Live Nation Revenue Plummets 98% in Q2
It will probably not shock you to learn that with live events basically a no-go for the time being as a result of COVID-19, Live Nation’s revenue took a massive hit in the second quarter of 2020 (which was the first full quarter of the pandemic).
According to Deadline, event behemoth “saw revenue plunge 98% last quarter to $74 million and swung to a loss of $588 million from a profit of $176 million the year before.” Ouch.
Still, CEO Michael Rapino remains optimistic that live events will “return at scale in the summer of 2021.” In fact, ticket sales for the summer of 2021 are already chuggin’ along: according to Rapino, Live Nation has already sold 19 million tickets to 4,000+ concerts scheduled for next year. He also says that 86% of customers opted to keep tickets for rescheduled shows rather than take refunds, and that two-thirds of festival ticket holders declined rebates in favor of attending next year’s edition of the event. Additionally, sales for 2021 U.K. festivals like Download are “pacing well ahead of last year.”
Of course, that raises the issue of whether or not Live Nation can even survive until 2021. Rapino asserts that it won’t be a problem, since the company has spent the pandemic “strengthening our financial position to ensure that we have the liquidity and flexibility to get through an extended period with no live events.” Specifically…
“The company cited an $800 million cost reduction target and a $1.4 billion cash management program target in 2020. And it said that at the end of the second quarter, it had total cash and cash equivalents of $3.3 billion. The company’s gross cash burn rate – the amount it spends in a month – is about $185 million per month. And it recently amended its credit agreement with lenders to suspend elements of its debt covenant until the end of next year if it needs to.”
That “cost reduction” target, of course, cost a lot of people their jobs: in May, the company reportedly furloughed 20% of its staff — roughly 2,100 employees.
You can read Deadline’s full report here.
