Live Nation Entertainment, Inc.

Good afternoon. My name is John and I will be your conference operator today. At this time, I would like to welcome everyone to Live Nation's fourth quarter and full year 2024 earnings call. I would now like to turn the call over to Ms. Young. Thank you, Ms. Young. You may begin your conference.

Good afternoon and welcome to the Live Nation full year and fourth quarter 2024 earnings conference call. Joining us today is our President and CEO, Michael Rapinoe, and our President and CFO, Joe Berktold. We would like to remind you that this afternoon's call will contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company's anticipated financial performance, business prospects, and new developments and similar matters. These refer to Live Nation's SEC filings, including the risk factors and cautionary statements, including the company's most recent filings on forms 10-K, 10-Q, and 8-K for description of risks and uncertainties that could impact the actual results. Live Nation will also refer to some non-GAAP measures on this call. In accordance with the SEC Regulation G, Live Nation has provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in our earnings release. The release reconciliation can be found under the financial information section on Live Nation's website. With that, we will now take your questions. Operator?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up. Thank you. One moment please while we poll for questions. And the first question comes from the line of Steven Lasichek with Goldman Sachs. Please proceed with your question.

Hey guys. Thanks for taking the questions. Maybe to start it off from Michael on consumer demand. You guys have put a lot of stadium supply on the market over the last few months. I'm curious if you maybe could talk a little bit more about the demand trends you're seeing play out across the slate so far this year. Is there anything that you're seeing that makes you any more constructive or perhaps any more cautious on the demand front since we last caught up in November before a lot of the supply went on sale?

Thank you, Steven. As you said, we've had a great start to the year. We've got a lot of inventory in the marketplace. We are seeing continued strong demand. We're seeing sell-through rates at the stadium level higher than any previous year. We look at one stat. The first week on sales, we're selling through over 75 percent. That's much higher than the last year. So we're seeing consumers buying up those stadium dates faster than ever, up year over year or any comparable base. So no slowdown at all. Lots of inventory, but equally great demand selling most of these stadiums out or close to being sold out by the time we get to the show dates.

That's great. And then maybe a follow-up for Joe. Given that inventory that Michael spoke to on the stadium side this year and the mixed shift in that direction, I'm curious, Joe, if you could speak a little bit more about the puts and takes on concert segment margin or maybe how we should think about AOI growth this year. How does the mixed shift back towards stadiums in 25 impact that? And I'm curious as well, the visibility you feel like you have on the venue nation, amphitheater side of the equation. This year, now that factors into the AOI growth for the segment.

Yeah. Thanks, Stephen. I think that this year is going to be more like a 23 year as we look at how we're growing the business with all this stadium volume leading the way. I'd expect to see some good revenue growth. I think Ticketmaster, first and foremost, will be a big beneficiary. I talked a lot about last year on the other side, they took 10 amp shows to deliver the kind of revenue for Ticketmaster's one stadium show. Now we have all those stadium shows. So I think you'll really see that benefiting on the Ticketmaster side. I think that we continue to have a sponsorship business that's performing extremely well. We note here 75% sold up double digits. So you expect that to continue to deliver some ongoing strong growth. Then I contrast side, again, all these shows, all these stadium shows were absolutely making money on attractive returns. We just don't get to count the beer money and the parking money as we do with our own venues. So I think it will ultimately come down to the pace of revenue growth versus the pace of AOY growth, which we don't know yet because we haven't gotten into the season. So the latter part of your question on how much growth do we get on our per caps that are amps at our festivals, theaters and clubs over the course of the year. All of that will just help determine the exact balance of revenue growth versus AOY growth there. But we expect to see all of all the businesses performing well this year. And as Michael said, in aggregate, continuing to deliver double digit AOY growth for the business.

That's great. Thank you both.

And the next question comes from the line of Brandon Ross with Lightshed Partners. Please proceed with your question.

Hi, guys. Thanks for taking the questions. Something that stood out in the release to me was that Ticketmaster transacted ticket volume, you said was up only 3 percent. And then the event related deferred at 11 percent. I thought that would have been much higher given the pipeline. And frankly, the answer that you gave to Stephen's last question, can you guys explain the disconnect for me?

Sure. Let me take the two different pieces because I think they're slightly different in terms of what's going on. So Ticketmaster transacted volume, as you noted, is up 3 percent while our concert tickets are up 10 percent. So if you look at the numbers, our concert tickets are up around 6 million. The TM transacted tickets, which is everything at the high end of all of our tickets to at the lower end, family shows and other lower price things, up 3 percent, but off of roughly almost double the base. So what you have is at this point in the year, strong growth in the Live Nation concerts that Ticketmaster has been selling. You have a bit less activity in some of the other, whether they're promoters or some of the other activity in the Ticketmaster buildings. But we're still very early in the Ticketmaster scheme. It's about 100 million tickets. We ended up the year last year at about 330 million tickets. We expect to see growth off of that. So we're at a pretty early point for the Ticketmaster volume as opposed to somewhat further along on the Live Nation side. So I think it's a bit early to read too much into that number. Then in terms of the deferred, I think the on-sale timing this year was slightly different than what we saw last year. This year, because we had such a strong stadium lineup, that really owned the fourth quarter in terms of the majority of the on-sales. So that drove growth. But we didn't have as early of on-sales on the arenas and the amputators as we had last year, because we didn't have the stadium volume at the end of 23. We saw some earlier on-sales on the arena and amphitheater side. So that's in effect why you got the double-digit level of deferred growth at that point.

Great. And then, Michael, you talked a lot about the strong demand for stadium shows. Yeah, in answering Stephen's question, but just optically, I look at some of these shows and I see a lot of high-priced tickets still on sale for high-profile shows. Do you think ticket pricing is getting ahead of itself or is there some other explanation for that? And how should we expect Apple's to Apple's ticket prices to grow this year? So stadium versus stadium.

Yeah, I think you're seeing, you know, the artists in general, every cycle is a little more educated on what's the best way to price Mike's ticket. How do I keep it accessible to my fans but make sure scalpers don't run away with the front of the house? So we love seeing these stadiums sitting somewhere about 95 percent sold out right now. You know, the instantly sold out at 10 a.m. means we've transferred a lot of wealth to the scalpers. If you see any of those tickets, any tickets you're talking about are going to be the high-end tickets sitting on the market. Those will flush out between now and show date. So we think these artists on their stadium pricing are priced at almost perfection. They were selling at a very high price, and so we were able to see this, you know, in the early 90s, early 80s when there were strong, strong demand. They also added more venues, which we love, so they're helping consumers get to more shows at a good price, but also making sure that this price is closer to market, which means you'll have a few high-end tickets sit around the rim until we get closer to show date. So that's the perfect on sale and land the plane on show date model.

So would it be silly to partially think about it as you're taking away from secondary ticketers or ticket platforms and that's moving more to primary now? Yes,

for sure. I think the artists, over years, we've been saying this for years, every tour is looking at that P1 and making sure that if their fans are going to buy it, they would rather buy it from them direct on show date than the other artists. And then two days later from a secondary site, ours included. So yes, artists are going to figure out how to keep pricing the P1s a little more aggressively, price the bottom back into the house lower, so we've got a great sell-through. Those artists you're talking about, any inventory you see, we could sell that out in a minute if we drop the price, right? So finding that right combination where you're making sure demand and supply kind of march along on the way to the show date versus the 10 a.m. buyer sale.

Thanks, Michael.

And the next question comes from the line of Cameron Manson-Perrone with Morgan Stanley. Please proceed with your question.

Thank you. First, I just want to say a thought to go out to you guys and everyone in the LA office after everything that's happened this year. Pretty tough folks, everyone's hanging in as well as can be expected. But Michael, one high-level question for you. As we frame the opportunities laid out for sustained double-digit AOI growth over the next few years, I'd love to hear your thoughts on whether you expect the drivers of that performance to evolve over that timeframe. Or whether it's really just down to executing against a similar playbook as what supported the growth that you delivered here in 2024. And then one for Joe. On the outlook for 900 mill cap ex in 2025, another big increase similar to what we saw in 2024. What would you say investors should take away from the decision to ramp that so healthily in terms of ROI you're seeing from that spend so far? Any help with framing the timing from kind of investment outflow to the returns showing up on the P&L would be helpful. Thanks.

I'll go back to your first question if I can remember it. But yeah, listen, we've been, you know, we love consistency over here. So if you've been following our stock and you've been to our investor days the last few years, we don't, we haven't deviated really from what we think our thesis of why the industry is a great industry. We think on a global basis we think live has a real global unlock and will be a, you know, high, high single double digit kind of industry for the next decade as we were, you know, we saw our Coldplay show in India, sell out largest single concert in history, 125,000 people. We saw those dates sell out instantly. So we've been talking a lot about the globalization of the consumer supply demand of the globalization untapped markets to grow still. So our model is the same. We're 100 offices in about 40 countries keep growing those offices growing our market share in those underdeveloped markets. And we will continue to follow that global trend of more consumers wanting to go to shows from Pittsburgh to the Philippines. So we think the industry is growing. We tend to grow better than the industry and be able to capture the revenue from our from our consumers walking in the door.

And Cameron, I think, in some regards, your second question is the same as your first question, right, which is, if our if our thesis is we're going to grow to 200 million fans of the next step and the different levers we have and venue side is a key piece of it, then certainly our capital deployment is going to mirror the delivery of that AY growth. So I think we should take from the fact that we're increasing our capital spend is we're continuing to see a lot of opportunities that have very attractive returns globally. Again, heavily focused internationally on the arena level, globally focused on these large theaters, both types of venues that can not just deliver attractive returns, but also move some reasonable volume of fans, expand our shows, grow the market. So that's the biggest takeaway I take from that. In terms of the timing, these projects are all different in terms of how long they take from shovel in the dirt through through growing it out. What we're trying to do and we gave you some pieces here is some understanding of when or what venues opening to how many millions of fans to give you some guide for how we're seeing the the impact roll in.

Got it helpful. Thank you

both. And the next question comes from the line of David Karnovsky with JP Morgan. Please proceed with your question.

Thank you. So just wondering music labels and DSPs have recently come to agreements that may allow for super premium tiers and wondering if you thought of, you know, potentially about the role of live music within some of these offerings. You know, maybe it was something like ticket access is there, you know, inventory that could be made available and could this be a potential sponsor opportunity.

Yeah, thanks, David. Yeah, you know, we currently. Our job is to use that inventory that we've acquired from the artist and maximize it to sponsorship. Currently, and we have a lot of pre sale programs in place with you've seen them all horizons and and city banks, etc. So, you know, our job is always to look at that show work with the artist and figure out is there is there ways to maximize that inventory to business to business as well as consumers. As far as the latest round Spotify and Apple and Amazon we've we've they've approached us all we've talked to them all. About ideas on if they if they wanted inventory. There's a cost to that and we would we would entertain and look at that option. It made sense for us in comparison to other options we have for that that that pre sale which is a, you know, it's a very valuable asset. The artist themselves tend to do their own deals. We do deals for the artists, but ultimately artist has control of it. And that artist's job is to maximize the revenue from it. They're not giving that away to anyone for free. So whether we partnered with them and found sponsors or we paid for it. It's valuable and wouldn't surprise me of course the labels are the distributors. If they're trying to add a $5 premium to a monthly subscription, and they don't have enough of their own inventory in terms of music or free songs. It's always the easy go to let's give them a pre sale access. The hard part about pre sale is just scaling it. Everybody wants to be on safe resale. And that's hard to scale. So we've been working with all three of them, trying to find a model that may work for us and them and assume they're talking to others also.

And then maybe just separate the DOJ antitrust nominee recently indicated some openness to settlements where effective remedies can be put into place. Just wondering kind of what room you see to advance discussions with the agency or relative to the prior administration. And then I don't know just separate to this. Are there any updates you can give on the trial in terms of timing or kind of notable dates to be aware of?

Yes, Joe, the trial process continues to move apace as it has targeting early next year for trial date. So question is, is over the course of this year, can you know, is there a path towards a resolution with the DOJ that that doesn't doesn't lead to the trial? We've said in the last administration, there was really no interest in any discussion on settlement. So we're hoping that this DOJ returns to a more traditional approach and is open because they don't own it in the same way to those discussions. But we haven't had any discussions yet. The person that you would discuss it with is not not been approved yet, not been appointed. So until that happens, there's nothing we can do. And we'll see how that plays out in the coming months. But nothing, nothing really substantively new.

And the next question comes from the line of Peter Sapina with Wolf Research. Please proceed with your question.

Hi, everybody. A question on venue nation capital. I'm wondering if the 2025 budget, which I think you detailed as being 200 or 300 million greater than 2024, is showing any change in the mix of US versus international and then a parallel question on the large arenas for the 15 to 20,000 seat segment. I'm wondering if those opportunities are coming any faster or slower than you imagined and whether your appetite to invest in that particular segment is shifted at all. Thank you.

I think we'll see. I was just going to jump on the second. The large opportunities on an international basis are coming consistently ongoing so continues to see that ramp up, we tend to be the first second phone call if you're a developer, thinking about building or have land and want to use that land or have a venue you want to sell so we see that pipeline growing and our appetite still remains very large to to expand in that platform.

And just on that on that same thread, Michael just answered the first question too, which is I think that in general, you'll see a trend towards more of the capital being deployed internationally because of the attractiveness and volume of those those arena opportunities.

Thank you.

And the next question comes from the line of Peter Henderson with Bank of America. Please proceed with your question.

Yes. Hi, everyone. So just just wondering, I mean, there's been some concerns over the softness of the US consumer, particularly in the low end recently, it doesn't sound like you guys are experiencing any of that. But coming back to sort of Brandon's question as well, are you seeing any, you know, trade down from more outflowing cohorts? And what are you seeing sort of from the more value conscious consumer? And just related to that, I'm wondering, you recently announced that there will not be a long pass program in 25. And I'm wondering if you give any color on sort of the size of that and, you know, why the decision was made to end that program and what other programs you're considering?

Yeah, I mean, overall, the demand we're seeing for the concert, and I assume the NFL has got the similar answer. We're seeing no pullback. It's still on a global basis. We're seeing strong demand. We're seeing it in small to big. So yes, the on stays are always going to have incredible demand. But if you look at my club business, we're going to do 30,000 club shows last in a year. Our club business is up 17 percent year over year. So that's kind of the simplest way to say, you know, bottom end on a Tuesday in Indianapolis, my business is doing better. Consumers are coming to the club to see the young bands. So we're seeing our festivals, which are on sale already. They're they're selling at record levels. So I'm seeing no pullback in any festivals from EDM to our country festival. You always as we always say, someone will write about, you know, one that gets canceled or a dog here and there. But generally, overall, Macroly, our festival business globally is stronger than ever. Our club and theater business is stronger than ever. And obviously, our stadium business is on fire. So whether it's geographical, whether it's venue type or whether it's festival, we're still seeing strong, strong consumer across the board in terms of buying tickets for the 25 season. As far as the law in pass, it's a very small program. And we put some new leadership in charge of venues this year. We expanded Jordan Zachary's role and put some some new thinking around how do we sell the summer amphitheater. I think our belief was we were discounting too much too early with some of the programs we had. So it was to pull back and relaunch, which we always do our annual concert week. It's kind of our big, if you want to call that our Amazon Prime Day, our concert weekend in later in the summer. Earlier in the spring, beginning of summer, that's kind of our big, big deal where we sell all of our volume that matters. So we're going to just consolidate around that bigger idea. And we're going to eliminate some of the smaller programs that we're selling, you know, small, small volume of tickets overall. Thanks.

And the next question comes from the line of Jason Bazinet with Citibank. Please proceed with your question.

I'm a big fan of the CapEx you're spending, so don't take this the wrong way. It's just a clarifying question. When I look historically, at Venue Nation, you would own, I don't know, less than 10 percent of the venues most released or operated or whatever. Is this CapEx really moving more overtly into outright ownership of these arenas? Is that what we're talking about? Or is it spending CapEx and then having the right to lease it at a lower rate or operate it?

A chunk of it is absolutely owning it. Every situation is different, but we're following your advice and trying to own more, go upstream. So if we're in a situation where we can own it dirt on up, we do. Sometimes we can't own the dirt. We'll own the building. We can't own the building. We'll do as much of the capital build out and minimize our lease. So you don't always have to take exactly what you want, but we're absolutely pushing it further upstream, if you will.

That's great. Thank you.

And the final question comes from the line of Cutgun Morale with Evercore ISI. Please proceed with your question.

Great. Thanks for taking the question. Another one on Venue Nation, you provided a lot of great color at the Investor Day on the midterm outlook. I know the impacts to the model gets a bit tricky because, as Joe mentioned, timelines vary greatly depending on how the shovel to dirt to growing the venue out process looks like. But it's an area where we get a lot of questions on. So I was hoping you could help us think about what the AOI impacts of Venue Nation maybe was in 2024 and a little bit more specifics around how you see that evolving in 2025 just given the growing venue base there. Thank you.

Yeah, we haven't really tried to break it out for you guys as a segment. First of all, part of it or a good chunk of it obviously comes from the sponsorship side. We've talked that there's a sponsorship is venue driven. So you've got a component over there. Then you've got the operating component, which is heavily driven by your beer and by your parking and so on. So we haven't really tried to fully model it and break it out that way for you, unfortunately. We try to use what we present at Liberty as the overall guideposts over a midterm basis, as you said, to then try to back in and say how are these pieces potentially going to roll out? How do they maintain the sort of growth profile over the next several years? And am I comfortable that I'm going to be able to do it? But we're not really in a place that we're going to break out and give you the standalone venue nation business model.

Worth a shot. Thanks, Joe.

And I'd like to pass the floor back over to Michael Rapinoe for any closing remarks.

Thank you, everybody. I look forward to talking about Q1 in May.

Ladies and gentlemen, that does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.