On the promoter shift, it is a — it’s always the — it’s a three-level shift, right? It’s a local promoter or a national promoter and a global promoter. Still lots of great local promoters, why we have 100 offices in 40 countries. Contracts still have to be executed local. So, you have to make sure you have the best local staff in market that can execute at scale on an ongoing basis. Artists have absolutely evolved over the last 10 years, much like they probably have one global record label and one global agent and one global publishing company, as touring became their most important category and expensive. These artists are putting on — I was at the Drake show last night. I mean, he’s — it’s an incredible show, he’s carrying to those fans at a huge cost to give back.
So, the artists are — over the last 10 years have started to look for a much more national or global partner, whether it’s us, AEG, CTS in Europe, because their needs have changed. They needed upfront capital. They needed organizations that have a wider view on data, marketing, sponsorship, ways to help them think about their global business. Do they go to Japan or not? Do they do Hong Kong before or after? Do we do Pacific Rim? What’s the shipping costs? How do we get it all there? So, artists have become globalized brands and artist — with the consumers, we’ve talked about. So, absolutely every artist — the younger the manager and the younger the artist, the more global they’re looking for. So, if you’re kind of the new manager managing a superstar that’s popped on a global basis, you absolutely want to sit down with someone and talk about your global touring plans and when do you go where before — with one common agenda in mind.
So, we’re seeing that continual shift and I think you’ll just see that continue to move over the next five years.
Cameron Mansson-Perrone: Interesting. Thanks.
Operator: And the next question comes from the line of Jason Bazinet with Citibank. Please proceed with your question.
Jason Bazinet: I just had a quick question on CapEx. You guys have been so consistent with this sort of 2%, 2.5% of revenues on CapEx. Given what’s happening in your business and the high returns on invested capital we can see from the outside, why doesn’t it make sense to sort of open up the envelope and spend a bit more?
Michael Rapino: Love this question. I think, as Joe and I talked about, coming out of COVID, the prior to last three years was obviously build back up that cash bank. We drained a lot during COVID, so we wanted to get the balance sheet strong again, get our staff, get everyone back in place, hire the skills we needed and plot through our real kind of five to 10-year strategy here. So, we think the way we’re producing our AOI to cash flow return now, it’s given us all the tools we need to deliver this ambitious growth plan that we laid out at our Investor Day. So, you’ll see us move up and down depending if there is a big opportunity, but we’ve been pretty consistent that we can deliver our growth that we’ve outlined for you with that current number.
Joe Berchtold: And I think the market just accepts it more if we demonstrate it and then do it a bit more. As you said, we’ve been demonstrating that return on the invested capital. As we continue, we spend a bit more. We demonstrate those returns. The market will let us spend a bit more. The market doesn’t tend to want you to take big leaps and big turns. So, we’re not doing that. We’re just steadily building a pipeline. And as the market sees the demonstrated returns, then you earn the right to continue to do more of it.
Jason Bazinet: Looking forward to the number being 3% or 3.5% of risk. Thanks.
Operator: And the next question comes from the line of Ashton Welles with Evercore ISI. Please proceed with your question.
Ashton Welles: Thank you for the question. It would be great to get an update on the real-time indicators you guys are seeing on the consumer front, whether that’s the performance of on-sales or how shows are closing or on-site spending.
Michael Rapino: I’ll start and then Joe can jump in. I mean, I see the ticket sale on my daily ticket sale counts. We just went on sale, jeez, within the last week on Usher, Justin Timberlake, Jennifer Lopez, just announced Jelly Roll this morning. These shows are flying out the door from top to bottom. So yeah, we’re seeing no slowdown on the consumer from — I was in Columbus, Ohio for a sold-out Drake show last night. We had two nights in a row sold out, incredible high-merch numbers. They were buying all the sweatshirts and onsite the GM told me they were — we’re doing really strong numbers. So, we’re seeing at our current business, they’re buying and showing up across the country and across the globe right now.
Joe Berchtold: And we’re seeing most of these on-sales still selling front-to-back, meaning most expensive tickets to least. So, we’re seeing strong demand at all price points. We just went on sale with our lawn passes for our amphitheaters, up double digits in sale on that for the price-conscious fan. So that’s going well. Shows are closing. We really have the best per-cap on-site spending right now at our theaters and clubs, just given that its Q1, those numbers continue to be strong and show year-on-year growth. So, all fronts are showing strong consumer demand globally.
Ashton Welles: Thank you.
Operator: And the next question comes from the line of David Katz with Jefferies. Please proceed with your question.
David Katz: Hello, everyone. Thanks for taking my question. When we think about the different business lines, how would we think about the trajectory or arc of growth in Sponsorship relative to Concerts? And what I am essentially getting at is whether there is an acceleration of growth in sponsorship and advertising that is begotten from this outperformance and this — this acceleration that you’re seeing in — on the concert side of things later on?
