After months of stories studies and rumors predicting that the US would file an antitrust lawsuit towards Reside Nation and its subsidiary Ticketmaster, the Division of Justice lowered the growth in April.
The DoJ alleged that the corporate engaged in “monopolization and different illegal conduct that thwarts competitors in markets throughout the reside leisure business.”
The DoJ requested a federal court docket in New York to order the break-up of the corporate to “restore competitors within the reside live performance business, present higher decisions at decrease costs for followers, and open venue doorways for working musicians and different efficiency artists.”
Within the wake of the lawsuit, Reside Nation argued that the notion it’s a monopoly is “absurd,” given its low internet revenue margins, which don’t look very like the revenue margins one would anticipate a monopoly to tug off.
Moreover, Reside Nation argued, the case is politically motivated, and has little authorized floor to face on: The DoJ had agreed to the merger again in 2010, with circumstances, and got here to one other settlement with Reside Nation in 2019 over the corporate’s alleged monopolistic practices. So why the change in method now?
Even earlier than the lawsuit was filed, Reside Nation lengthy argued that it doesn’t set the ticket costs available in the market: That energy belongs to the artists, sports activities groups and different performers on whose behalf Ticketmaster sells tickets.
Nonetheless, the lawsuit was broadly anticipated, and because it rolls on, Reside Nation’s management workforce says it isn’t affecting the corporate’s operations or its (bold) plans for the longer term.
“When you’re… in my authorized division, you’re engaged on the DoJ [lawsuit]. When you’re operating any certainly one of my divisions, it’s enterprise as common,” CEO Michael Rapino stated on the corporate’s earnings name on Tuesday (July 30).
Rapino stated he’s centered on Venue Nation, the corporate division that’s buying and constructing out reside occasion infrastructure around the globe, noting that Venue Nation has 15 new venues scheduled to roll out worldwide over the subsequent 12 months.
“We predict there’s nonetheless a fantastic, nice white area on a world venue foundation,” he stated. “And [in ticketing], I believe you noticed final week, we expanded ticketing in South Africa and have a couple of extra of these on a global foundation. So plenty of alternatives nonetheless forward of us, and [it’s] enterprise as common within the divisions.”
“When you’re… in my authorized division, you’re engaged on the DoJ [lawsuit]. When you’re operating any certainly one of my divisions, it’s enterprise as common.”
Michael Rapino, Reside Nation
Reside Nation reported a file $6.02 billion in income for Q2 2024, a rise of 7% YoY.
Income from live shows jumped 8% YoY, to $4.99 billion, whereas the ticketing phase (i.e. Ticketmaster) noticed revenues rise 3% YoY, to $730.7 million. Income from sponsorships and promoting additionally grew 3% YoY, to $312.2 million.
Some 39 million followers attended Reside Nation reveals, up 5% YoY, whereas Ticketmaster bought some 78 million fee-bearing tickets, roughly according to the year-ago quarter.
Web revenue attributable to shareholders in rose barely in Q2, to $298 million, or $1.03 per diluted share.
Listed here are 4 different issues we discovered on Reside Nation’s newest earnings name.
1) Reside Nation doesn’t see any improve in occasion cancellations
There’s been some discuss of late about what appears to have been a spike in tour cancellations, spurred specifically by the high-profile cancellations of excursions by Jennifer Lopez and The Black Keys. (The Keys’ tour cancellation could have had one thing to do with the band parting methods with its managers, Irving Azoff and Steve Moir.)
The discuss cancellations was sufficient to immediate an article within the New York Instances asking if huge music excursions could also be in bother. However in Reside Nation’s view, that is all discuss, and nothing out of the peculiar is going on.
Reside Nation is seeing cancellation charges which might be decrease than they have been final 12 months, President and CFO Joe Berchtold advised analysts on the earnings name.
“I believe many of the studies that we’ve seen have been efforts to take one or two information factors out of a really giant variety of excursions and reveals, and we’re simply not seeing something uncommon there,” Berchtold stated.
Traditionally, Reside Nation has seen 4% or 5% of reveals canceled prematurely, affecting about 1.5% of followers, and right now’s numbers are “completely according to historic developments,” Berchtold stated.
However that doesn’t imply reside stadium reveals are breaking data this 12 months. Reside Nation had signaled on earlier earnings calls that 2024 would see one thing of a hunch within the largest venues, whilst smaller venues like amphitheaters choose up steam, and in its Q2 earnings, Reside Nation referred to “diminished stadium exercise.”
Nonetheless, that has a lot to do with the truth that final 12 months was completely epic for stadium live shows, with excursions from Taylor Swift, Bruce Springsteen, Beyonce, Drake and others breaking data. It will have been exhausting, underneath any circumstances, to prime a 12 months like that.
On the earnings name, Rapino and Berchtold predicted that Reside Nation’s earnings would present a big pick-up in stadium gross sales in This fall of this 12 months, as advance ticket gross sales choose up for 2025, a 12 months they are saying will see renewed energy on the stadium facet of the enterprise.
2) Weak point within the worldwide phase is about Reside Nation’s dependence on stadiums outdoors North America (and the Paris Olympics are partly guilty)
If there was one space of weak point in Reside Nation’s Q2 numbers, it was within the worldwide live shows phase, which recorded a 15.6% YoY drop in followers, to an estimated 15.7 million, from 18.6 million the 12 months earlier than.
By comparability, the North American phase noticed a 25.5% improve in followers, to 23.2 million from 18.5 million.
However that doesn’t imply reside occasions are slumping outdoors North America – reasonably, it has to do with the truth that Reside Nation’s worldwide enlargement has been centered on stadiums – the precise a part of the market that has seen weak point this 12 months.
“I believe it truly is venue kind pushed, it’s not a lot geographic pushed,” Berchtold stated on the earnings name.
“It’s very in line with what we’ve been saying for the previous 12 months. This was not going to be an enormous stadium 12 months. You’re seeing that play out by way of decrease stadium reveals, decrease fan depend. That impacts our worldwide quantity.”
“This was not going to be an enormous stadium 12 months. You’re seeing that play out by way of decrease stadium reveals, decrease fan depend. That impacts our worldwide quantity.”
Joe Berchtold, Reside Nation
Nonetheless, a few of that hunch does appear to have been pushed by geography – particularly by Paris, which is presently internet hosting the Olympics. That occasion led to shutdowns of venues in June, the final month of Reside Nation’s second quarter.
“Most of France shut down for that month, and most of that affected lots of the stadium enterprise for the summer time,” Rapino stated.
Nonetheless, even when the variety of followers outdoors North America is down, income from them isn’t. Reside Nation’s worldwide live shows division clocked a 13.5% YoY improve in income, to $4.69 million in Q2 from $4.13 million a 12 months earlier.
3) There’s no post-post-Covid pullback in reside occasion demand
There’s a idea on the market – or not less than an expectation – that the spike seen in reside occasion attendance over the previous few years or so was the results of pent-up demand that constructed throughout the Covid pandemic shutdowns.
And, the speculation goes, now that this post-Covid pent-up demand has been glad, we are able to anticipate a pullback within the post-post-Covid period.
Reside Nation’s management workforce rejects this concept, and says there’s no proof of a pullback – simply proof that development ranges have returned to extra regular ranges.
“We by no means predicted that the business was going to develop at 30% a 12 months going ahead,” Rapino stated.
“We at all times needed to restate that, no matter a number of the Covid pent-up demand, or a number of the reveals that bought moved round… the fundamentals [are] nonetheless sound.”
“We by no means predicted that the business was going to develop at 30% a 12 months going ahead.”
Michael Rapino, Reside Nation
Rapino stated he expects to see development at 9% or 10% within the years forward.
“We have now lengthy stated this can be a supply-driven enterprise,” Berchtold added. “The demand is there. However the very fact now we have loads fewer stadiums this 12 months, we’re really nonetheless rising our present depend. We’re nonetheless rising our fan depend.”
He pointed to the globalization of the music business – the rising reputation of genres reminiscent of Afrobeats, Latin music, Ok-pop, and even nation – as what’s driving the music business, extra so than any post-Covid bounce.
“What we’re seeing is an acceleration of the continued globalization on the demand facet, the artists seeing that they’ll go in every single place on this planet,” he stated.
“We’ll have some shifts by way of venue sorts and precisely which markets have which degree of exercise, however there’s nothing that will counsel that we’re actually deviating from historic trajectories on the continued development of the enterprise.”Music Enterprise Worldwide
