Live Nation Ends 2022 Ahead of Prepandemic Levels

Live Nation LYV posted a strong end to an impressive 2022 that saw the firm exceed prepandemic levels in terms of events, fans, and fee-bearing tickets sold. Management remains very positive about 2023, disclosing that ticket sales are pacing 20% ahead of the same point in 2022. While inflation may damp demand from the marginal concertgoer, there are still several artists who delayed or canceled tours over the last few years that fans are looking forward to attending. We are maintaining our $105 fair value estimate. While the shares are trading at a discount, the headline risks for Live Nation remain as the political and fan blowback from the Taylor Swift presale debacle reinvigorated calls for increased regulatory oversight.

Revenue jumped 59% to $4.3 billion in the fourth quarter and was 44% ahead of the same quarter of 2019. Ticketing revenue improved to $651 million versus $489 million last year and $448 million in 2019. Consumer demand and Live Nation’s focus on ticketing pricing helped to drive a 17% average price increase for primary-market tickets. However, secondary-market pricing also increased 12% on average for the year, meaning that the average secondary ticket price remains more than double face value. Management continued to push back against some of the public outcry against ticketing practices. The firm’s attempts to change the discourse have seemingly had little impact, and we expect public sentiment to remain negative. While this attitude may cause some ticketing laws to change, we still believe that a regulatory breakup of the firm remains remote for now.

Concert revenue improved to $3.4 billion from $2.0 billion a year ago and was well ahead of the $2.2 billion in the fourth quarter of 2019. The number of events rocketed once again to 13,330 in the quarter versus over 9,000 a year ago and 13,500 in 2019. Deferred revenue at the end of 2022 hit $2.7 billion, up 125% from 2019 and 18% from 2021, implying strong concert revenue growth in 2023.