Live Nation Entertainment (LYV) 5 Nov 202020 Q3 Earnings call transcript

Good day, everyone. My name is Erica, and I will be your conference operator on today’s call. At this time, I'd like to welcome everyone to Live Nation Entertainment’s Third Quarter 2020 Earnings Conference Call. Today’s conference is being recorded.

Following management’s prepared remarks, we will open the call for Q&A. at given be will that time. Instructions

on and non-GAAP in this with on that The begin, you that refer we statements earnings statements refer are and cautionary will related full Live call. differ Live has some company’s measures also results SEC contain business Form release filings the Nation including remind most and information to financial provided factors to and GAAP their discussed accordance statements developments reconciliation comparable Nation or for be in a G, statistical Regulation of to that SEC recent other XX-Q prospects, a uncertainties could release. and the the risk risks to that Live XX-K, financial reconciliation call me found to most In the go Nation’s asked measures results. conference Nation’s now Executive sir. under subject Live cause this Information filings similar on including forward-looking actual It and to X-K section and has to Live Live certain Nation investors.livenationentertainment.com. matters. Before could company’s Rapino, included at of could Please anticipated website pleasure be Please afternoon’s this performance, the actual Michael President to to Officer turn my can over Nation the the will Entertainment. the call Financial description on new risk impact Chief ahead, uncertainties is

we signs regions various events some since restrictions have spoke. our world the joining changes the of business outlook this. to in promise us. or we live and There're see for around while continue been in Good we Most afternoon, last And unlike time return. operate major thank conditions you with no

a further we possible. while costs live update resume for have to soon Joe later management ramp shows efforts as as a discipline strong management in and planning cash now cash up will For maintain call. continue the to on the

strong demand the see also fan across to board. We continue

us there will be Our and the survey is data tell sales time fan right. demand when

first ticket festivals And Greenfields sales the of Red for headed other normal. enthusiasm including year. Zealand we started reschedule are a safely. have out working year. lifted, remain to last of with the start EDC fans their XXXX to are confidence year have sales events global Festival that strong next sold XX% Our survey on recent to to point in roadmap a in XX% globally we return and that our consistently shows low XX are fans take than of when and business White highest indicates the rate back recent by hours A with of tour since XX,XXX place fans New higher of is last back the to planning for pandemic. and where selling events refund on capacity with Las been And for get tickets. restrictions Meanwhile, gatherings on pacing live live encouraged ahead Vegas to keeping out with

flexible. continue return are We recognize but build In next will some and technology on focusing are areas plans. we timeline encouraged are our that so which there focus treatments two exact still to scale summer on shows progress region preparation testing of on. vaccines by we at vary expect help We this by and us will remaining

precautions variety of the is can safe deliver to front, when On live tools sure the technology make Ticketmaster returning. a we need events creating

tracing. contact ticket access new everything venues Existing contact list to the the with from safe testing how flexibility from range text including fulfill our can have manage products features interactions. New ability for distancing to tracking. our products customizable such digital time box with as health our And plan to office key seat mapping been to created facilitator to venue digital tool technology the platform integrate social being of ticketing and entry to give technology needs enable party concessions including applications third and a questionnaire

set content for the front, On executing our Nation’s Live vendors. developing that of a standards shows

be are after are the put I'll November fan is experts XXth past If various turn and to artists through ticket opportunities detail not give with we friendly to emerging With one. purchases venue event, peace and these that develop the on across flexibility can and all and at fans, policies setting ahead over will mind We regions. focus adapt show. procedures situations our collaborating and on place With business. latest show will we options, health the which to From testing procedures, will to during On guidelines will to Investor in during straight to crews more our before, maintain the outline of that, Live look we standards we sanitation a times. see for we the it innovating such, Joe. as

Thanks, afternoon, added our reconciling everyone. additional I to every as number quarter. in release, this the back did the so earnings as to will of last some opposed I Michael. quarter Good hit We've tables key numbers

or and with in continued last forecast As Michael noted, position than all financial strengthen line we the during we've are the our key better quarter what to quarter. third numbers

liquidity our we bring to that to As costs shows back. provide actions the will is cut the until confident need and increase right are with a we us time result, runway taken

reduce $XXX relative further another this, we now usage this million our cash pre-COVID by to discretionary and million have all As have lowered part plants. of and $X.X by for spending $XXX to billion us our approximately reduced by year over

through contribution lowered year-end savings. burn on in we our over to estimated nine benefit run month expense which rate gross Included business. estimate million year on the million the generate rate to reductions, of is per cash have million our $XXX burn our annual in per expect months by margin and the $XXX these average estimate million last operational the $XX to With we prior to for burn rate generated and the severance in approximately of $XXX gross month

is third with have XX% QX million available same At billion the remain low quarter liquidity. $XXX the for Our at of time $X.X we free along available of $XXX cash at rates refund in capacity, debt globally. readily million the and end over

a what deferred now of revenue billion year As the the have end end of result is expect at our we $X.X than And at billion. the as $X.X QX. forecast of increased we

$XX AOI, margin, million which with able is to with into XX% our fixed note AOI QX operations but were operations $XX of from along here some was from this of starting of we've sponsorship place million repurposed quarter concerts. million where of costs assets burn, XXXX, loss One of and to to including in that other in included one-time business into which this commitments contribution items. $XXX Turning at sponsorship results $XXX non-cash cash other million the for that bulk million end it other $XX operational in moved point consisted our maintain was same the of The includes the February. been streaming our

is consistent quarter. we the you cash $X.X line in to what Looking ended in free reduction an of This translates third at end million $XXX told with expected quarter last $XXX the with with QX compared and billion we to million this, at free we had what cash flip due million in quarter cash of which free we a of to QX and reduction our $XXX capital in free happening the told QX. would you cash Part quarter. timing, $XXX metric working last be we of part for the million in

for cash affect of remaining $XX revenue current timing million expect shift free of QX from timing this to of will show shifting this We scheduled long-term in deferred from impact revenue. XXXX The majority the QX. deferred resulted

an So of shift is actually accounting use opposed it to as cash.

million the quarter. per cash month, net margin quarter in or total burn aligns was contribution our result, approximately our which million for gross generated a of the cash $XXX As effective with burn $XXX

deferred year. for show which where told next of tracking year's But refund concerts for for term Live are long-term to QX fans At ticket end keeping events of of the fans we end third as quarter, deferred or revenue rescheduled XX% retain the revenue window a current million for next generally were billion. Of Nation on I deferred you $XXX going to million rate months are their that a ahead global their Now be. $X.X A of indicated, XX% can was to of quarter, in At the are revenue the of of still so was canceled is doing had of to through the Concerts we deferred have short the shift end which Festivals end detail equipped revenue, the through in festivals quarter where QX. million last and $XXX revenue most $XXX XXXX. refund event. more for have third increase, from tickets. year's long-term bit we the due and is this of gone XX by deferred the rescheduled refunds, tickets revenue deferred the

prior QX billion along end $X.X this, at revenue the the the forecast refunds, Given $XX additional of outflow any with additional sales. deferred of million from ticket to projected we now of ticket year

refund beyond the in for burn uncertainty and returning, the Kathy, for let’s that, levels shows questions rates Michael, we we gave cannot the me. any more give or open just Given With on you. call the guidance market timing any of

David Karnovsky [Operator And Instructions] is you. question Thank from your first with JPMorgan.

taking for the Thanks Hi. question.

industry investors concerts may artists, any at sort and economics with a general, look as drove year that are the that you general unique be XXXX Just the confident change which venues should or of how festivals recognizing are or structured. But expect the fairly to XXXX return really you some of it in is terms on long relationships pertains front? term when the will that concerts

economics the change baseline materially venue forward. artist I will the the think economics those the not structurally going promoter

bit ways how about the see you'll on do some forward. to is and spent we've historical business, rate. the players. to how continuing our of change does run about piece hit a business. our economics can And I million think out. about numbers give as drive $XXX looked over dynamics some the overall see how this We I is. we've flywheel key in a costs we in But also And what think it the each we've core we've just time of few better any the you going new on spent reduced take points thinking don't keep thinking time I operate at And

Okay. And back begins $XXX industry or of comes the cost of up when to scale we think again? million then some that as just to permanent savings on that should the follow-up

largely I think we've scale and business to and we savings are -- to be we as we could we'll that is. flows look what what as place in exactly see then to think is expect at see wait it this then XXXX XXXX the see and got XXXX the is those structural there think the we big as of is But costs a through bulk savings. The needed.

then ask in just maybe one to little a long-term And nature. bit

that's more incremental virtual opportunities stage to area Home? wondering got views could Nation recently just bit your it virtual shows with an to on just is productions Live the I Thanks. know you've done selling lately like attention concerts. update little continuing From You to pertains as the if or either your a you access your own to Live

Thank virtual Michael. business. that a is believe complement you. the great to It's We car

we per probably You you be dollars. few school it always concert. probably BTS world But global way. superstars of think Eilish and significant can is some pay a a to think direct old can if says complement going like their in to promotion and the business do core that of always There's know there's generally and beyond that to this go the a Billie view drive

because as of whether Twitter great been it Listen our it's So years. fans we've camera stream to now some think XXXX stream for that et we been concerts value streaming YouTube or when want more and a for and on was for We still continuation through event and at they're will some and that up or and that lot the app opportunity. at angles look that either our event years digital in backrooms XXXX ourselves dabbling our at streaming We've on into we think streaming of maybe show there's festivals of be a going added may Yahoo the to can't virtual sponsors. cetera. a

few and as we tool per sponsorship a for So dollars been it's great a always us compliment think drive fulfillment. probably show helps also a great incremental

is Your Ross with Partners. LightShed Brandon next from question

Georgia. a promoted step won international leadership. Is What guys. a hello? Hey international there anything is that? focus of maybe bigger if the back into – wanted to new to want of strategic read that could abroad. Ticketmaster that who's really I under anything who priorities know But the your to Jerd's actually with Is head to on that departure take Ticketmaster you and based there Is short you broadly more discuss

Brandon. Thanks

is saying years tight, of You over we've been a three case do probably the bunch of know were three everyone strategy This restructuring had our But do next that in is in any able like thinking there's to had nothing we've read. last COVID been we the to you able while excelled we months. sitting and business. the planned really to

an market. So an on Ticketmaster markets where into US. of our for allocation that powerful number Ticketmaster to the Nation is We knew Live We've It's going opportunity global the of on the always priority. has TAM It's one be was expanded kind going you brand. outside greatest know incredible content. always

business. your concerts So as feed ticketing can grow, you’re you

opportunity. So it’s huge a been

technology latest We such kind full going stack haven't a we're wanted. resources pushed international help US efficient global much is as that global now the fast running excelled says architecture on we This get getting architecture and to one it, global the a of been always we we that is expansion. big when at projects strategy one roll to common solve as let steam better the around can always need. that successful slightly US back products at The us our that get we're drag excel technology out once excel technology have at

for to am years. moved I Toronto there product lived So I and myself five the when from London

single the what is Place the is from outside was you Global in is Nation it it I differently. opportunity gets you all it Live see think the And – reason today. it you when gets thinking

fastest way brand drive take would to that and So global day working every what let that who's someone from a we global Ticketmaster reins I that the side grow the believe product. business the was

working team We just excelled for years it even with having leadership strategy product and been Mark So we're the a they've do now. get there. to to

Sorry go ahead.

ahead. No, go ahead. you Go

Yeah.

continually the I businesses the all to enterprise we back world. changed Ticketmaster got going think be labeling were venues to priorities core the around haven't platform, and about, at teams get were two white incredible we’ve when that business they're an

at needs. venues artists Suns terms white and to So and better of it It's business. and the and teams ticketing become a Phoenix ticket were test or the we've whether it's NFL our your great going globe to software their do better the at been And a to platform at artists ultimately kind that. needs. ticketing and that get or deliver power across virtual been company to do the we're is had empowering in We've of platform scale in great overnight yourself virtual to label able

selling We powering tickets through all are shows these them. portfolio and to of our virtual

true on full sure shelves, talked the what we been And sure that making a core. we them strategy. two about that secondary the content we've where at find the it's that's or tickets adding inventory shelves that through the So partners have Ticketmaster stock can the marketplace the making Whether better a consumers more approximately, do inventory is our not more always then clients being buy marketplace marketplace the being to to adding shelves, shelves. third-party

markets So strong. shared of where platforms. strategies basis. under We're on to marketplaces And in sitting continue. this markets rolling global that two lots marketplace our practices on in does clients service our core out across underserviced our concepts global – that old We've are and take a many are global best-in-class global those got we're

if Save weeks what Great. roll-off his ago Club impact Geiger Life had any. few wondering And Marc then a announced

have You he that? can industry with on the think

Morris. William security crew venues We've the of think on same think guards one sure to having he most XX been are in independent year. lighting lot the our employees the being there's I focused But a people the to some the and We and talk on from there's that those the making stimulus that service hairdresser get cetera. help. are at And a very are need. Live live providers et in million in save stages rough no The everyone companies had doubt

So, we've keys price general great there. not is with and Live these you there venues keys When distressed in going about a scale. some the that vocal been capital others can out maybe of roll have are any Well, anybody at throwing to up is and is it point throw is some cheaply the some lot thesis and so gets first very of the cheap thesis in at broken these out cheaply. independent the There's a club to very that someone they're that. Geiger the venues Mark the basically

So in business tough legendary a it's Angeles, a you're if having Los year. you and on the Troubadour

You're time of ways PPE not through you one if else, selling multiple loans keep your two your while to can Mark get business Geiger or capital or afloat, storm. to lots access anyone you the

there's think don't happening at fire a that that that sale that we huge So there's level. a opportunity

of number we’re Now we on fruitful really them own. on know the own. have -- scale business. their really, you a own they're a you clubs if consolidation our their their business, we tough -- not a on up business not Clubs They're are in as -- two

them our to -- synergy you whether on or So, believe we're XX, we you provides -- or that US their own own like ecosystem. of. off as clubs much we our part But don't overall own leverage them synergy you of XX whether global of

anybody, to many help don’t that options there’s because survive hope this find many can them. probably we there’s think the fire like Live through this that to these But and their through are all that for providers their we we we government pandemic of -- and all programs great way going it. stimulus and So that hope service clubs find them way too

Stanley. queue Swinburne with is Ben Morgan in next Your from question

Thanks. Good afternoon.

we from you. see on to your you out. I'm guess latest put eventually crystal And announced tours are wondering hearing tells sale that I best of wondering, what “at what's in on what specifically just scale” major and Michael artist artists ball at when getting First terms your was managements timing back tickets and start

part important there the and is the Well, know, demand supplies right. there the we as

obviously for. we're that's what So playing

still road artist the whether as that we talking back you get factor. an the going we're show are depending age timeline may And artists risk the want get waiting. different have to what to So on safe. and and know many – artists to But that the we when to you're you it's fans know are just are a

As looking are we to a week a when figure by is there all in place week on basis get road. on to plan they start out can when the looking

always about have into a for to been summer you we've the So talking fall. if or artists the into moved XXXX XXXX

Let's hold on to that.

new Let's a tour and that's proper the testing months go And vaccines et through national road. of the on next how going artist any plan few thinking telling and in has cetera. a that we're see

don't at fall, January, to February. look those we but the Let's make until need decisions

So about January think tight into XXXX have you ready. tour if any let's sit let's new start until a but a moving before the you get to you well new have in if fall place costs

-- So let's to new XXXX, is reschedules the add sense general that's January. reset, XXXX get through we let's summer the let's whatever into into visibility with of fall as get better stuff XXXX we a kind a that -- from

that's do issues you think the baked through, beside large or to at well Are this you events you work or pretty makes having are that there know festivals any insurance-related That point? guys sense. any

happened You're this insurance historical about us the what's year? talking on to

the more studios dealing we is obviously … film in with I production, more have more like you mean are and No, do to see know

Yeah.

shut Health-related to protection down. having and insurance frankly from

if wondering, your that's at business impacting Just all?

talking just to Michael about getting as summer of scale. back Well, really because just said we're

got as the like I the And and with optimistic internationally place for public the in actions. needs many to fans out a working think all that And not US I spurious is first in liability sure markets to as be out our the doing is to get to to remain then bring officials that what we government as that of the that those them in long that summer. there health we programs made what we're be that's there's it's figure everybody we're appropriate if from we're next fine doing going every think why done sorted position. that of we're in we've market expectation here and safely back doing it

think looking could it. one think forward you us to cash any I seems what to margin we just question. that area to to If go might contribution that there versus burn way of Joe I And QX? QX that saw the in know if and ask quarter through the might cash in your in use you try that help one the number? see you Got benefit help Is about fourth to know

I say think but is that And moving QX different. given that Yeah, nine months. I've different numbers were they pieces growth each really and for you burn from Obviously different weren't I can don't around, and some cash other. QX operational wildly the

pretty QX. So that on easily over the you leaves can do calc what for

mentioned the lot. thanks you Joe Okay, And sponsorship already. a

it Yeah, year. the with CM we XX% have of of of as rest rolling They've in possible what's quarter sponsorship that place. this commitments some of of stayed in driven stayed most of had next where into we that's February the the XXXX our and had particular in end that

you. Thank great. That's

Your line on line next We'll mute. Katz, question. open. your move to Katz, is is David question with the from Mr. your David on Katz next is Jefferies.

Your from next Doug queue in is Hebert with Research. Arthur

Yes.

margins on the things rationalizations permanent sort segment company may added underlying basis longer a the some on Based particularly a guess the to costs of be all done on will is take have mean, the for when back you I slow Joe. kinds to you’ve necessity. found burn. question the business term to a change of it So conclude fair to gets that the Is you’ve that out that normal Michael concert on on surge structural of obviously basis? of had activity of or the be there'll be higher and inherent point at I this based sort there

Joe. of for is over will start. said I is the Yeah. from savings The million about answer future. we yes. I'll talked cost pursuable $XXX the severance the That's that that This be out

So that ramp to into is it and obviously costs possible other as of then up piece manage we year. as as as bringing slowly needed we'll next get out the

And the I add make that of want time things sure we've to one add about just to to we're it's want to -- a just not -- reengineer. just had to I severance

everyone is a So burn, that learning too. office is can one regional reduce of organization all now to home and tool a from Cleveland. is of the strengths We a a strategy. offices. learned have lot We We And down what the of shut everyone's burn, is like that our more from home Bay can for our strategy. work us learning. decentralized workforce much from of with new Tampa lots We offices were we're very have those flexible monthly work can

some how home versus now the have from been out we can still can and gift an at volume restructure we we of to new work incredible costs. a ours regional deliver We've figure a reengineered times. offices has model the like a without where need and So maybe how decentralized model local service same also

our fixed and Nation Live and goal wrap both full and been has run So at at annual right into $XXX a on million from our home, to our rate now costs. up. That's a run between reduction Ticketmaster, reengineering goal globally work

on back of think Are there’s flexibility initially in do there’s to maybe is artists [ph] on you lot issues, you scheduling indicating things amphitheater as and this And probably management artist equation? up out some of side seats what probably demand how the for that come restricted on will a down many question an more to can but get just be conversations sort you. if particularly in the Ben's payouts flexible and following have teams of road artists start terms you're your sell of on

mean going I by require going up. to XXX%. affected differently. a ramp been the this start everyone Yeah, to world's has And slower it's understands

driving XX% distance the XX% Roxy the on weekend attendance you shows. social the adjusted – already maybe see So back the have on shows doing will all Those work state. guarantees we see Atlanta start artist realities depending it where in We're coming expectations to we on XX% to the and based capacity are all up the be and an to as rocks from the industry capacity, XXX% the to as artist adjusting eventually. to of XXX% their we so scale the

And we Jefferies. Katz David with have

you. visibility Look I around good. hear trajectory financial perspectives your limited capital of rising considerable sources endurance capital any given this wanted just this the thoughts at the any Very Thank of or and point. the or I to recovery. about

This is Joe.

themselves point enough as see cash. through concerts flowing generates Ticketmaster we the in start sale, current and numbers it our don't gave think got back we necessary the remember ramp cash months the got and because pretty Current we think going a which I this that burn. debt business in sponsorship. backup. we've at the as – shows to the starts get you've into the cash you before Also that We a the detailed on capacity lot into us of until on

at you up. can the period ramp the thing need same there know that back take think will at we tremendous just see everybody At this don't that knows this is we that we same arise. time, us liquidity out it in and some the But that the is point point. we through So get market until else should

next from Instructions] in Cowen. Glagola Stephen with question [Operator Your queue is

business prior on going Has et margins digital push when structural just the conditions to Ticketmaster pandemic back I utilize above moving the event technology expect cetera. Hi. global to threshold accelerated to tech that to changes question stack the your ticketing ticketing XX% these the changes and shift organizers Thanks. XX%, for normalize? you the Do

and going Michael business of streaming a to the sense point first revenue in overall on fact that and artists it all digital out get our other fans it’s very a complement it I for makes do who interesting can streaming the the to of has on. spoke show markets the we forward and the additional they think can't think so stream they an show been we to So and also see ticketing for when for ecosystem. And sold

provide to that doing with now. digital tickets ticket traditional ability Gap] important [Audio the So more right and along something do we're and

globalized on some cost in given and terms spoke is to all we've that inefficiencies of that in of but cost numbers and to the of going Ticketmaster taking you the the that existed certainly platform associated specific we no we question here with and give So Again together. rust on have globalization. a reduction obviously might some in a of on think numbers bringing that chunk then overall and see the structure. I we're Michael accelerating about reductions forward further going driving think TM some that you today, team how and the don't and

that Appreciate right. All John.

on if How I seeing show twice hold see Obviously can. their a for maybe that refund just onto people expect or to more you're have people might altogether? sort once public and right you show of before tickets believe move or shows moved been demand you the most I can many postponed. most one now. them Just up give the cancel have are ticket times buying to you a you

up that does If just you four do canceling a into or times end situation you where get three altogether?

They Fans the supply fundamental Artists as tour. dynamics livelihood. want said those changed. for Yeah. demand to to tour tickets. and not have their Michael Look need want

money refunds of months XX% want. fundamentally to saying was Everybody's sitting at months no, back. later wrong. We're we a ago going everybody their six know lot want six XX%. no saying. what Nobody's the proven almost of And had I think in You going fraction that's folks a to

for good an that going there's who able get they as that want an want formula. so be to artist they're show ticket remain fans And to whenever to they possibly go is. a we not confident But as to can to to to very go exact were going soon that

Ladies and this today's you Thank gentlemen, conference for concludes call. participating.

disconnect. now may You