Live Nation revenues fell 84% in 2020, as company slashed costs by $950m

Live Nation Entertainment survived through the worst year in its history in 2020 – and remains optimistic for its prospects in 2021, as Covid-19 restrictions begin to lift in major markets.

According to its newly-published fiscal results, Live Nation posted $1.86 billion in revenue last year, down by 84% on the equivalent figure from 2019.

Its concerts business saw annual revenues tumble by nearly $8 billion, down to $1.47 billion, in 2020.

Yet Michael Rapino, President and CEO of Live Nation, is looking forward rather than back.

He told Live Nation investors today (February 25) in a new shareholder letter: “As we look back on 2020, it is clearly not the year anyone predicted, but I am very proud of how Live Nation has dug in and focused on turning this challenge into an opportunity to improve our business. I want to take a moment to thank our employees for their resilience and creativity, and acknowledge all of those affected by Covid and the shutdown of live events.”

According to Live Nation’s fiscal filings with the SEC, Live Nation employed 10,500 full-time employees at the close of 2019. By the end of 2020, this figure had tumbled by 2,300 to 8,200 – a number which includes furloughed staff. That’s a fall of more than 2,000 employees in a year.

This all formed part of severe cost-cutting at Live Nation in 2020. According to the firm’s filings, Live Nation cut $950 million from its projected spending in 2020, which went significantly further than its initial plan of $500m in annual cost-cutting, announced by Michael Rapino in May last year.

Added Rapino in his new letter to shareholders: “Over the last year, leaders across all our business lines of Concerts, Ticketing and Sponsorship have been analyzing ways to improve their businesses. Some of our key initiatives include: Re-organizing to become more nimble while also reducing our cost structure by $200 million; Building concert streaming and direct to consumer businesses to expand our revenue streams; Advancing our technology initiatives globally while accelerating the shift to digital tickets to meet changing needs of fans, venues and artists; and reinforcing our balance sheet to endure this period, while maintaining a strong position to build our business for the future and act on opportunities as we identify them, such as our recent acquisition of the streaming platform Veeps and a continued pipeline of bolt-on acquisitions throughout the globe.

“So while this past year has been challenging for the company, our employees, fans, artists and so many others globally impacted by Covid, I have never been more excited about the opportunities in front of us.”

He added: “We continue to have a substantial tailwind in the live event industry, as consumers more than ever are looking to spend on experiences. The supply-demand fundamentals of the concerts business remain strong, with artists ready to get back on the road and fans eager to reconnect at events. All our data continues to show that there is substantial pent-up demand for concerts on the consumer demand side.

“The $2.4 trillion projected surplus in savings in the U.S. alone by June is a key indicator of consumer spending potential. At the same time, surveys demonstrate the high demand for concerts globally, with 95% of fans likely to attend a show when restrictions are lifted. This is proving out in fan behavior as well, with 83% of fans continuing to hold onto their tickets for rescheduled shows.”

Live Nation told shareholders today that at the end of the fourth quarter of 2020, it had total cash and cash equivalents of $2.5 billion, including $643 million of free cash.

The company added: “This free cash, along with $962 million of available debt capacity and taking into account the additional $417 million of net cash added to the balance sheet with the debt raise in early January, gives the company $2.0 billion of available liquidity. The company believes this level of liquidity provides it with the ability to fund operations until the expected return of concerts in the summer of 2021, preceded by ticket sales earlier in the year.”Music Business Worldwide