Any Concern Over Tour Cancellations? What You Should Know About Live Nation’s Q2 Earnings Call
Consumers are strained by everything from high food prices to soaring rents and mortgage costs — but aren’t giving up live music.
Two years after the concert industry roared back to life in the wake of the COVID pandemic, Live Nation had another recording-setting second quarter. Revenue grew 7% to more than $6 billion while adjusted operating income (AOI) climbed 21% to $716 million. North America was particularly strong, as fan attendance climbed 17% and amphitheater attendance rose about 40%.
That followed a record first quarter in which Live Nation had revenue of $3.8 billion, up 21%, and AOI of $367 million. A notable hiccup during the second quarter was an antitrust lawsuit brought by the U.S. Department of Justice in May, although that hasn’t impacted operations and will take years to move through the courts.
During Tuesday’s earnings call, CEO Michael Rapino and president/CFO Joe Berchtold gave analysts and investors their thoughts on recent tour cancellations, expectations for the second half of 2024 and next year, and Live Nation’s long-term growth rate.
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Cancellations are “in line” with historical trends
Some recent high-profile tour cancellations and weaker-than-expected festival sales have some people wondering if the live music business bit off more than it could chew. Coachella ticket sales were slower than usual, as were those of JazzFest, Beach Life, Welcome to Rockville and Governors Ball. Live Nation had two high-profile tour cancellations in recent months: The Black Keys and Jennifer Lopez.
But Live Nation, the world’s largest promoter, isn’t seeing anything out of the ordinary, said Berchtold. Cancellation rates “historically run kind of 4%-5% of shows [and] about a percent and a half of fans,” he said, and this year’s cancellations are “[a]bsolutely in line with historical trends. 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.”
“Continued growth” in the second half of the 2024 and into 2025
Berchtold said Live Nation expects to see “continued growth” in fan attendance in the second half of the year. Year-to-date ticket sales to 2024 concerts are 118 million, according to Tuesday’s earnings release, higher than 2023. Sales for arenas, amphitheaters, theater and club shows are up double digits.
As for 2025, Live Nation expects more stadium shows than it had two years ago. This year, a slowdown in stadium shows was partly caused by the Paris Olympics causing “most of France to shut down” for a month, said Rapino. Amphitheater shows provide better margins and high per-fan spending, but more stadium shows means a surge in ticket sales in late 2024 from tour on-sales, and higher gross transaction values. “One stadium show is triple the band count and triple the average ticket price of an amphitheater show,” said Berchtold.
Pushing 10% growth over the long term
After surging in 2022 and 2023 from post-pandemic pent-up demand, Live Nation is settling into a steady, long-term growth rate of 9%-10% annually. The necessary trends are in place, said Rapino: the globalization of the market, the supply of artists, consumer demand, the fan experience and favorable economic factors. Just don’t expect the post-pandemic growth to continue. “We never predicted that the industry was going to grow at 30% a year going forward,” said Rapino.
