Live Nation: Still losing money, but not as much
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After a year of singing the blues in 2010, concert and ticketing giant Live Nation Entertainment Inc. had cause for a modest celebration, posting a 6% uptick in revenue and narrower losses in 2011 despite a tough global economy.
Propelled by strong sales of concerts from Jimmy Buffett, Van Halen, Roger Waters and others, the Beverly Hills company on Thursday said sales for the year that ended Dec. 31 were $5.38 billion, compared with $5.06 billion in 2010.
Meanwhile, its net loss narrowed to $83 million for 2011, from $228.4 million in 2010, as Live Nation de-emphasized its less profitable amphitheater concert venues and focused on its higher-margin arena events. As a result, ticket revenue largely represented by its Ticketmaster unit grew 14.5% last year, while the concert promotion business eked out a 2% gain in sales.
“The bottom line is that they’re still losing money, but not as much as they had before,” said Gary Bongiovanni, publisher of Pollstar, a trade publication that tracks the live event business.
Live Nation also shrugged off the loss of ticket sales from the NBA lockout last quarter, posting a 6% jump in ticketing revenue. That’s mostly because of strong presales of tickets for 2012 concerts, Live Nation Chief Executive Michael Rapino said in a call with Wall Street analysts.
For the fourth quarter that ended Dec. 31, overall revenue fell 4.2% to $1.19 billion, from $1.24 billion a year earlier. The company did not report a net income figure, saying only that operating losses narrowed to $66.7 million, down from $86.1 million in the fourth quarter of 2010.
Live Nation ended the year with $844 million in cash.
Looking ahead, Rapino said 2012 is shaping up to be a decent concert year, particularly for music festivals and with major acts such as Bruce Springsteen and Dave Matthews scheduled to hit the road. He predicted that attendance would see a “low single digit” percentage increase, though overall ticket revenue would be flat to slightly higher for the year.
Bongiovanni agreed that music festivals appear to be doing well, with events such as Coachella and Stagecoach sold out months before they are set to happen.
“The key this year is whether tickets will be priced right,” Bongiovanni said. Many of Madonna’s tickets, for example, are selling well above $300 apiece, he said. “She’s not meeting up with much price resistance, but that doesn’t mean others will be so lucky.”
-- Alex Pham