Live Nation Entertainment, Inc. (NYSE:LYV) Q3 2023 Earnings Call Transcript

Live Nation Entertainment, Inc. (NYSE:LYV) Q3 2023 Earnings Call Transcript November 2, 2023

Live Nation Entertainment, Inc. beats earnings expectations. Reported EPS is $1.78, expectations were $1.27.

Operator: 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 Third Quarter 2023 Earnings Call. And I would now like to turn the call over to Amy Yong, Head of Investor Relations. You may begin your conference.

Amy Yong: Good afternoon. And welcome to the Live Nation third quarter 2023 earnings conference call. Joining us today is our President and CEO, Michael Rapino; and our President and CFO, Joe Berchtold. We will start with prepared remarks from Michael and then we will take your questions. Before we begin, 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, new developments and similar matters. Please refer to Live Nation’s SEC filings, including the risk factors and cautionary statements included in our most recent filings on Forms 10-K, 10-Q and 8-K for a 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 have provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in the earnings release or website supplement, which also contains other financial or statistical information to be discussed on this call. The release reconciliation and website supplement can be found under the Financial Information section on Live Nation’s website. And with that, I will now turn it over to our President and CEO, Michael Rapino.

Michael Rapino: Thank you for joining us. As you can see from our results, the structural tailwinds behind our business are accelerating faster than ever and as a fan demand truly globalizes and artist were able throw more broadly than ever, this is still in an unprecedented global desire for concerts. This is happening at all levels with both casual and diehard fans and from small clubs to massive stadium events. We will start the conversation today in the next week a deeper into our results how these trends are setting up the industry for ongoing growth. Joe, anything to add.

Joe Berchtold: Thanks, Michael, and good afternoon, everyone. Only thing for me to add is that given the investor presentations next week we’ll keep today’s call more brief than usual. So, with that, I will — I think, we’re ready to take questions. Operator?

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Q&A Session

Operator: Thank you. [Operator Instructions] And the first question comes from the line of Brandon Ross with LightShed Partners. Please proceed with your question.

Brandon Ross: Hey. Thanks. Just to start-off, since you guys last reported there’s been at least two major articles on the DOJ investigation into your company, as well as some movements in both the legislative and executive branches and industry-wide regulation. Can you just give us an update on what you know about the Justice investigation and then separately, the potential impact of the proposed Congressional legislation? Then I have a follow-up.

Joe Berchtold: Sure. Thanks, Brandon. I’ll start first of all just on the legislative, which I think is pretty straightforward. Right now there is an all-in pricing bill by Senators Cantwell and Cruz under consideration. We are fully supportive of there’s a BOTS Act that Senator Blackburn introduced, I mean, you call main, which we’re also fully supportive of, and in general, everything we’re hearing legislatively are things that I think are pretty consistent with what we outlined in the FAIR Ticketing Act and things that we would definitely be supportive of. On the DOJ and the article that came out yesterday. I think, not surprisingly, it’s our impression that the DOJ is taking at least the first level look at almost everything that our competitors complain about and from there they look further at some issues and not others and if they tell us they have a problem with something we talked to them about it.

But, let me emphasize this, as far as we can tell nobody thinks that the fundamentals that drive our promotions business are unlawful. We pay top dollar to artists and provide them with top-notch tour support and those are good things. I think the article also seems to reinforce that the investigations looking at specific business practices versus our overall business model, which as I’ve said previously, is my impression-based on what I’ve heard. On the specifics, I mean, recall on the agencies getting document retention letters. I think generally anyone the DOJ’s six documents from gets the cover letter like this saying they should retain documents related to the investigation. So all this tells us is they think the agencies have relevant information, which seems pretty obvious given the topics that are being discussed and competitors complain about.

Finally, we obviously find it interesting, as I think, you tweeted that the timing of this always seems to come up at earnings. We don’t think there’s any real news right now. Concerning the investigation, we’re completing our document production that they’ve asked for. We haven’t even started depositions and our impression is that the investigation is kind of in its mid-stages at this point. And yeah, we have another new story on the day before earnings which we don’t seem to think a coincidence.

Brandon Ross: Okay. And getting to the business, your forward-looking metrics and especially the Q3 ticketing results point to real continued strength for your business. But there’s a lot of trepidation now about consumer weakness, especially after some weak guidance from others in the experienced economy. I know Bookings just said, some negative things just now. Is there anything in real-time that you’re seeing at all to suggest fall-off in trends at Ticketmaster. I know like the arenas of the world will continue to sell, but are the Tuesday’s in Pittsburgh still holding up and like really especially for Ticketmaster, as you look forward?

Joe Berchtold: Sure. We’re seeing no issues. Let me give you that in the two piece. I think you asked about, first of all, Q3 and then call it October. So Q3 was very strong volume quarter. So it was really driven by ticket volume $90 million fee-bearing tickets that we sold in the quarter, which –and the growth came from both North America and internationally. So we’re seeing that the demand consistent globally. 90% of the growth came from Concerts, which again tells you that the fans are looking to go to the Concerts. The one thing, I would note on Q3 is just a reminder, the last year, we had an unusual concentration of client renewal expenses, which are normally spread out over the second half, but largely came together last year.