Surging Ticket Prices Fuel Another Record Quarter for Live Nation 

While controversy swirls about Live Nation Entertainment and Ticketmaster’s market power and whether or not new laws or even a full break-up by the Department of Justice are needed to address it, the company once again reported record-shattering earnings with its 2023 Q1 numbers this week. Revenue was up 73% compared to the first three months of 2022, with 90 million tickets sold already – and indications that the average ticket price surging is paying huge dividends for the California-based corporation.

“2023 is off to a tremendous start,” boasts the press release announcing the financial results. “For the first time in three years, all of our markets are fully open. The common theme we are seeing around the world is that live experiences are a high priority for fans.”

Live Nation and Ticketmaster boasted the sale of 7.3 million tickets in the new year, totaling a staggering $7.7 billion in gross transaction value – those numbers being 40% and 60% ahead of the same period in 2023. In simple math, this means that the average ticket price is far higher, as systems like “Platinum” tickets and “dynamic” ticket pricing algorithms continue to be embraced by many artists despite major fan blowback, with notable exceptions like The Cure.

Total revenue ($3.1 billion), operating income ($143 million) and AOI ($320 million) were up massively compared to 2022 numbers, reflecting the full reopening of live entertainment and continuing a string of record-setting quarterly earnings reports.

CEO Michael Rapino, who it was recently revealed saw his compensation rise to a staggering $139 million in 2022, says he expects those trends to continue throughout 2023.

“Our results for the first quarter demonstrate the success of our strategy and sets us up for strong growth in 2023,” he says. “We expect to host a record number of fans this year, even against a 2022 comparison which benefited from rescheduled shows attended by 20 million fans. Ticketmaster should also deliver record activity, with around 600 million tickets managed globally this year. Our sponsorship business, even after incredible growth last year, looks to be on track for double-digit AOI growth again this year.”

“As we then look to 2024 and beyond, we have all the necessary levers to build our flywheel globally and continue to compound AOI by double-digits for the foreseeable future.”

The full earnings report is available here, with the financial highlights pasted below:

• As of March 31, 2023, total cash and cash equivalents were $7.0 billion, which includes $1.4 billion in ticketing client cash and $1.9 billion in free cash. This free cash, along with $579.7 million of available debt capacity, gives the company $2.4 billion of available liquidity. The company believes this level of liquidity will provide its needs to fund operations and future investment opportunities.
• The company expects capital expenditures to be approximately $450 million in 2023 as we continue catching up on projects delayed due to supply chain constraints and further expand our global platform.

Forward-Looking Statements, Non-GAAP Financial Measures and Reconciliations:

Certain statements in this press release, including the Supplemental Information that follows, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to statements the regarding fan demand; the company’s expectation that its new venues will host nearly 3 million fans in 2023 at approximately 1,000 shows; the company’s positioning for strong growth and a record 2023; the company’s expectations that it will host a record number of fans in 2023, that Ticketmaster will deliver record activity with around 600 million tickets managed globally in 2023, and that the company’s sponsorship and advertising business is on track for double-digit adjusted operating income growth in 2023; the company’s ability to compound adjusted operating income by double-digits for the foreseeable future; the company’s belief that its current level of liquidity will provide its needs to fund operations and future investment opportunities; and the company’s current expectations for capital expenditures for 2023.

Live Nation wishes to caution you that there are some known and unknown factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, including but not limited to operational challenges in achieving strategic objectives and executing on the company’s plans, the risk that the company’s markets do not evolve as anticipated, the potential impact of any economic slowdown and operational challenges associated with selling tickets and staging events.

Live Nation refers you to the documents it files from time to time with the U.S. Securities and Exchange Commission, or SEC, specifically the section titled “Item 1A. Risk Factors” of the company’s most recent Annual Report filed on Form 10-K, and Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K, which contain and identify other important factors that could cause actual results to differ materially from those contained in the company’s projections or forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date on which they are made. All subsequent written and oral forward-looking statements by or concerning Live Nation are expressly qualified in their entirety by the cautionary statements above. Live Nation does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided herein.

Adjusted Operating Income (Loss), or AOI, is a non-GAAP financial measure that we define as operating income (loss) before certain stock-based compensation expense, loss (gain) on disposal of operating assets, depreciation and amortization (including goodwill impairment), amortization of non-recoupable ticketing contract advances and acquisition expenses (including transaction costs, changes in the fair value of accrued acquisition-related contingent consideration obligations, and acquisition-related severance and compensation). We use AOI to evaluate the performance of our operating segments. We believe that information about AOI assists investors by allowing them to evaluate changes in the operating results of our portfolio of businesses separate from non-operational factors that affect net income (loss), thus providing insights into both operations and the other factors that affect reported results. AOI is not calculated or presented in accordance with GAAP. A limitation of the use of AOI as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in our business. Accordingly, AOI should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, AOI as presented herein may not be comparable to similarly titled measures of other companies.

Constant Currency is a non-GAAP financial measure when applied to a GAAP financial measure. We calculate currency impacts as the difference between current period activity translated using the current period’s currency exchange rates and the comparable prior period’s currency exchange rates. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations.

Free Cash Flow — Adjusted, or FCF, is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities less changes in operating assets and liabilities, less maintenance capital expenditures, less distributions to noncontrolling interest partners. We use FCF among other measures, to evaluate the ability of operations to generate cash that is available for purposes other than maintenance capital expenditures. We believe that information about FCF provides investors with an important perspective on the cash available to service debt, make acquisitions, and for revenue generating capital expenditures. FCF is not calculated or presented in accordance with GAAP. A limitation of the use of FCF as a performance measure is that it does not necessarily represent funds available for operations and is not necessarily a measure of our ability to fund our cash needs. Accordingly, FCF should be considered in addition to, and not as a substitute for, net cash provided by (used in) operating activities and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, FCF as presented herein may not be comparable to similarly titled measures of other companies.

Free Cash is a non-GAAP financial measure that we define as cash and cash equivalents less ticketing-related client funds, less event-related deferred revenue, less accrued expenses due to artists and cash collected on behalf of others, plus event-related prepaids. We use free cash as a proxy for how much cash we have available to, among other things, optionally repay debt balances, make acquisitions and fund revenue generating capital expenditures. Free cash is not calculated or presented in accordance with GAAP. A limitation of the use of free cash as a performance measure is that it does not necessarily represent funds available from operations and it is not necessarily a measure of our ability to fund our cash needs. Accordingly, free cash should be considered in addition to, and not as a substitute for, cash and cash equivalents and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, free cash as presented herein may not be comparable to similarly titled measures of other companies.