Typically, Live Nation and Ticketmaster Entertainment want to compete on the same level. But, this is one club that neither company wants to continue playing in.
With Ticketmaster’s stock price (symbol: TKTM) slumped to below $6 per share less than three months from its all-time high of $27, Live Nation has also joined its rival in the sub-$6 per share club. The company’s stock (symbol: LYV) dropped more than 20 percent this week, just days after reporting strong, if not spectacular, earnings for the third quarter ended September 30. Live Nation’s stock has struggled on-and-off for more than a year, but it experienced the dramatic drop following sobering reports from financial analysts about the company’s future. See stock tickers for the two companies below.
Live Nation’s total revenues grew 9.4 percent for the quarter to $1.59 billion, and adjusted operating income grew 16.3 percent to $109.6 million, primarily on the strength of solid gains in ticket sales at North American amphitheaters and international festivals. Partially off-setting those gains was a $5.6 million loss in its overall Ticketing line item as the company prepares to aggressively launch its new ticketing operation in January, which it says is right on track.
In a prepared statement, Live Nation President and CEO Michael Rapino said he was pleased with the overall results. “We generated exceptional results during the third quarter in spite of the global economic downturn. We continued to execute better and grow our core business with virtually all key metrics used to evaluate our business showing improvements. We increased the number of concerts we produced, we grew our ticket sales and improved our revenues and margins. Despite challenging times, millions of fans have continued to attend live concerts to support their favorite artists. Looking ahead, our primary goal remains centered on maximizing our global concert pipe for our client – the artist – and expanding into direct ticketing/online distribution, completing the world’s only concert-to-fan direct platform for artists.”
Yet the quarter did little to placate nervous Wall Street analysts who believe Live Nation’s fortunes are particularly more modest. Two market analysts, James Boyle of CL King & Associates and Alan Gould of Natixis Bleichroeder downgraded the stock as they lamented that slumping consumer confidence could heavily affect spending on entertainment tickets. Boyle changed his rating from “Accumulate” to “Neutral,” while Gould dropped his rating from “Buy” to “Hold.”
“Whether it is higher unemployment, flagging consumer spending, plunging consumer confidence or declining advertising, Live Nation can claim it is more recession-resistant than most, but recent color on ticket sales and discounts to come to try to bolster 2009 sales by a peer suggest that management is too hopeful and we should be more conservative,” Boyle privately wrote to investors this week.
“We are also downgrading Live Nation to Neutral since the recession should be longer than previously expected. The company likes to say its average fan only buys a couple of tickets a year. Conventional wisdom likes to say people still went to the movies during the Depression. Yet, if the fan has less and less discretionary money or just wants to hunker down to survive the seeming storm, some tickets don’t get bought next year. Since Live Nation sells tickets in advance, the wall that the general economy has hit should it going forward, we feel,” he added.
Gould told the Associated Press that he believes Live Nation and other ticketing companies will feel the effects of the recession in the spring and summer of 2009. “Live Nation has not seen a decline yet, but we feel the current recession will be deeper and longer than past recessions,” he said.
A Live Nation spokesperson declined to comment directly about the downgrades. Prior to the analysts’ reports, the company said in a statement that it was optimistic about the rest of the year and 2009. “Live Nation continues to believe that it will be in a position to deliver strong adjusted operating income growth in 2009 and beyond as it continues to grow its core operations, realize the impact of its 2008 investments in venues and launch its ticketing operations.”
Rapino also reiterated his confidence about the future during a recent conference call with investors. “I’m not trying to deliver a message that we’re somehow the only company in the world not affected by the economic downturn. I can only state the facts on what we’ve sold to date,” he said. “Now as you know, 75 percent of our business happens in the summer, so we really don’t really start selling anything of magnitude again till March or April when we sell the summer season. So in October, with regard to AC/DC tickets, you can’t print them quickly enough. Coldplay sold out. Jonas Brothers sold out. So we have seen no ticket effect at all in October. And we hope that by the time we start selling tickets in the spring that this trend continues.”
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No, it just reads like it was written by a 4 year old. The argument is still there.
Man, you are an idiot.
I’m a ticket broker and my sales have tripled over the last year. People are paying $300-$400 just to get in the building for the SEC Championship game for a face of $70.
While there is definately some impact on ticket sales on the margins, in my experience, the high dollar spenders are still spending. And you can still make money in the secondary market for discount tickets, so long as the tickets you purchase are at a discount. People still want to go to games, shows, etc. even in a down economy. You just have to be smarter about how you do it.
But if you are still operating in the ticket business like it is still 1985, yeah, I can see hard times for you.
I have to agree with the first one. The secondary market is about to go through a time that is unlike any time in history for this business. With interest rate on CC Cards and no loans from banks the industry is going to take a major hit. We will lose half the brokers we have currently. Plus, people are not goingn to games anymore. Yes, the SEC Championship game is good and so will be the BCS game, but after the BCS, NFL playoffs, and SuperBowl the industry will go down to a level that brokers will not and cannot recover. NBA tickets which will lose so much money during the season, that the playoffs will not make up for the loses. In the past for Baseball, the hot tickets have been the Yankees and Boston. But the New York and Boston area is taking the Economic crisis the hardest. Celtic tickets are down big time. We have over 60 seasons (44 in the lower and the rest in uppers) and they are not selling at all. For example, we eat all of the tickets for the Hawks game on the 11th. We had the lowers discount to 20 each and the uppers at $5 each and no sales. Our salesman up there said no one has any money. New York Yankees tickets are going to take a hit this year too. New York is getting hit very, very, very, hard this year and maybe for another couple of years. YES, our sales and profit have tripled over the last year too, but that was last year this is this year. And the future don’t look great. Remember the teams are going up on ticket prices (except Redsox) this year. And the Prime games are going to broker pricing because Stubhub is giving data to MLB teams. Even though the guy cannot spell or type right, he is right, the secondary market is over with. To stay in the game, you are going to have to buy smarter or get the best seats in the house Free. But people still have to have money to go to the games. And over the next six months to a year, this country it going to see a crisis that rivals 1929.
The tickets industry is done. The secondary market will collapse by the end of the year. It was good while it lasted. We did great but now is the time to get out. This depression will get as bad or worest then 1939.
“This depression will get as bad or worest then 1939.”
1) The word is spelled “worse”
2) The correct word would be “than” not “then”
3) The depression started in 1929, not 1939
It’s hard to take what you have to say seriously with all the above errors.
I won’t mourn the loss of some brokers who get out of the business. It’s called competiton. The brokers who are smart and can figure out a way to survive and make money in a challenging environment will be rewarded when the economy turns around and the others will find other jobs doing something else.
If everybody could make money in a business, then everyone would be in that business. You’ve got to be a little bit better than average to make money doing whatever it is you do. I’m not saying it’s not challenging out there, but there are ways to make money if you know what you’re doing.
Wow the argument is invalid if the grammar is not correct!
If that’s the case then good.
But I just don’t buy the ship is sinking argument.
The ship my not be sinking but there is an iceberg on the radar that the ship is about to hit and there is no way to get by it.
Heres my opnion on all of this:
With ticket prices sky high and people with less money, industry will take a hit. Bigger brokers in bigger trouble. Mass buying just aint in the cards anymore. Of course if you can mass buy for SEC Championship or National title game, you will bank. but thats not possible and that aint the typical “bulk buying.” Bulk buying, I am talking about is what most brokers made their coin on, buying mediocre seats all around and get ins. Price breaks, buyin up those sections. But now the price breaks are getting more tricky with primary trying to squeeze out our profits. Will jump on about primary sellers in a second. If you have overhead; office, employees, even simply mortage- I think 2009 will be a hard time for you. Most brokerages cant renew 50% of inventory cuz they dont have the capitol. I think 35% of brokers will drop off in 2009. But there is a difference in brokers and weekend sellers. Many people will try to jump in this business as they are now more than ever, but they will be flushed out when they realize this vault is empty. That is a little extreme, but I think new buyers will lose their wallets quick being newbie buying is the worst thing to do right now. Less employment numbers is more people sittin around figurin out how to make a buck. its either primo or the right event situation. back to big wigs, I think its survival of the fittest. If you can survive two years from now and place your money in the right spots, you can do very well. But if you try to make money and need money in upcoming year, I think it will be chapter 11. kind of like every business out there. Too many sellers with not enough buyers. Money aint there. Money to make but not in the volume as before and they will become more evident in the next 3-4 months. I think people can get buy but alot will just go in more debt trying to stay alive in this business. I think primary markets will take a hit in the upcoming year. LiveNation decided to make this move at the wrong time. They are way too deep in debt at the wrong time. Signed some good deals like U2 but NickelBack and Jay Z, i think they overpayed and will feel it. Ticketmaster needs to sign more deals like the FrontLine deal to guarentee their music business. But ticketmaster is losing 15% of their business and have done little to fight it. Frontline is a step in the right direction, but not nearly enough. Expect some big announcements with less than 50 days till the two completely split for good. Livenation will need a secondary market to get a piece of. LiveNation might sign a deal with Stubhub that would be the smartest move as a business for them. Not for us of course due to hidden tickets and such, but for LiveNation that would be the next best move. But anyways, about all this, I am just specatating what I think and I could be 100% wrong. I dont see the value in this busniess as before being the Primary is taking over the Secondary. The clsoer the two get, the less money for us. I am not gloom and doom like others and think great depression is upon us, but I do think secondary selling is gonna be hurting in this recession. As primary’s tried to expand to include every willingly paying fan, when fans fall back and less people to fill the seats, wheres the money when primary cant sell out their seats? Primary pricing will fall a little and more of the 2-for-1 deals. So yea, to wrap this all up. Money to make but not enough at the magnitude in the Hannah days and last year even. Tickets seem like a sinking ship, I will not say go back to shore but stay in a lifeboat close by.
Another new option open to ticket brokers is FirstDIBZ.com’s (formerly TicketRESERVE) uDIBZ markets. For those not familiar with the platform, it is a pre-primary market that allows fans to reserve tickets based on their team making it to a post-season event. If their team goes, then they get a ticket at face, but if the team doesn’t make it, the money they paid to reserve the ticket goes to the company.
Anyway, FirstDIBZ recently opened markets that allow brokers to post their own inventory up for sale (before they only sold their own inventory of tickets), and I have to tell you I made a killing on the Cubs this year. I sold DIBZ (reservations) for a number of tickets I had access to for the World Series, and since they didn’t make it, I kept all that money. I know of other guys that had similar success with the Boston Red Sox.
They have these uDIBZ markets for MLB, NFL, NHL, NBA, and others. Just letting you know that this is just another way to make even more money without increasing overhead. If you can sell enough DIBZ for teams that don’t qualify, this is a very profitable venture.
It really is a lost cause to try to stay afloat for all the unestablished brokers barely trying to break in. Right now is a time to be as conservative as possible. People are so desperate for making money that some prices are being driven down to face value before it even goes on sale! And to be honest, I hope Don feels it the most. I hope its HIS BOTTOM LINE that feels it the most. He’s worse then TM and LN, b/c he shakes brokers hands, while sticking a knife in our back. He tries to alienate us from the customers, without taking any responsibilty. In the end, I take all the risk, with little to no rewards. The customer RARELY comes back b/c you can’t compete with their pricing, not to mention if do remember, it’s where they bought the tickets from originally. We eat the fees charging the customer THEIR surcharges. Not to mention that we have to pay them an overall fee for the order. Then when the chargeback comes guess who’s responsible? Sure as hell Don wants no part of that. You have a good thing going here Don. And now after alienating our customers from us he’s trying to destroy the broker community at OUR EXPENSE with that horrible idea Mercury. No more “networking” with other brokers, b/c he wants to middle man us now. Well Don,you are just a lucky walker, and you are definitely the biggest scumbag in this industry.
why do they allow FirstDibz to spam on here. FirstDibz is a shady company, should’ve seen their presentation in Vegas….
you had Burt Reynolds standing in the back of the room at the presentation….
Dont get me started with this “Network.” They are dinosaurs, how can they try to say they can compete with TicketsNow with them going to have Ticketmaster validatwe Etickets, Stubhub for just being a better company, or even LiveNation once they go secondary. TicketNetwork misleads people into people thinking they are buying from primary, shady business if you ask me.
As a private owner of Cubs season tickets, I also tested the FirsDIBZ marketplace for the 2008 postseason. Although I fretted over the whole notion of selling my “rights” to postseason games that might happen, as opposed to actual hard tickets for games that will happen, I ventured onto http://www.firstdibz.com. Sure enough it worked as advertised. I think this represents a real win-win in hard times. I was able to finally realize some $$’s from my unused post-season tickets and someone out there was able to secure ticket rights for what could have been the biggest game in Chicago’s history. Genius! I like to think that worrisome times push innovation. These dibs guys are innovative! If only Northwestern were in the BCS hunt -I could dibs my way to Miami!
FIRSTDIBZ STOP SPAMMING piece of **** scammers
FirstDibz is like blending your money. Last year they let people buy college ball and then gave 2for1 to screw over people who already purchased. TicketNews, why you let garbage like this spam?
…what happened in vegas?