Live Nation Entertainment (LYV) 5 Nov 212021 Q3 Earnings call transcript

Good day everyone. My name is Hector, and I will be your conference Operator on today's call. At this time, I would like to welcome everyone to Live Nation Entertainment's Third Quarter 2021 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

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

pent-up attending AOI Festivals with past $XXX of roared concert us. companywide the of tours season versus out large a tours quickly, of And of you XX with Styles, AOI sales rebounded quarter record already overall fans for Stapleton, Harry to for stipends quarter, Then positive tremendous festivals return our XX% first shows up million. this we live, thank to sellout live selling over has in returned the summer then our The the Chris Good by joining Live including in time, festivals ticket and had sell time years with and XXX, million all many were demand. to number our was business in XXXX. part for tours two XXX driving others. this afternoon. music our reflected summer for back over are year, major our XXXX tickets

delivered that increasing XXXX. and compared enabled festival and average protocols, with environment to our over addition operating attendance, us XX% with also We these quickly onsite relative strong In an demand and improving at to double-digits and major to to frontline in up fan our required amphitheaters at spend XXXX, record levels a market. fans festivals with amphitheater tight new spending per wrap safety in shows, pricing staff labor up health pricing up both results and it's

set shows, the requiring vaccine for we change testing industry or with safety proof the On our standard purchase front, fan health and in by behavior. no of

events. us mitigate our transmission effective and to More from officials to in UK, major disruptions mitigating health the to local protocols U.S. business importantly, in with and at our COVID conjunction allowed risks proved our work

labor for our any the were without outdoor staffing set season disruptions. able requirements to we peak On front, show

was AOI XXXX GTV ramping excluding fan saw We highest demand concert We refunds, ever. led its delivered quarter fee-bearing for restarting QX fourth results. Ticketmaster's and by sports quarter also Ticketmaster our up. strong in legs highest on-sales

the value September, its music the to content in the back, to artists fan. And to owners as continue so more delivered to continue month and partners our GTV who highest seek as showing live business shifting growth brand in secondary of did came even continued the connect fans primary Ticketmaster's addition, sales. In segment,

and sponsorship over since of been in the partners, time Return segment. our delivered largely Coinbase with sponsorship and new of and result, driven addition XXXX. QX a Seltzer, Truly well historic first advertising advertising this $XXX Hard the business as As major at million level Solana of quarter, AOI the brands, including has as the for in Fintech by along

continuing At to pipeline expect -pandemic level, positioned Advertising net Ticketmaster count invest events [Indiscernible] each shows pre also ever our Chili in is we than already over for year. tickets other indicators Red-Hot these also And a to with many Sponsorship million XX forward fee-bearing in million shows tickets our of tickets sales, XXXX year, XXXX. new business up arenas, XXXX fee-bearing over plan, us stadium and XXXX of stronger so Peppers our look for for time the million to the further transacted on already a had global each And have from nimbler be encouraged XXXX through our time, focused basis. record next after million to leading reinforcing we clients tickets selling cost mid-October, growth XXXX XXX,XXX confirmed better future added sold already at several fee-bearing for accelerating and confirmed XXXX As similar and to XXXX and are Through tours point up this the million Ticketmaster across its our demand XX for relative for all deliver XX for to are relative sold shows. we making we double-digits, show by tours, are our far across on GTV structural in has October and this Coldplay we demand, same double-digits business. even in selling to XXXX, $XXX amphitheaters, on tickets. as sale growth. with represented been savings this in success,

live entertainment and will to global road With a our will proven more over here. No months. continue the power expect in live the potential industry such will expect page fully industry But and ever and Joe turning by more will and international its As no of we we get last the through the of on let it for of years, position. two close the basis. take you out pandemic truly bumps we in only Live the and to artists And so I was maturing entertainment, more the some Nation remain to take the XXXX, disruption. on proven has face our has durability from of coming results. I than in convinced demand details strength the grow in have in impacted of the time fundamental that, continue I strength

and afternoon, Thanks, good Michael everyone.

UK of Before into they of quarter. primarily of the QX quarter, business, of context each first, detail the of getting XX% on XX% a accounted is in U.S. points and XX% this a XXXX. for XX% in And our markets versus These in QX represented fee-bearing driven in fans QX few XXXX. GTV for versus QX

activity primarily with concerts and attendance in in our our of up occurring August for August XX% September. shows ramped Second,

Let me divisions. now the go into more detail on

First and give amphitheaters comparing in for amphitheater these set our onsite played concerts, XXXX and pricing With us was U.S. UK. XXXX. to shows our for up both spending off, shows as almost the major best festivals and the Michael data noted,

pricing hold So, was to trends pricing, are for festivals. in average to for more XX% ticket our drivers on X detail $XX. up On at trends give these and our shows, primary this. general, you amphitheaters also There the same

First, VIP platinum pricing for ticket this and ticket shows more increased pricing, by including tickets average year, $X.

card fans larger cashless was Many transactions up impact and had a of this transactions, cash an to part to order. fan, promotions growth our higher-priced XX% our shifted week per held and were year, Secondly, XXX% shift smaller-scale shifted $X of as average from buying spend helped which other our Then order, the per have of ticket. of which historically this been also up promotion we average and spending, spending combination to cashless. concert This was for order. higher to than per has per items spend more came orders higher And $XX. products, onsite more fan per as

higher to were such These so time increased with and ticket same and noted the ramp tightened to expenses generally the market. did costs, increased higher per average costs our fewer labor by level our protocols this operating costs up summer, a we double several health and spending, driven the including Finally, accelerated and that as labor onsite labor price factors, buildings a profitability rose up. shows At per of building, safety per new fan digits. margin operating are net open contribution fan,

structure record sports sports Turning the over highest of as primary said, the fee-bearing than Michael its sports the UK. lower though accelerated GTV its similarly limited were case, fee-bearing was represented refunds, fee-bearing over now labor which and Ticketmaster ramp-up by cost AOI XX% Primary substantially return driven staff. was for GTV lower excluding we quarter with faster driven ticketing of costs $XXX Ticketmaster, to concerts, had fourth by for while GTV, as from million quarter, a a activity second in outside driver activity of we as remained ticketing, secondary the this largest America accounted of fee-bearing reorganization. of with of of account Geographically, and saw new concerts In the seasons. all they and GTV. launch approximately basketball for football and XX% XX% for GTV, fee-bearing together accounted category, XX% internationally the Along North

signing continued new new client to the Another with quarter. of strong net million new tickets These over growth have our of is tickets. X/X third clients this the accounting been particularly fee-bearing internationally, ticketing our for XX client new added year through contributor in additions

was activity. new largely activity X And able $XXX it our the online. in sponsors had adding as of as available XX% driven new units X in Finally, total at again we other the million accounting U.S. a to Like sponsorship time together both also were the for and years on-site quarter. UK scale, for resumed, AOI strategic it engage in surpassed and businesses, ad sponsors, quarter approximately first

in concerts, As continue to the had we levels. we the we historical With continuation QX. to America trends and look UK of same North activity toward expect we see QX, ramping a

And international of other tours activity QX, slower concerts. while lead ramping and levels XXXX and put broader a concerts could is already despite levels, have a we that most markets and for plan markets QX from typically European XXXX tickets should stadium up. too seasonally the enabling in sale While benefit expect arena for limited events. XX sponsorship, on ticketing ticketing period Europe recovery being time GTV the QX it to With fee-bearing given sold million sales rest approach as

cost Let to us our cash now management. and turn

$XXX net free includes where cash. XXXX since than for our in have $X.X which acquisition. billion at higher end cash million $XXX OCESA contribution first of cash our the contributing quarter, the million was quarter our earmarked This cash burn, at We a free the was margin

be was spend ongoing improved This program as the -pandemic We by as then mentioned also cash pre side our year, cash of free cash cash long-term would added costs $XXX million and for we relative for loan Term plans $XXX cash, and summer ASESA. $XXX happening. previously shifting the previously. in in expect and position had $XXX next billion drawdown revenue excluding equity management cash reduce We our by on cost to reduced helped $XXX quarter and million show's short-term through ASESA, our million by largely we $X.X deferred into million, to indicated also by resulting from million A raise this

relative operating prepare items. remain costs As plans, plans. our our reduced XXXX pre other to we confident -pandemic balance few have million sheet we for we by XXXX $XXX that A structurally

best point revenue of deferred QX of of billion. was like the million continue reminder XXXX, until demand which a to debt, covenants for is quarter view at And to this more the the of leverage then This that like pipeline report at end gives liquidity we Our in QX already the at test. place. year, $XXX which $X.X we us end with the traditional we compared our a switch on our

let me anticipate do Given for and next our covenant issues current liquidity not With year, growth. continue activity through open investing we to the in levels, expect call and any Operator. that, questions, and XXXX expected QX

with conducting [Operator session. first question-and-answer Thank your line this be question. from comes we'll Our of you. David proceed question with a the Karnovsky J.P Please time, At Instructions] Morgan.

how finding question, rob just structure, is reduced XXXX, from AC target driving how as on about relative to road who huge costs then to the here out goes What -pandemic thinking that a kind bears coming about where and to have focus noted growth concerns and of constraints toward then [Indiscernible] were think pre you. the think you an that in efficiencies? just found move you've supply you up, are you are any cost about And promoter you Thanks. a you or I with labor scale. Thank returned cost second to extent about expense wave operating there do you crews as organization this artist. as ramp new less

Sure.

benefit so on it at base and Just through points, a with had on -- we and concert structure, will, revised the structure how we in past our if operating cost lot X a approach you a globalization half, the of various reduced year of really the over side. talked we've around our and Ticketmaster's cost

ever the any laid is terms are because renewed or out it's then runway and so. to that approach this with And in be the as it's as business expectations to our issues we operating business, there profitability So, pretty we're business. the our continues methodical cost a of grow think long to not a structure continue do I we to want how move of than run that good seeing we incremental been, better and to forward been

terms on constraint our all talked, In of any we of put to this without the we year issues. shows were labor able as

you activity end that what at about, activity in terms pipeline in that that of next of we constraining terms of getting of back the any short-term or level is that does but able XX to year to the forward don't to the issue growth -- still our in Ultimately, a we're short-term long-term think for the had, talking staff, year. we're mega Looking grow we've of of do we shows. is terms there's some where in probably level can't have why in It buses the with won't ability of your get no to get be the to to year. your XX% it or given of next growth. have doing And tours, constraints there's

the artist that for terms they're out different the that folks being incurred, pieces and the responsible for the road of generally is it's costs we're crew operate. In on for that venues responsible their we and different operations their

million to have instantly little Just August we're April, we would've all dollars. happen fully people amphitheaters that, texture said. we for absolutely a add surprisingly concern in jobs, usually cost idea to -- had would few back we the those that way add had a but to as with to or hire summer to just able Joe of we in Marginal XX,XXX staff July increased would

see to get help did workforce that back that work machine eager the So, come part-time we needed seasonal make were the back. to to

we So, didn't have that challenge.

global of artist and work basis. we supply plenty trucks, lights, the then amphitheater, a attracting make looking said, I don't we people the think the job environment, how category there's at lot to at an etc. issues. challenge, type so on machine a cost the Joe retaining of club, do job, and as we theatre, it's we're staging, we had the lifestyle of that going a better exciting in but to think coming as keep them today's no work The on chain to stage, like gets a see

Thanks.

of question line Q LightShed with Partners. next with Brandon from comes Ross Our proceed - question. your Please the

for the Thanks Hello. questions. taking

return Just XXXX those the how know we've the Wondering the back on quarter -- a and we you have you when could then your of there, been and the if And world expect predominantly to lives U.S. but the to big US and levels follow-up. to get world in in seen talked I about UK. that beyond I rest out can and give has a UK. it's an when update the

all Canada, a UK Joe U.S., week I'll very open yesterday had can Europe call are by open. end with the We're fully We've the global different be will obviously feeling -- our of of Yeah, confident, presidents. fully this and jump. in jump we year.

around short-term again. will looks have and world of main fully all so most is we'll think the our open rolling. doesn't being Pacific artists April business affect that basis all April. So, outdoor summer positive markets stadium open most overly Rim, festival January. of for up global the fully will in of moving on internationally, by be be into the international because It a business Latin terms time, America, by We

Latin Australia starting and Lollapalooza festivals. in April have We in America

for April. So, Europe, of be in now prime we'll markets season, main and we between think rolling U.S., Canada, we'll be the UK around and the open indoors and

little focus Right, wanted your a to and business. on I O&O

on to fans? the to you You starting year that your talked Is plan way that about a do a that you festival season for prime and extended into season got summer season you start, and own off going extended more April, this AMP of the summer as keeping season late forward?

Yeah. It's great right. point, a

in think much and extract from yourself your forced see to at absolutely open years and historically America can it last value look we just we of base, stay this have. You specially than most in longer more and Southern X we differently now

will seasons for we sure. the in yes, So look to extend those markets

you then to Michael, social strategy explain new world? venue trying saw And other the of Can Great. is accomplish us your your I you're invested what going on what some venues. parts maybe new you in international in that forward, to

I underestimate about venue bragging always we our think portfolio.

are Holland, that over theaters, We world, ready amphitheaters, well XXX arenas somewhere operate the clubs, in in Dublin, etc. we venues

for venue we festivals consider a you get for the almost And venues, owning we the all vertical the business us. know streams. because So, the go own to I revenue weekend, high-margin real is estate you're that when

a around city festival highest all much boom time the margin like to is, our being world show have theatres estate anytime that a streams, our our tenant in now looks has or we count able it's at What the and incredible So this used Ticketmaster's, business. asset X major last in over sponsorship there on movie to at by venue use our put they seen in the can we've world their as every development. ticketed revenue real entertainment look in the years, is live been new where the

to their the one developers into arena building wanted anchor X,XXX-seat, world who around are talking than So, multiple a of maybe we are and an they ongoing X,XXX-seat, a developments. something X,XXX-seat,

that great markets. the these So, the for last Austin's for where a arena to next in be expand see of portfolio mean, over club, and division world the arena. amphitheater we've ramped Austin our a that continuing there's our our to a an market no around really example going prime now, up return X the in of going venue years opportunity we We're of I right theater, open It's complement as venue live shows to years. to portfolio. us in couple monster our single great

So, we'll opening an continue any markets the to of world venue very be for the there's around a in where size. live opportunistic

Great, thanks much. so

next line with with Our Sachs. question. the Laszczyk Goldman Stephen of question your comes from Please proceed

you. trends that maybe that into then, And the conversely. detail those XXXX you now seeing think the to you year? talk how shows compare closer pricing that XXXX, bit have all thank Thank might little shape, the wondering vantage slate's if you I summer just little provided expect could getting a normal the we're in if you trends of I play to taking and and entire was you. out could you cadence talk Great, a across spending an was these will I durable about more on the trends and that point next now more how especially about appreciate year, bit in quarter. a of wondering you the be

the pricing on the start Sure. per-caps. Joe. This is and I'll

of I believe we're we've best the that structurally is front of think driven secondary and where this a years. the pricing arbitrage the seats the over the on now more house, as the of artists even by money several the from growth consumer the level heavily pricing, been market long the of this we spend seeing [Indiscernible] to and past moving known size there's because we've continued

those then we're we're the the staying. it's VIP, So, tickets. number onsite, More it more And on strong a getting And think best we relatively from because that seeing are I this year seeing on of that confident tickets, money that trend continued. platinum demand the to inelasticity a come fronts, for artist.

we about talked in right. it the So, comments,

going terms seeing cashless structural opens to people making X each. half to moving just cashless, spend. It's price instead higher of some been And to a existing higher XXX% we're bit the long between a the a then our just increase Moving those of to up being in from cash of are people take again some trends because alcohol, difference average a products. of point for quality more product deal are of of offerings raises

All that of a are past we trends the expect to no several have would seen the be forward. think reason any over years that going and we've that different of those continuation

In bit. terms in year the about of cadence talked Michael shows a this and for next general,

QX, next be see largest where QX It outdoor amphitheaters great Obviously, continue in and here You'll have those had. sport the the the our ever primarily months. when months quarters. we've to in timing U.S. and And we've months. away be of QX will those have similar because the looks avails stadium and season. certainly to That those year. QX arena far in the we'll of -- will more our even That's largely you festivals, strongest stadium be just a

in no So, seasonality reason similar to there's historically. as we've had general not expect

Great. Thank you.

the please Glagola next comes Stephen question. from proceed question with your with Our Cowen, of line

that we update Is pandemic that on out about segment that that an the of should quarter, we know you I or annualized the were margin the had just about basis. talking mid-single-digit be higher shouldn't ticketing talking you margins thinking business at if prior you are about the talked coming expansion great love than that you on how is on wanted ticketing something Joe see XX% now? still QX you. margin to know said I I extrapolated. margins, you And another had on Thank but be Yes. prior AOI. XX% about

than than few up believe the one you've faster of that margins see to ramped we -- a quarter This things, ramped this benefit Well, cost our we staff. expect year absolutely we I you've to historical our reductions. the of think up higher being got activity you'll because continue particular

talked then more driven, were margin much that cost higher management U.S. As historically this we of than driven, and more pushed from the from market talked, as and secondly, we a we our extracted so higher people is is therefore And service we've market a about secondly we the our and internationally. that also side. fact fee and said, generally U.S. doing a UK

So, mix but ticketing some next convert to think that exact think the shift will relative do of I to back year. don't ready will numbers, we margin improve historical. certainly give we're that

you. Okay. Thank

of next question. question Katz the comes Our from David line with Jefferies. Please your proceed with

move evening going materialize, there's Hi, wanted and well my thanks and any taking point, XXXX, has, And term, everyone, to starting there if the for up. there. numbers it evidence as With may out XXXX, as air to continuing to little question. phrase pocket think there's Joe, one like help at everything bit a no have you support Any would used In be the the I to welcome. ask I trajectory longer

Yes.

a year, we've think positioning. about how said is before. The Joe's look there's their at find their is going and probably route and smart many only record I Fridays how they news good Saturdays the artists world they and be pretty are 'XX to point, but it to think I tours right and so

kind it’s of So, itself. self-regulates

tours weekend going have never of piled the You're on bunch to a on. same

into more talking a 'XX, to meant just that spread 'XX, 'XX we we're now. So inventory and have

as space over on world. the both ongoing. project that the double-digit 'XX, -- in would regular incredibly year, get continues and continue backlog continue to volume in to had to And live we've we a So, have strong we growth the demand system that 'XX. to global will back be entertainment pricing say which around the and grow to through then still years. We I needs supply work

Michael, may just I Thank on -- deal the follow-up you for front. prospective that. And if if

spoke, starting when become up ramp active. last think Any potential to acquisitions of I that's again we activity update sharing? terms and in worth there more were

that to, keep looking we're to been We're follow scale. our pretty you can Twitter, backlog world. of the around our my with propelling If or XX growing our we've up business back active. We're at things what and XX

our So -- aggressive continue of pipe products it. to good and very global good growing share be pipeline will monetizing then market top on at

much. very Thank you I appreciate it.

next Sundby of William question Ryan Blair, proceed with with your question. the comes line from Our please

Hey, my Michael. Thanks taking question. Jeff. Hi, for

added Was during at you been business? there Are that with ticketing? new would of them growing If a international partners and fee-bearing change COVID looking then drivers primary the for net X/X for look these particularly color are year Ticketmaster’s the this they far, million be customers any and exclusive and taking XX what's being so there great. digital that finally,

as them indicative markets. international international, the think particularly of of is in said, Sure. you X/X I

has lot Just investments the what a past with X strong leadership position a Ticketmaster been the of we've making years. over

play we portfolio. tickets trying allocation. long the of being have a and differentiator, our markets been digital digital we've aggregate it's markets, of away mix of you as other to these a not adding we a said, leadership investing have catch-up. a big XX partial feature you're there is from tickets for because is the we're and -- ticket, to time, ticketing, So full overnight part nice are to critical need in goes a allocation it And a million moving a you some But in from contactless where any sort,

William, I that basis. would add global I is forget ever want great do just a they don't on to Ticketmaster at incredibly what

season If complex a business ticket own stadium, tickets owners complex to business a an with scale. it's arena, and you're at do -- regular you high-volume if --

coming end So, of customers, lose a a may up we they customer, sometimes our back. lot

we've the years. this in remind been just for I one, platform to you, want last few investing So,

the the all on-sale platform. seats the equal your to model things is XX good. Our platform that are so world-class world. market system a and season platform really when seats box core the the at enterprise manage The with complicated is U.S. ticket enterprise Reserved market most a complex AM in on pressure is

being out the competing But at just see end for that leave. clients may because we we're We that end the we ultimately are we winning up the this business up So, broke seeing see that's stuff. a more offering. because the provide that best because it. pretty that was a others. basic where competitor back presale do to we We're in that last is week trying a coming functionality and to Brooklyn the And arena superior

basis, So, we are people great all base us. going we is opening in global technology I what And our for up to pick be and just be our of the then global of the do. to best That's to next a happen while. a global remind runway why we clients

makes here. called at And didn't further you pass [Indiscernible] then of you move, you it a a out? feel? see And sequencing Did out just quarter, That past I you it. like Got then lot rebound it a from sound as guess Delta impact sense. this did big

the think every to I've in it'd to that separate reopening, going month rates, we so more ongoing low in was continue show more single-digit of general. for to specifically fans shows us, result contrary reopening Delta everything as I no-shows a out consistently, saw in the of to no versus hard low increases see the terms we growth to very some of press seen pandemic. But be low

fan to to base a grow out the seems the go people to want that's going shows that to the shows. as And the it that So, are portion continue there. of just

hear. That's Thanks for good questions. to the

add just the would I point, -- genres in ages. Joe's noticed is also all what it's to And different you

going are route doing to Grateful business. up just The to Eagles the So, on week this indoors wildly arena as tour Styles doing they're this but business had well because record in not to stadiums. successful kids full finish just that's Dead amphitheater Harry as young going isn't shows Seattle. obviously our a scared just

if would did going we would difference, across weren't all So, segment board demos, market a age what at all or we the demand demo saw all we into ages, or react be and huge what the -- there differently, markets. sure

with rebound back sales forward. seen we've strong going as early the on So

we you. the Thank have Ladies and of today's and session, end the conference. gentlemen, reached question-and-answer concludes this

You may your at lines disconnect time. Thank for participation. your you this all