Live Nation Entertainment 10-Q 2024-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

For the quarterly period ended September 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 November 5, 2024, there were 232,353,685 outstanding shares of the registrant’s common stock, $0.01 par value per share, including 1,754,415 shares of unvested restricted stock awards and excluding 408,024 shares held in treasury.

LIVE NATION ENTERTAINMENT, INC.

INDEX TO FORM 10-Q

(1) Prior period financial statements were restated as further discussed in Part I — Financial Information—Item 1.—Financial Statements—Note 9 – Correction of Errors in Previously Reported Consolidated Financial Statements.

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 quarter of 2024, the Company’s operating income decreased by 2% and AOI was up 4% versus 2023. Revenues for the third quarter decreased by 6% to $7.7 billion on both a reported and constant currency basis as compared to the same period last year, due to the reduction in stadium show volume this year. Our operating income for the quarter decreased by $14 million, or 2%, from $654 million in the third quarter of 2023 to $640 million in the third quarter of 2024 due to our Ticketing segment from the reduction in stadium show volume partially offset by improved performance from our Concerts and Sponsorship business segments. The decrease in operating income was $10 million, or 2%, at constant currency.

For the first nine months of 2024, our consolidated revenue increased by $566 million, or 3%, compared to the same period in 2023, from $16.9 billion to $17.5 billion. The increase was $651 million, or 4%, on a constant currency basis. We had consolidated operating income of $1.1 billion for the first nine months of 2024, a decrease of $102 million compared to the first nine months of 2023. Despite stronger operating performance in our Concerts and Sponsorship segments, these positive results were negatively impacted by the Astroworld estimated loss contingencies as well as reduced revenue in our Ticketing segment. Consolidated AOI for the first nine months increased by $224 million, or 13%, compared to the same period in 2023, from $1.8 billion to $2.0 billion. The increase was $250 million, or 14%, on a constant currency basis.

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

Our Concerts segment revenue for the quarter decreased by $391 million, or 6%, from $7.0 billion in the third quarter of 2023 to $6.6 billion in the third quarter of 2024. The revenue reduction was the result of fewer stadium shows and fans this quarter. The total number of events for the third quarter of 2024 was approximately 12,800 compared to 12,100 in the third quarter of 2023, an increase of 700 events or 6%. The number of fans for the quarter was 50 million compared to 52 million last year, a reduction of 2 million fans or 4%. The decrease in activity largely resulted from the aforementioned change in stadium activity partially offset by more fans attending arena shows as well as theaters and clubs. We saw double digit arena fan growth globally this quarter, most notably in the United States. Some of the major acts touring in the third quarter of 2024 included Bruno Mars, Pink, Green Day, and Adele. Our larger festivals in the quarter included Rock in Rio, Lollapalooza Chicago, Rock Werchter in Belgium and Reading and Leads in the United Kingdom. Meanwhile, Concerts AOI for the quarter was $474

million compared to $341 million in the third quarter of 2023, for growth of $133 million or 39%. Operating income margins increased from 3.2% in the third quarter of 2023 to 4.5% in the third quarter of 2024 while AOI margin for the third quarter of 2024 was 7.2% compared to 4.9% last year.

For the first nine months of 2024, Concerts revenue grew $561 million compared to the same period in 2023, from $13.9 billion to $14.4 billion. For the first nine months of 2024, our Concerts fan count was nearly 112 million compared to 108 million for the same period in 2023, an increase of nearly 4 million fans or 3%. Fan growth has been driven by more activity in arenas, our owned and operated amphitheaters as well as more theater and club content. Onsite spending per fan at our United States amphitheater shows for same-store artists (those artists performing at least three amphitheater shows in either 2022 or 2023 compared to 2024) during the first nine months of 2024 is pacing ahead of full-year 2023 by 9%, driven by higher food and beverage and upsell spending. For our larger festivals, the onsite spend growth has continued as well. With roughly 85% of our festival events now played off, we have seen double-digit growth in per fan spend, driven largely by higher food and beverage and VIP sales. Concerts AOI for the first nine months increased by $238 million, or 47%, compared to the same period in 2023, from $505 million to $743 million. Operating income margins decreased from 1.5% for the first nine months of 2023 to 0.8% for the first nine months of 2024, which was impacted by the Astroworld estimated loss contingencies. AOI margin for the first nine months of 2024 was 5.1% compared to 3.6% last year.

Our Ticketing segment revenue for the quarter decreased by $144 million, or 17%, from $838 million in the third quarter of 2023 to $694 million in the third quart

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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 September 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. 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.

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 September 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 September 30, 2024.

On November 5, 2024, we amended our senior secured credit facility and entered into Amendment No. 12 (the “Amendment”) to our Credit Agreement, dated as of May 6, 2010 (as amended, restated, supplemented or modified prior to Amendment No. 12, the “Credit Agreement” and as amended by Amendment No. 12, the “Amended Credit Agreement”). The Amendment added a venue expansion revolving credit facility of $400 million, which resulted in a total available borrowing capacity of $1.7 billion.

The Amended Credit Agreement contains a financial covenant that requires the Company to maintain a maximum ratio of consolidated net debt to consolidated EBITDA (both as defined in the Amended Credit Agreement) that ranges from 6.75x to 5.25x, with the first step down of 0.50x occurring on March 31, 2026 and additional step downs of 0.50x occurring annually thereafter.

The new revolving credit facility matures on November 5, 2029, provided, that if (x) any of the term B loans, the Company’s 2027 senior secured notes, or the Company’s 2027 senior unsecured notes remain outstanding on the date that is ninety-one days prior to the stated maturity thereof in an aggregate principal amount in excess of $500.0 million and (y) the Company’s consolidated free cash on such date is less than the sum of such outstanding principal amount plus $500.0 million, then the maturity date of the new revolving credit facility will instead be such date.

§ 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 November 12, 2024.