Live Nation's results should settle concerns about concert demand, analysts say

By Bill Peters

Slower sales growth during the quarter was 'a function of fewer stadium shows and not indicative of softening concert demand,' Oppenheimer analysts say

Concerns have grown about concert-ticket sales. But Ticketmaster parent and concert-industry giant Live Nation Entertainment Inc. is seeing none of it.

The company on Tuesday reported second-quarter sales that just beat expectations, although per-share profits came up short. However, Live Nation (LYV) said that it expected next year to be "very busy," as it books more big shows at stadiums, arenas and amphitheaters.

"Heading into the print, demand was a primary concern for investors given some weak consumer read-throughs and noise in the music trade press around a small number of cancelled tours and festivals," JPMorgan analysts said in a research note on Tuesday.

"The results today we think should put those concerns at ease, along with commentary from management reaffirming the long-term drivers for the industry, such as growing artist supply and globalization of demand," they said.

While sales growth slowed from the prior quarter, Oppenheimer analysts weren't worried about that either.

"We view decelerating 2Q revenue, 7% versus 1Q's 21%, a function of fewer stadium shows and not indicative of softening concert demand where North American cancelation rates are lower than '23," they said on Wednesday.

Shares of Live Nation were up 1.6% on Wednesday. So far this year, the stock has ticked 2.4% higher.

Live Nation's results came after a handful of high-profile artists have canceled some tour dates. Billboard has reported that tickets at Coachella and other festivals weren't selling as briskly as they once did. A CNBC article noted in June that industry consolidation has given artists fewer smaller venues to play in, leaving them with larger venues that are tougher to fill. Analysts have worried about more cautious spending elsewhere - on travel, fast food and coffee.

However, Live Nation said cancellation rates in North America were tracking lower than levels seen last year. And Chief Financial Officer Joe Berchtold on Tuesday said that routine amphitheater-concert promotions geared toward more casual fans drew "increased interest," with an uptick in sales closer to showtime.

Chief Executive Michael Rapino said during the earnings call that they never expected this year to be big for stadium shows.

"Stadiums were always the challenge and international was always going to be a stadium issue, given the Paris Olympics, most of France shut down for that month ... that affected a lot of the stadium business for the summer," he said.

"So the good news is, as we predicted, 2025 looks like to be a big banner year again," Rapino said.

The Justice Department sued Live Nation in May, seeking to break up the company, which has faced scores of accusations over the years that it uses its size to squash competition and saddle concert-goers with junk ticket fees. Live Nation runs some 265 concert venues in North America and controls a majority of concert promotions in the U.S.

Executives, during the call, however, said the legal action hadn't changed how the company thinks about expansion - particularly as it relates to buying other businesses or opening new venues. The company said it plans to open 14 "major venues" this year and next year.

-Bill Peters

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07-31-24 1917ET

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