Chip Somodeville/Getty Images
Live Nation President and CEO Michael Rapino testified before the Senate Judiciary Committee in February of 2009. The committee eventually approved the merger of Live Nation and Ticketmaster, and today Rapino addressed shareholders.
Live Nation President and CEO Michael Rapino testified before the Senate Judiciary Committee in February of 2009. The committee eventually approved the merger of Live Nation and Ticketmaster, and today Rapino addressed shareholders. Chip Somodeville/Getty Images
Earlier in the week, I reported on the concert promoter Live Nation's tough year, and why some people think the company's own business model is the cause of its trouble.
Today we got hard numbers. The adjusted operating income of Live Nation Entertainment (LNE) in 2009 was $445 million. The company estimates that figure for 2010 at $405 million.
Executives addressed the company's investors at Irving Plaza in New York, and acknowledged that changes will have to be made in order to prevent a further slide. President, CEO and director Michael Rapino attempted to put a postitive spin on company's position in the market, saying that Live Nation's drop in ticket sales was smaller than the industry at large. He also insisted that "a little bit of pain" was the best thing that could happen to the industry and that the decline in the market would open the door to enforcing a "correction" in ticket prices.
Some of the changes Live Nation says they'll make in the coming year:
-"We've heard the consumer loud and clear," said Jason Garner, LNE's CEO for global music. Ticket prices will have to come down. Garner said that lower prices will get more "butts into seats," which will mean higher revenues from beer and t-shirt sales at the venues, where Live Nation actually makes most of its money.
(At the outset of the meeting, Rapino thanked Jay-Z for greeting investors and noted that the rapper was sticking around to watch the presentation. One wonders how this particular artist would respond to a request to lower his ticket prices — and his income for the show — so that LNE can make more money.)
-LNE will expand into international markets, which the company says haven't stalled in the way the American market has. "Jay-Z doesn't care if he's playing Paris or Denver," Rapino said. "We do."
-The company will look to develop its chain of House of Blues clubs, which has 13 venues across the country.
-Ticketmaster is "100 per cent committed" to phasing out fees for printing tickets at home, said CEO for ticketing Nathan Hubbard. The service will also start to display the total price, after all fees, from the outset of each transaction.
-The "No Service Fee" promotion that LNE offered in June may be offered again later in the year.
-U2 will finally tour in 2011 after postponing dates from this summer. LNE estimates the tour will bank the company $6 million.
Rapino also acknowledged that the press reports about Live Nation's struggle have dogged the company, and that the company's bottom line for the end of 2010 might suffer if some artists get spooked by reports that "the sky is falling" and decide not to tour.
One group they couldn't keep from spooking: the investors themselves. When the meeting started, Live Nation's stock price stood at $11.20. Two hours into the meeting, when Front Line and Live Nation executive Irving Azoff joined in via video chat, the price had dipped to $9.90. By the time the market closed, the stock had rebounded to $10.19 per share.