An 11 percent growth in ticket sales by the company’s Ticketmaster division, for the quarter ended March 31, helped Live Nation Entertainment record a 17 percent increase in revenues for the period compared to last year’s first quarter (Q1) to $849.4 million, the company said Thursday, May 5.
Live Nation sold 34.6 million tickets during the quarter up from 31.2 million, during what is typically one of its heavier sales periods as major concert acts hold onsales for spring and summer tours, and several sports leagues are in full swing. Despite the boost in sales, the company still posted a net loss of $48.5 million for the quarter, though that loss was significantly less than the $122.2 million loss for the same period in 2010.
Live Nation Chairman Irving Azoff told investors during a conference call late Thursday that while “economic factors are still of some concern” to the company, he and Michael Rapino, Live Nation President and CEO, and the rest of the company are generally optimistic about the year. Part of that is due to 75 percent of the company’s key artists being on tour this year, compared to less than 50 percent of them last year.
“We believe that our business environment is starting to improve over last year and we’re encouraged with overall trends to date,” Rapino said in a statement. “Our healthy first quarter performance reflects improvement in ticket sales, solid growth in our Sponsorship and eCommerce segments and our focus on carefully managing our costs. It’s still early in the year, but fans are responding well to our ticket pricing initiatives.”
Rapino added that the company remains “focused” on “adding content and monetizing the event in order to grow our higher margin businesses.”
One example of added content was Charlie Sheen’s unexpected tour this spring, which Live Nation produced and Rapino said made the company money, though he did not offer specifics.
“We absolutely did [make money on the tour],” Rapino said during the conference call, chuckling. “We’re not the moral cops, but we delivered some AOI [adjusted operating income] to the company.”
Going forward, Azoff and Rapino said fans discretionary incomes will continue to play a role in how well the year ends up financially. Concerts, sports and family shows all posted ticket sales gains during the quarter, while theater and arts shows saw some declines.
“We could better predict what ticket sales would be if we could predict gas prices,” Azoff said.
That being said, the company is already anticipating selling about 1 million fewer amphitheater tickets this summer because it plans to reduce the number of shows in those venues, in an effort to cut out money losing concerts. But, Live Nation expects the shows it does book in its amphitheaters to be better attended, and it expects its arena shows, which represent a bigger piece of its financial pie, will also see an increase this year.
Rapino said that the potential lockouts in the NFL and NBA could affect the company’s AOI by as much as $15 million, but he hopes that any possible losses will not reach that much.
“Owners of those venues will be aggressive in filling those dark nights with concerts and other events, which will need ticketing,” he said.