Live Nation Entertainment, Inc. today released financial results for the quarter ended December 31, 2020. The company’s concert revenue plummeted to $ 1.46 billion in 2020, from $ 9.43 billion the previous year, and tickets fell to US $ 188.4 million, from $ 1.54 billion in the same period, and sponsorship and advertising dropped to $ 203.7 million from $ 590.3 million. Live Nation ended 2020 with $ 1.86 billion in revenue, 84% below the previous year, with a 92% drop in revenue in the fourth quarter.
Live Nation CEO Michael Rapino said in a statement: “In the past year, leaders in all of our show, ticket and sponsorship business lines have been looking at ways to improve their business. Some of our main initiatives include: reorganizing to become more agile and at the same time reducing our cost structure by $ 200 million; creating live streaming and targeting consumer companies to expand our revenue streams; advancing our technology initiatives globally while accelerating the shift to digital tickets to meet the needs of constant change of fans, venues and artists, and reinforces our balance sheet to last during this period, maintaining a strong position to build our business for the future and seize opportunities as we identify them, such as our recent acquisition of the streaming platform Veeps and a continuous flow of complementary acquisitions worldwide.
“So while the past year has been a challenge for the company, our employees, fans, artists and so many others globally impacted by COVID, I have never been more excited about the opportunities before us.
“We continue to have a substantial favorable wind in the live events industry, as consumers are more than ever looking to spend on experiences. The fundamentals of supply and demand in the concert business remain strong, with artists ready to get back on the road and fans eager to reconnect at events. All of our data continues to show that there is substantial pent-up demand for shows on the consumer demand side. The projected US $ 2.4 trillion surplus in the US economy through June is an indicator key to consumer spending potential. At the same time, research demonstrates the high demand for shows around the world, with 95% of fans likely attending a show when restrictions are lifted. This is also showing up in fan behavior, with 83% of fans continuing to keep their concert tickets rescheduled.
“On the artist’s side, there is a great desire to get back on stage – to connect with his fans and provide economic support to his bands, crew and hundreds of other employees every night to do the show. Given the limited tour activity in 2020 and 2021, the pipeline for 2022 is much stronger than normal, with almost twice as many artists on tour in 2022 than in a normal year – about 45 artists versus the usual 25. And there is still plenty of programming available in arenas, amphitheaters and stadiums to accommodate these additional tours, with more than two thirds of the nights at these locations not used for sporting events or major shows in a typical year.
“It seems that the moment of releasing suppressed supply and demand is approaching. Vaccine delivery is accelerating and the decline in Covid cases around the world gives us even more confidence that a safe and meaningful return to programs soon it will be possible.For both the US and the UK, projections indicate that anyone wishing to be vaccinated will be able to do so in May or June, with Europe and most other markets following a few months later. enormous social and economic impact that the blockade had on the public, we believe that there will be a strong impulse to reopen society quickly as soon as vaccines are readily available, and we believe that outdoor activities will be the first to happen.
“So while the time for our return to life continues to vary across global markets, all signs indicate that it will start safely in many countries sometime this summer and will expand further from there.”
At the end of the fourth quarter of 2020, Live Nation had total cash and cash equivalents of $ 2.5 billion, which includes $ 643 million of free cash. This free cash, together with $ 962 million of available debt capacity and taking into account the additional $ 417 million of net cash on the balance sheet with the debt increase in early January, gives the company $ 2.0 billion of available liquidity . The company believes that this level of liquidity gives it the ability to finance operations until the expected return of the shows in the summer of 2021, preceded by ticket sales at the beginning of the year.
The global refund rate for company shows that are rescheduled and are in or have gone through a refund window is 17% by the end of the fourth quarter of 2020. Festivals generally cancel this year’s event, but for festivals where fans can keep their tickets for next year’s show, approximately 63% of fans keep the tickets.
In concerts and festivals, since March the company has reimbursed $ 282 million for rebooking Live Nation shows and $ 842 million for canceled Live Nation shows. Of this total of US $ 1.1 billion, US $ 460 million came from funds maintained by third party locations and US $ 663 million came from Live Nationfunds held.
The company still has some programs in the process of rescheduling, or that are rescheduled, but do not yet offer refunds. In addition, refunds may occur in the future for additional cancellations or rescheduled events resulting from the global closure of our live events. Based on estimated current and future impacted events and fan behavior, Live Nation recorded $ 102 million in additional refunds from fans of Live Nationfunds held. As a result, the company reclassified these deferred revenue funds to ticket reimbursements accrued from the fourth quarter of 2020.
The company’s deferred revenue for events over the next 12 months was $ 1.5 billion on December 31, 2020, compared to $ 1.4 billion on September 30, 2020. This increase was due to ticket sales for future events, sales for events scheduled for the fourth quarter of 2021 change from long-term deferred revenue to the current one, as well as exchange rate impacts on Live Nationinternational deferred revenue balances.