Live Nation Entertainment 10-Q 2024-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

For the quarterly period ended June 30, 2024

or

For the transition period from to

Commission File Number 001-32601

LIVE NATION ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

9348 Civic Center Drive

Beverly Hills, CA 90210

(Address of principal executive offices, including zip code)

(310) 867-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

On July 23, 2024, there were 232,113,741 outstanding shares of the registrant’s common stock, $0.01 par value per share, including 1,794,851 shares of unvested restricted stock awards and excluding 408,024 shares held in treasury.

LIVE NATION ENTERTAINMENT, INC.

INDEX TO FORM 10-Q

PART I—FINANCIAL INFORMATION

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

See Notes to Consolidated Financial Statements

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

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“Live Nation” (which may be referred to as the “Company,” “we,” “us” or “our”) means Live Nation Entertainment, Inc. and its subsidiaries, or one of our segments or subsidiaries, as the context requires. You should read the following discussion of our financial condition and results of operations together with the unaudited consolidated financial statements and notes to the financial statements included elsewhere in this quarterly report.

Special Note About Forward-Looking Statements

Certain statements contained in this quarterly report (or otherwise made by us or on our behalf from time to time in other reports, filings with the SEC, news releases, conferences, internet postings or otherwise) that are not statements of historical fact constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, notwithstanding that such statements are not specifically identified. Forward-looking statements include, but are not limited to, statements about our financial position, business strategy, competitive position, potential growth opportunities, potential operating performance improvements, the effects of competition, the effects of future legislation or regulations and plans and objectives of our management for future operations. We have based our forward-looking statements on our beliefs and assumptions considering the information available to us at the time the statements are made. Use of the words “may,” “should,” “continue,” “plan,” “potential,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “outlook,” “could,” “target,” “project,” “seek,” “predict,” or variations of such words and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those set forth below under Part II—Other Information—Item 1A.—Risk Factors, in Part I—Item IA.—Risk Factors of our 2023 Annual Report on Form 10-K as well as other factors described herein or in our annual, quarterly and other reports we file with the SEC (collectively, “cautionary statements”). Based upon changing conditions, should any risk or uncertainty that has already materialized, worsen in scope, impact or duration, or should one or more of the currently unrealized risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the applicable cautionary statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We do not intend to update these forward-looking statements, except as required by applicable law.

Executive Overview

For the third year in a row, our second quarter was a record for the Company with operating income and AOI both up 21% versus 2023. Compared to just five years ago, we have more than doubled our second quarter revenue, operating income and AOI results.

For the second quarter of 2024, our overall revenue increased by 7% to $6.0 billion on a reported basis as compared to the same period last year. On a constant currency basis, the growth was also 7%. The most significant growth came from our Concerts segment as a result of market expansion in the form of increased show count, fans, and onsite spend. Our operating income for the quarter increased by $79.4 million, or 21%, from $386.4 million in the second quarter of 2023 to $465.8 million in the second quarter of 2024 due to higher performance from all three of our major business segments, most notably our Concerts segment. The increase in operating income was $88 million, or 23%, at constant currency.

For the first six months of 2024, our consolidated revenue increased by $1.06 billion, or 12%, compared to the same period in 2023, from $8.76 billion to $9.82 billion. The increase was $1.1 billion, or 13%, on a constant currency basis. We had consolidated operating income of $429 million for the first six months of 2024, compared to $529 million for the first six months of 2023, a decrease of $100 million. Stronger operating performance in all three of our major business segments was offset by Astroworld estimated loss contingencies in our Concerts segment. Consolidated AOI for the first six months increased by $174 million, or 19%, compared to the same period in 2023, from $909 million to $1.1 billion. The increase was $193 million, or 21%, on a constant currency basis.

Based on our strong pipeline of arena, amphitheater and theater and club shows for the remainder of the year as well as ticket sales for 2024 shows pacing ahead of last year, we are optimistic for continued success in the remainder of the year even with reduced stadium activity relative to the prior year.

All of the segment financial comments to follow are based on reported foreign currency exchange rates.

Our Concerts segment revenue for the quarter increased by $354 million, or 8%, from $4.6 billion in the second quarter of 2023 to $5.0 billion in the second quarter of 2024. The revenue growth was partially the result of more shows and fans in North America. The number of events for the second quarter of 2024 was approximately 14,700 compared to approximately 12,300 in the second quarter of 2023, an increase of 2,400 events or 20%. The number of fans for the quarter was 38.9 million compared to 37.1 million last year, for growth of 1.8 million fans or 5%. The increase in activity was largely in the United States, powered by fan count at our owned or operated venues, excluding festivals, was up 18% for the quarter. Following the trend from the first quarter of 2024, arena activity was also very strong, with double digit growth globally, most notably in the United States and Latin America. Some of the major acts touring in the second quarter included Olivia Rodrigo, Bad Bunny, Metallica and Noah Kahan. Our larger festivals in the quarter included EDC Vegas, Bottlerock and Download in the United Kingdom. With amphitheater show count up by over 25% and activity in our owned or operated venues increasing, onsite spend in our amphitheaters increased by nearly 40%. As a result, Concerts operating income for the quarter improved by $37.1 million compared to the same period in 2023, from $78.5 million to $115.6 million. Meanwhile, Concerts AOI for the quarter was $271 million compared to $168 million in the second quarter of 2023, for growth of $103 million or 61%. Operating income margins increased from 1.7% in the second quarter of 2023 to 2.3% in the second quarter of 2024 while AOI margin for the second quarter of 2024 was 5.4% compared to 3.6% last year. On a year-to-date basis, Concerts margins are out-pacing 2019 which was our previous record year for margins.

For the first six months of 2024, Concerts revenue grew $952 million compared to the same period in 2023, from $6.9 billion to $7.9 billion. For the first six months of 2024, our Concerts fan count was nearly 62 million compared to 56 million compared to the same period in 2023, an improvement of 6 million fans or 10%. Onsite spending at our United States amphitheater shows for the first six months of 2024 is pacing ahead of full-year 2023 and on-track to deliver $2 more per fan for the season, driven by higher food and beverage spending. For our larger festivals, the onsite spend growth has been even stronger. With r

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Required information is within Part I — Financial Information—Item 2.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk.

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to our company, including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to other members of senior management and our board of directors.

Based on their evaluation as of June 30, 2024, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) are effective to ensure that (1) the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) the information we are required to disclose in such reports is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal controls will prevent all possible errors and fraud. Our disclosure controls and procedures are, however, designed to provide reasonable assurance of achieving their objectives, and our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective at that reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding our legal proceedings can be found in Part I—Financial Information—Item 1. Financial Statements—Note 6 – Commitments and Contingent Liabilities.

While we attempt to identify, manage and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. Part I—Item 1A.—Risk Factors of our 2023 Annual Report on Form 10-K filed with the SEC on February 22, 2024, describes some of the risks and uncertainties associated with our business which could materially and adversely affect our business, financial condition, cash flows and results of operations, and the trading price of our common stock could decline as a result. Except as set forth immediately below, we do not believe that there have been any material changes to the risk factors previously disclosed in our 2023 Annual Report on Form 10-K.

The U.S. Department of Justice and the attorneys general of certain states have sued us alleging violations of various federal and state laws pertaining to antitrust, competition, unlawful or unfair business practices, restraint of trade, and other causes of action. An unfavorable outcome in this matter could adversely affect our business and operating results.

As described in Part I—Financial Information—Item 1.—Financial Statements—Note 6 – Commitments and Contingent Liabilities, under the caption “Department of Justice Complaint,” in May 2024 we were sued by state and federal authorities for alleged violations of various laws pertaining to antitrust, competition, unlawful or unfair business practices, restraint of trade, and other causes of action, with various forms of relief requested for the alleged violations, including without limitation the divestiture of Ticketmaster by the Company, cancellation of certain ticketing contracts, enjoining the Company from engaging in anticompetitive practices, monetary damages, and other forms of relief. While this litigation is at its earliest states and we believe that we have substantial defenses in the matter, due to the nature of the allegations and the potential remedies being sought, an unfavorable outcome in this matter could have a material adverse impact on our business and operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchase of Equity Securities

The following table provides information regarding repurchases of our common stock during the three months ended June 30, 2024:

Item 3. Defaults Upon Senior Securities

None.

No director or officer adopted or terminated any Rule 10b5-1 plan, or any other written trading arrangement that meets the requirements of a “non-Rule 10b5-1 trading arrangement” during the three months ended June 30, 2024.

§ Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on July 30, 2024.