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Live Nation reveals measures to protect the business during COVID-19 shutdown
By Chris Cooke | Published on Tuesday 14 April 2020
Live Nation yesterday announced a series of measures designed to help the live entertainment giant navigate the ongoing COVID-19 shutdown. In a statement to investors the firm outlined an amendment to its existing credit agreement, the completion of a new revolving credit facility, and a cost reduction and cash management programme.
The latter will see CEO Michael Rapino voluntarily forego his salary entirely while other senior execs will take salary reductions of up to 50% for a certain time period. The company will also instigate hiring freezes, reduce its use of contractors, seek to renegotiate rents, and utilise all available government support schemes, especially in relation to salaries.
All of Live Nation’s core businesses – including its divisions involved in tours, festivals, venue management and ticketing – have been significantly impacted by the measures implemented to restrict and delay the spread of COVID-19. Those measures, of course, mean that the live entertainment industry is currently in full-on shutdown in numerous countries.
It’s still unknown how long that shutdown will continue for. Many August festivals are believed to be holding off making any decisions about their 2020 editions until late May, hoping that lockdown will be coming to an end by then in both Europe and North America.
However, some reckon that most events will end up being called off through to September. Some people are even more pessimistic, reckoning that – even when lockdown measures are relaxed – restrictions on large-scale events and international travel could stay in place until the end of the year, or even well into 2021.
Though in many ways that depends on how things go in those countries affected by COVID-19 first, where restrictions are already being lifted.
Either way, Live Nation put a positive spin on things in its investor statement yesterday, alongside the announcement of the short-term measures to secure its business.
It stressed that – while 8000 of its shows had been impacted by the COVID-19 shutdown by the end of March, impacting on fifteen million ticket sales – 7000 of those events, accounting for fourteen million of those tickets, have been postponed rather than cancelled.
And while refunds may also be issued for some postponements in some markets, generally cancellations have a more negative impact. It also noted that in some European countries regulations may be changed to allow the issuing of credits rather than cash even on cancelled events.
Meanwhile, Rapino looked to the long-term future, telling investors: “The live entertainment industry has delivered incredible global growth for over 20 years, which speaks to the great passion and resilience of fan demand”.
Referencing the new credit arrangements and cost savings, he went on: “With this additional liquidity, the flexibility in our debt covenants, and cost-cutting efforts, we believe that Live Nation has the financial strength to weather this difficult time. We will be ready to ramp back up quickly and once again connect audiences to artists at the concerts they are looking forward to”.
