Live Nation Earnings: Consumer Demand for Live Events Remains Strong but Headline Risks Still Looms

Narrow-moat Live Nation LYV started off 2023 with a strong first quarter buoyed by all of the firm’s markets being open for the first time since the pandemic. Management continues to tout the strength of 2023 demand, with over 90 million tickets sold to date for shows, tracking 20% ahead of 2022 at the same point. Despite the relatively weak global ad market, over 80% of the planned sponsorship for 2023 is already booked. We are maintaining our fair value estimate of $105. While shares are trading at a discount, the headline risks for Live Nation remain high as the recent ticketing snafus and fee increases have bolstered the demand for increased regulatory oversight in the United States and other countries.

Revenue jumped 73% year over year to $3.1 billion with strong growth in all three segments. Ticketing revenue improved to $677 million versus $480 million last year. Consumer demand and Live Nation’s focus on ticket pricing helped to drive a 16% average price increase for primary market tickets. The average secondary ticket price remains more than double face value. Secondary market only accounts for a midteen percentage of the firm’s gross ticket volume. The segment benefited from increased demand from ancillary services like insurance and upgrades, which grew double digits. Despite the negative headlines, Ticketmaster has signed new clients accounting for 8 million net new tickets, 15% ahead of 2022.

Concerts revenue jumped 89% to $2.8 billion from $1.2 billion a year ago and was well ahead of the $1.3 billion generated in the same quarter of 2019. The number of events skyrocketed to 9,630 in the quarter versus over 6,700 a year ago and 8,068 in 2019. Deferred revenue at the end of the quarter reached $5.1 billion, up sharply from $3.1 billion at the end of 2022, implying strong concert revenue growth for the remainder of 2023 and into 2024.