Live Nation’s Michael Rapino attributes huge gains in 2017 to “tremendous power of live events”, predicts greater growth through 2018

Live Nation Entertainment’s president and chief executive Michael Rapino has definite ideas on what caused the global tour promoter to post 2017 as its best year on record.

For the 12 months, revenues were up 25% year-on-year to US$10.4 billion.

According to the report, all of its divisions showed significant growth.

The concert division was up 26% to $7.9 billion.

Sponsorships grew 18% to $445.1 million.

Ticketing revenue had an uptick of 17% to $2.1 billion.

Through 2017, Live Nation produced 30,000 shows in 40 countries to 86 million fans and invested $5.6 billion in promoting concerts.

The rise of ticket prices by 5% translated into an extra $250 million for the company.

It noted that average spending by fans was now $24 per person, a 9% rise from 2016.

As of December. 31, the company had $1.8 billion in cash and $3.2 billion in total assets.

In an earnings call after the release of the financials, Rapino highlighted the factors which caused Live Nation’s seventh consecutive year in revenue growth.

“We continue to see the tremendous power of live events with strong consumer demand and robust supply of new and established artists hitting the road from clubs to stadiums,” he said.

“Live is truly a unique entertainment form that cannot be duplicated and creates a lifetime memories that fans are craving for more than ever in this experienced economy.

“We believe the live business will continue to have strong growth for years to come as fans globally drive demand, artists are touring more, and sponsorship and ticketing benefit from the concerts flywheel.

“Live Nation continued to grow its global market share in 2017, adding 15 million fans globally for a total of almost 86 million fans, driving concerts revenue up 26% and AOI up 24%.

“Across all of the artists we work with, we invested $5.6 billion to promote 30,000 shows in 40 countries, with Live Nation by far the largest financial supporter of artists in music.

“Fans, more than ever, find the live experience from club shows to arenas to festivals, a top entertainment choice and the best way to celebrate their favourite artists and share the experience with other fans.

“In the US alone, over the past 10 years consumer spending on experiences has grown $5 billion per year, and we believe this ongoing trend will continue driving a structural increase in demand for concerts globally.”

Operating income in 2017 was down 53% year over year to $91.4 million and its adjusted operating of $625 million down about 2%.

Live Nation’s Ticketmaster platform conducted transactions worth $30 billion in the 12 months, with 500 million tickets sold in 29 countries.

Its fee-bearing Gross Transaction Value (GTV) was estimated to have jumped 15%.

Ticketmaster’s fourth quarter was described by Live Nation as “our top quarter ever, selling over 50 million fee-bearing tickets which delivered over $4.5 billion in GTV.”

Rapino says that Ticketmaster’s performance will see a shift in its priorities.

"Music has accounted for about 80% of Ticketmaster’s GTV growth in recent years, making it imperative for us to extend our focus from venues to those artists who are filling the venues," he commented.

According to his estimates, Ticketmaster’s Verified Fan platform was adopted by 80 artists and sold 3 million tickets.

Its secondary site was up 25% in volume, with an estimated 5% rise in ticket sales in the first two months of 2018.

For the fourth quarter, Live Nation saw losses escalate to $202 million –  over five times the same quarter in 2016.