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Live Nation admits ticket sales flagging, share price follows suit
By CMU Editorial | Published on Friday 16 July 2010
Live entertainment giant Live Nation held a conference in New York yesterday to try to reassure investors about the company’s performance amid all those reports that have been circulating about the sorry state of the American mainstream live music market. As previously reported, there has been much speculation that the live sector’s ever expanding bubble has finally burst – in the US at least – as the recession and years of ticket price hikes combine to keep music fans at home.
It’s been widely reported that concerts by big name artists like Rihanna, The Jonas Brothers and Simon & Garfunkel have been cancelled, seemingly because of poor ticket sales. And American live industry trade mag Pollstar revealed this week that the country’s top hundred tours had brought in $196.8 million less in the first half of 2010 than during the equivalent period last year. Meanwhile some commentators have speculated that it is Live Nation in particular who have been hardest hit by the live music down turn.
At his company’s investor call yesterday, Live Nation chief Michael Rapino admitted that ticket sales for the firm’s top 100 bands were down 12% so far this year, and could drop by 15% for the whole year. He also admitted that media speculation about the “slumping” live sector might make some bankable artists nervous about touring this autumn, which could also hit the live music giant.
But Rapino, and his co-chief Irving Azoff, who contributed via a video link, insisted that Live Nation was still in good shape, despite operating in a sector that looked to be wobbling. While parts of the live sector had seen a downturn, other parts were still performing well, they insisted.
And where there had been a decline in ticket sales, those issues could probably be addressed long term by dealing with consumer frustration over price hikes and additional fees. Live Nation will lobby its key artists – who, the company execs implied, were frequently behind ticket price rises – to offer more reasonably priced tickets. Meanwhile, through its Ticketmaster division, the live music giant says it hopes to address commission fee issues, ultimately ensuring admin fees on print-at-home tickets were included in the published ticket price.
Unfortunately for Rapino and Azoff though, their investors seemed to hear the “15% slide in ticket sales” bit much clearer than all the assurances about long term growth, leading to a big sell of shares in the company, and a 16% slump in the firm’s share price.
Aware their stock value was falling as they spoke, and facing some tricky questions from their audience, both Rapino and especially Azoff clearly became frustrated as their conference progressed, the latter accusing those selling their Live Nation shares as being “short sighted”.
Presumably both Live Nation chiefs assumed investors had enough confidence in them and their company that they’d respect the two men’s honesty regarding falling ticket sales, admire their decision to tackle the issue head on in such a public way, and trust the execs to steer the firm through the tricky times ahead. Many probably do and did, but some clearly not. You certainly got the impression both Rapino and Azoff had expected a better response to their investor call.
