It’s ‘business as usual’ at Live Nation despite DoJ antitrust lawsuit, and 3 other things we learned on the company’s Q2 earnings call

After months of news reports and rumors predicting that the US would file an antitrust lawsuit against Live Nation and its subsidiary Ticketmaster, the Department of Justice lowered the boom in April.

The DoJ alleged that the company engaged in “monopolization and other unlawful conduct that thwarts competition in markets across the live entertainment industry.”

The DoJ asked a federal court in New York to order the break-up of the company to “restore competition in the live concert industry, provide better choices at lower prices for fans, and open venue doors for working musicians and other performance artists.”

In the wake of the lawsuit, Live Nation argued that the notion it’s a monopoly is “absurd,” given its low net profit margins, which don’t look much like the profit margins one would expect a monopoly to pull off.

Furthermore, Live Nation argued, the case is politically motivated, and has little legal ground to stand on: The DoJ had agreed to the merger back in 2010, with conditions, and came to another agreement with Live Nation in 2019 over the company’s alleged monopolistic practices. So why the change in approach now?

Even before the lawsuit was filed, Live Nation long argued that it doesn’t set the ticket prices in the market: That power belongs to the artists, sports teams and other performers on whose behalf Ticketmaster sells tickets.

Nonetheless, the lawsuit was widely expected, and as it rolls on, Live Nation’s leadership team says it isn’t affecting the company’s operations or its (ambitious) plans for the future.

“If you’re… in my legal department, you’re working on the DoJ [lawsuit]. If you’re running any one of my divisions, it’s business as usual,” CEO Michael Rapino said on the company’s earnings call on Tuesday (July 30).

Rapino said he’s focused on Venue Nation, the company division that’s acquiring and building out live event infrastructure around the world, noting that Venue Nation has 15 new venues scheduled to roll out worldwide over the next year.

“We think there’s still a great, great white space on a global venue basis,” he said. “And [in ticketing], I think you saw last week, we expanded ticketing in South Africa and have a few more of those on an international basis. So lots of opportunities still ahead of us, and [it’s] business as usual in the divisions.”

“If you’re… in my legal department, you’re working on the DoJ [lawsuit]. If you’re running any one of my divisions, it’s business as usual.”

Michael Rapino, Live Nation

Live Nation reported a record $6.02 billion in revenue for Q2 2024, an increase of 7% YoY.

Revenue from concerts jumped 8% YoY, to $4.99 billion, while the ticketing segment (i.e. Ticketmaster) saw revenues rise 3% YoY, to $730.7 million. Revenue from sponsorships and advertising also grew 3% YoY, to $312.2 million.

Some 39 million fans attended Live Nation shows, up 5% YoY, while Ticketmaster sold some 78 million fee-bearing tickets, roughly in line with the year-ago quarter.

Net income attributable to shareholders in rose slightly in Q2, to $298 million, or $1.03 per diluted share.

Here are four other things we learned on Live Nation’s latest earnings call.

1) Live Nation doesn’t see any increase in event cancellations

There’s been some talk of late about what seems to have been a spike in tour cancellations, spurred in particular by the high-profile cancellations of tours by Jennifer Lopez and The Black Keys. (The Keys’ tour cancellation may have had something to do with the band parting ways with its managers, Irving Azoff and Steve Moir.)

The talk about cancellations was enough to prompt an article in the New York Times asking if big music tours may be in trouble. But in Live Nation’s view, this is all talk, and nothing out of the ordinary is happening.

Live Nation is seeing cancellation rates that are lower than they were last year, President and CFO Joe Berchtold told analysts on the earnings call.

“I think most of the reports that we’ve seen have been efforts to take one or two data points out of a very large number of tours and shows, and we’re just not seeing anything unusual there,” Berchtold said.

Historically, Live Nation has seen 4% or 5% of shows canceled in advance, affecting about 1.5% of fans, and today’s numbers are “absolutely in line with historical trends,” Berchtold said.

But that doesn’t mean live stadium shows are breaking records this year. Live Nation had signaled on previous earnings calls that 2024 would see something of a slump in the largest venues, even as smaller venues like amphitheaters pick up steam, and in its Q2 earnings, Live Nation referred to “reduced stadium activity.”

However, that has much to do with the fact that last year was absolutely epic for stadium concerts, with tours from Taylor Swift, Bruce Springsteen, Beyonce, Drake and others breaking records. It would have been hard, under any circumstances, to top a year like that.

On the earnings call, Rapino and Berchtold predicted that Live Nation’s earnings would show a significant pick-up in stadium sales in Q4 of this year, as advance ticket sales pick up for 2025, a year they say will see renewed strength on the stadium side of the business.

2) Weakness in the international segment is about Live Nation’s dependence on stadiums outside North America (and the Paris Olympics are partly to blame)

If there was one area of weakness in Live Nation’s Q2 numbers, it was in the international concerts segment, which recorded a 15.6% YoY drop in fans, to an estimated 15.7 million, from 18.6 million the year before.

By comparison, the North American segment saw a 25.5% increase in fans, to 23.2 million from 18.5 million.

But that doesn’t mean live events are slumping outside North America – rather, it has to do with the fact that Live Nation’s international expansion has been focused on stadiums – the exact part of the market that has seen weakness this year.

“I think it really is venue type driven, it’s not so much geographic driven,” Berchtold said on the earnings call.

“It’s very consistent with what we’ve been saying for the past year. This was not going to be a big stadium year. You’re seeing that play out in terms of lower stadium shows, lower fan count. That impacts our international number.”

“This was not going to be a big stadium year. You’re seeing that play out in terms of lower stadium shows, lower fan count. That impacts our international number.”

Joe Berchtold, Live Nation

Nonetheless, some of that slump does seem to have been driven by geography – specifically by Paris, which is currently hosting the Olympics. That event led to shutdowns of venues in June, the last month of Live Nation’s second quarter.

“Most of France shut down for that month, and most of that affected a lot of the stadium business for the summer,” Rapino said.

Nonetheless, even if the number of fans outside North America is down, revenue from them isn’t. Live Nation’s international concerts division clocked a 13.5% YoY increase in revenue, to $4.69 million in Q2 from $4.13 million a year earlier.

3) There’s no post-post-Covid pullback in live event demand

There’s a theory out there – or at least an expectation – that the spike seen in live event attendance over the past few years or so was the result of pent-up demand that built during the Covid pandemic shutdowns.

And, the theory goes, now that this post-Covid pent-up demand has been satisfied, we can expect a pullback in the post-post-Covid era.

Live Nation’s leadership team rejects this idea, and says there’s no evidence of a pullback – just evidence that growth levels have returned to more normal levels.

“We never predicted that the industry was going to grow at 30% a year going forward,” Rapino said.

“We always wanted to restate that, regardless of some of the Covid pent-up demand, or some of the shows that got moved around… the basics [are] still sound.”

“We never predicted that the industry was going to grow at 30% a year going forward.”

Michael Rapino, Live Nation

Rapino said he expects to see growth at 9% or 10% in the years ahead.

“We have long said this is a supply-driven business,” Berchtold added. “The demand is there. Notwithstanding the fact we have a lot fewer stadiums this year, we’re actually still growing our show count. We’re still growing our fan count.”

He pointed to the globalization of the music industry – the increasing popularity of genres such as Afrobeats, Latin music, K-pop, and even country – as what’s driving the music industry, more so than any post-Covid bounce.

“What we’re seeing is an acceleration of the continued globalization on the demand side, the artists seeing that they can go everywhere in the world,” he said.

“We’ll have some shifts in terms of venue types and exactly which markets have which level of activity, but there’s nothing that would suggest that we’re really deviating from historical trajectories on the ongoing growth of the business.”Music Business Worldwide