadiums and arenas, increased spending on food and beverages, and upselling. During the quarter, Concerts segment revenues increased by 29% year over year, reaching $4.6 billion.

The company also reported strong attendance in international markets, particularly in Europe, the Asia Pacific, and Latin America. Additionally, it cited benefits from global tours by major artists, including Coldplay, Beyoncé, and Harry Styles. Operating income for Concerts in the second quarter was $78 million, compared to $38 million reported in the same quarter of the previous year.

High Growth Expectations.

The company is extremely optimistic about its growth opportunities for the remainder of 2023. For shows in 2023, it is experiencing even stronger ticket sales. For the rest of 2023, the company plans to add more venues to its management portfolio. In terms of ticketing, the company is likely to benefit from market pricing trends. Live Nation Entertainment believes that several of its artists, such as Dave Matthews, Luke Bryan, Maroon 5, Travis Scott, and Garth Brooks, among others, will undertake multi-year tours in the United States and Europe. This, in turn, will favor the company’s performance. For 2023, our model predicts a 17.5% year-over-year increase in concert revenues, totaling $15,849.4 million.”

Continuous growth of Ticketmaster

The COVID-19 pandemic has acted as a boon for Ticketmaster. The demand for digital tickets has increased as venues and artists seek contactless transactions due to the pandemic. Since the beginning of the year, Ticketmaster has added 14 million new net customers, mostly from international markets. Ticketmaster expects to benefit in the remainder of 2023 from increasing ticket sales for Live Nation concerts and additional sales from new customers. The company is benefiting from investments in technology.

Strong Sponsorships Driving Growth.

The company’s sponsorship continues to experience strong growth. In 2022, the company had 120 large-scale strategic sponsors globally across its activities, representing a 32% increase from 2019. In the first half of 2023, the company added partners including Google Pixel, PayPal, and Levi’s, Diageo and Chateau St. Michelle. It also renewed multi-year agreements with Salesforce and Gildan.

In the second quarter, Sponsorship and Advertising segment revenues amounted to $302.9 million, a 15% increase from the same quarter of the previous year. Given the strength of consumer demand (for future shows) and confirmed sponsorship activity (over 90%), momentum is likely to continue in the coming periods.

Sufficient Liquidity:

In the current situation, maintaining liquidity has become a daunting task for most companies. The company ended the second quarter of 2023 with cash and cash equivalents of $7,128.9 million, compared to $6,992 million as of March 31, 2023. Additionally, it reported having $579.7 million available under its Revolving Credit Facility. Long-term debt at the end of the second quarter of 2023 was $6,554.7 million, compared to $6,547.9 million in the previous quarter. The company has sufficient liquidity to support its operations for a certain period. The interest-to-earnings ratio at the end of the second quarter was 3.3x, compared to 2.8x reported in the previous quarter.”

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