August 8, 2009 By Alfred Branch Jr.
Concert promotions giant Live Nation reported a 6 percent drop in revenues for the quarter ended June 30, 2009, compared to the same period in 2008, and the company’s operating income also fell significantly for the quarter.
The company, which continues to move ahead with its planned merger with Ticketmaster, generated revenues of $1.06 billion for the quarter, compared to $1.13 billion in 2008. Live Nation posted a drop in operating income for the quarter of nearly 60 percent to $11.5 million, down from $27.8 million in 2008, but that was before merger-related expenses of $14.9 million, which resulted in an overall operating loss of $3.4 million.
As part of the merger, Live Nation and Ticketmaster have had to provide information to officials from the U.S. Department of Justice as part of the antitrust investigation the government agency is conducting.
The company reportedly missed analyst projections for the quarter, in which revenues were expected to reach $1.16 billion.
Live Nation has aggressively marketed several promotions this year, particularly its “no fee” Wednesdays, where fans can purchase tickets with no service fees. The company has touted the initiative’s success, but Live Nation’s ticketing operation, which launched this year, continues to lose money. Revenues from ticketing reached $20.2 million for the quarter, but operating income from ticketing posted a negative $1.4 million.
Despite the promotion, concert attendance fell to 13.1 million for the quarter, compared to 13.5 million in 2008, which can partially be attributed to the overall weak economy. And, those fans who are attending Live Nation shows are spending less on average than a year ago, $78.16 compared to $81.82.
“We had never planned on exceeding our record results from 2008 in North American Music, but instead planned to grow our overall adjusted operating income through robust International growth,” Live Nation President and CEO Michael Rapino said in a statement. “Our North American strategy was centered on increasing profits per show through cost management and incremental ticket sales on reduced show counts in 2009 in an effort to reduce our capital risk profile. We believe that the combination of these trends point to a robust third quarter and support our positive outlook for 2009, continuing our trend of annual adjusted operating income growth in order to increase free cash and reduce long-term debt.”