Q3 2019 Earnings Call
Please standby.
Good day, everyone. My name is Vicky and I'll be your conference facilitator for today at this time I would like to welcome everyone to the live Nation Entertainment third quarter 2019 Conference call Today's conference is being recorded.
Before we begin live nation has asked me to remind you that this afternoons call will contain certain forward looking statements that are subject to risks and uncertainties that could cause actual results to differ including statements related to the company's anticipated financial performance business prospects, new developments and similar matters. Please refer to live nation's FCC filings, including the risk.
Actors and cautionary statements included in the company's most recent filings on forms 10-K. Thank you and 8-K for a description of risks and uncertainties that could impact the actual results like nation will also referred to some non-GAAP measures on this call in accordance with the FCC regulation G. Live nation has provided a full reconciliation.
Nation to the most comparable GAAP measures and their earnings release.
So at least reconciliation and other financial or statistical information to be discussed on this call can be found under the financial information section a lot of nations website that investors don't live nation Entertainment Dot Com. It's now my pleasure to turn the conference over to Michael Rapino, President and Chief Executive Officer of line They live Nation Entertainment.
Good afternoon, and welcome to our third quarter 2019 conference call.
Well I nation delivered its highest quarter ever which we continue to scale, our business globally and build on favorable supply demand dynamics for like music.
Well I grew 11% in the quarter and 13% year to date.
Performing a record Q3 last year and demonstrating the strength of our business model today's experience based economy.
And in response to recent questions about consumer demand, we're seeing stand spending as strong as ever September or amphitheater and arena shows actually close stronger than shows in September of last year and our fan spending onsite also showed ongoing growth.
At the center were flywheel the man for live events continues to grow as we have sold 92 million tickets through mid October up 6% for 5 million tickets compared to this time last year and we're on track to nearly 100 million fans attending to show this year.
We have translated the fan growth into strong here why games on onsite spending sponsorship and ticketing.
As a result, as we wrap up the successful 2019, we're confident that we will deliver double digit growth for the year.
It kinda talk concerts business year to date, we have had 73 million fans tend to over 26000 concerts.
Covering 343 million alewives, which is up 17% from last year.
Our international business has been particularly robust this year delivering much of a fan growth strong year for stadiums in theaters well in the U.S., Our arena and theater activity was also up.
As we've grown our show volume from the breadth of artists. We work with we've also been more effective in pricing tickets closer to the market value, particularly with the platinum pricing tool. So far this year, we've had over 3000 arena and amphitheater shows excuse platinum tickets.
54% increase the number of platinum tickets sold per show.
Looking at our venue operations, we have furthered our focus on the stat experience improving our hospitality across the board from our food and beverage offerings to our lawn experienced a VIP options. As a result, we've increased our average revenue per fan by $2 at 50 cents and around for theatres to over 29.
Dollars will also increasing fan spending thats festivals theaters and clubs.
We continue building our expertise hold onsite execution, we're finding more opportunities to build new venues for takeover operations of existing then use. It's it's a started this year. We've added 36 spend used to our portfolio.
Ranging from the Brooklyn balls in New York and Las Vegas to that then fourth music Hall, the Toronto and sports Palace in Belgium.
As a result, we're confident in the success of our culture flywheel for 2019, we will promote more shows reach more fans price more effectively provide a better fan experience on our venues, which will then drive double digit hey, why growth for this year.
Turning to sponsorship what the first days of rock in Rio and a strong growth across our entire sponsorship platform or high margin sponsorship business delivered 18% or why growth for the quarter at 13% year to date.
We are the global leader in music sponsorship delivering the unique value proposition of nearly 100 million fans onsite for brands looking to make them more direct connection with their customers.
As part of this we continue to innovate new ways for rents interact with fans onsite at our venues and festivals, what's new programs such as the Bud light read this photo installation at a rapid theaters or the revlon roller rank at level Palooza that was a result sponsorship revenue has grown 11% year to date that Arvind.
News well festival sponsorship, that's growing 31% year to date.
More broadly growth is driven by our strategic sponsors all of whom utilize a range of assets and span multiple years revenue from this group, which collectively accounted for 70% of our total sponsorship revenue has grown 15% year to date.
With over 95% of our expected sponsorship revenue for 2019 now contracted we're confident that will deliver sponsorship airwatch growth in the mid teens for the full year.
Ticketmaster generate its highest AOAC quarter ever up 20% for last year or 6% growth year to date as every quarter. In 2019 is one of the top 10 GTB quarters. However.
This growth continues to provide ticketmaster scale to invest in the evolution from paper tickets to digital which is being demanded by venues and content that are seeking greater control of their tickets and looking to develop a more direct connection with fans.
Our presence we're a log is pacing ahead of schedule and we expect digital ticketing to be installed at over 700 venues, representing 120 million tickets by the end of this year.
Over 60% of the fans and digital Naval defense now entering with their mobile devices.
And digital adoption is even greater in the NFL within teams have now eliminated pay for tickets and over 90% of fans to those games are using their mobile phones to get in.
Digital ticketing has expanded our engagement with fans given ticketmaster, a more direct connection providing for more effective marketing and targeted offers ticketmaster AFE is now regularly in the top 10 ranking for entertainment the Apple App store driving a 30% increase in app downloads this year.
This combined with continued improvements in our mobile web experience has led to further growth in mobile transactions now accounting for 46% of ticket purchases globally up 15% over last year.
Digital ticketing is a strong demonstration of what ticketmaster can be providing the best ticketing platform for venues by delivering value well beyond the sale of the ticket, but the same time, giving fans and ever improving mobile led purchasing and management experience.
With these pieces coming together and continued growth in our concerts activity I expect we'll deliver hey, why growth at Ticketmaster, the mid single digits for the full year.
As we approach the into 2019 were confident that our strong performance will deliver another record year of topline in April I gross all of our businesses concerts sponsorship and ticketing have delivered growth year to date and based on their key operating metrics, we expect each to deliver record revenue and annualized for the full year.
With an early look to next year or 2020 pipeline is up substantially with over 1500 Stadium arena and after their shows booked already up double digits from the same time last year.
As we look forward, we continue seeing tremendous opportunity to expand our global concerts and festival business by further growth when onsite execution sponsorship and ticketing with that I will turn the call over Joe will take you through additional details on the quarter and the divisions.
Thanks, Michael.
Getting into our business segments first concerts.
Over the combined past two quarters, which represent our core concert season.
It was up 9% in revenue up 2% year on year as we grew attendance to 73 million fans at over 26000 shows up 3% and 11% respectively.
As we discussed on our second quarter call timing. This year, so much shifted into Q2 versus Q3 and as a result for the third quarter attendance was 2 million lower than last year, resulting in slightly lower revenue in any line.
Looking for full season, though every indicator we have is of a robust growing business.
Our September results actually came in above our expectations as our amphitheater and arena shows both strongly and fan spending remained at high levels.
Overperformance in ticket sales in the last two weeks before the shows resulted in over $5 million of incremental airline or amphitheaters relative to how the shows close last year, demonstrating the continued strength in the concert business.
As Michael said much of our fan growth. This year has come from our international markets, particularly with their stadium lineup.
The same time, we are seeing growing demand throughout our broad portfolio of venue types globally theater shows our highest growth venues. This year as fans continue to find new up and coming artist they're excited about.
In festivals remain the ultimate fan experience and with the addition of rock in Rio continued globalization of the Lollapalooza brand.
Our over 100 other festivals, we expect attendance to be up double digits through over 10 million fans. This year.
Arenas continues to be the top please see the biggest shows and we expect to add another million fans. This year. It spans came to see such top acts as the Backstreet Boys Ariana Grande and John Mayer.
Fourth quarter, we see continued fan growth again, driven by our theater shows with AOCF growth impacted by the cost structure in a seasonally lower period for concert activity.
So looking at the growth this year and then even bigger pipeline shows for next year combined with ongoing improvements in our onsite execution. We believe we are well set up for continued growth in concerts.
Turning to our sponsorship and advertising business.
Third quarter sponsorship A.O. I was up 18% in revenue was up 26%, primarily driven by onsite sponsorship has their brand partners continue to recognize the value of engaging with fans and or events.
International markets drove the majority of our growth.
The first weekend of rock in Rio contributing to our performance this quarter.
Given the 14% growth in sponsored committed net revenue for the year I'm confident we will deliver mid teens growth in sponsorship for the full year.
Finally, ticketmaster for the quarter Ticketmaster AOL I was up 20% in revenue was up 5%.
Global GTV was up 4% for the quarter driven by fee bearing GTV, which was up 5%.
As with our concerts business international drove our ticketing growth in the quarter with its fee bearing GTV up 19%.
Globally primary GTV was up 6% for the quarter, while secondary GTV was flat.
As in the past concerts drove most of our primary GTV growth.
Secondary we saw growth in sports, particularly the NFL below or activity in North America concerts again, consistent with the concerts timing we've discussed.
As another sign of success for the Ticketmaster platform or open distribution strategy continue selling more tickets for clients off platform up over 30%.
15 million tickets sold year to date.
And just maybe the question on margin, yes, we're up a fair bit this quarter due in part due to continued improvements in operational areas such as search marketing and also because of some insurance recovery for the data breach issue last year, but our overall focus remains on growing the cash profitability of the ticketing business not been margin focus.
Which is how we have consistently grown the business over the past several years and expect to continue being successful going forward.
In summary, we are confident in 2019 will be another year of record revenue and AOL results overall and for each of our businesses.
We're also making progress on completing our assessment acquisition.
In August we submitted a necessary request for approval to the two key regulatory agencies in Mexico and are working through their process and in September see a receive shareholder approval for the transaction.
Pending the timing and the regulatory process, which is basically how many rounds of questions to they need to ask we expect to complete the transaction between December in February and will provide updates as we have more information to share.
I will now turn the call over to Kathy to go through more on our financial results.
Thanks, Joe and good afternoon, everyone. Our key financial highlights for the third quarter at 2019, our revenue was down 2% to 3.8 billion ally increased 11% to 427 million and operating income increased 11% to 260 million.
Our revenue decline in the quarter was primarily driven by a foreign exchange negative impact and without this our revenue in the quarter with flat to last year.
This FX impact largely affected concert, which along with the timing shift and events from Q3 Q.
4% decrease in Remington.
Sponsorship revenue increased 26% from the addition of the first weekend of rock in Rio in Brazil, and overall growth in our onsite sponsorship program.
And ticketing delivered a 5% increase in revenue as strong international activity.
<unk> percent increase in global GTB.
Hey, why growth was 11% in the third quarter, driven mainly by sponsorship, which was up 18% and ticketing, which was at 20% as a result to the higher GTV along with an insurance recovery related to the third party data breach incident last year that we had not expected to receive in the quarter.
This insurance recovery, along with the strength and amphitheater show performance at the end of the quarter as Joe noted previously.
Our outperformance relative to the guidance we provided in July .
Our operating income increased by 11% for the third quarter over last year, driven by the increase in Iowa.
For the quarter accretion of redeemable non controlling interests with $24 million and our diluted earnings per share with 71 cents.
Turning to our balance sheet.
As of September Thirtyth, we had total cash of 1.8 billion, including 747 million in ticketing client cash and 642 million in net concert event related cash, leaving free cash of 406 million.
Net cash provided by operating activities for the nine month with 33 million compared to 256 million last year, primarily due to the timing of when payment obligations were Dan.
Free cash flow adjusted for the nine months with 531 million inline with last years 529 million.
Conversion of Allied or free cash flow. This year was reduced by the timing of distributions to our non controlling interest partners.
And an increase in maintenance Capex.
Our total capital expenditures were 225 million for the first nine months with 120 million spent on revenue generating item.
We expect total capital expenditures for 2019 to be approximately 325 million with half going toward revenue generating capex projects.
As of September Thirtyth, our total deferred revenue related to future events with 952 million an increase of 26% over the 759 million at this point last year.
As of September Thirtyth, our total debt was 2.8 billion and our weighted average cost of debt was 4.2%.
Then in October we issued 950 million of 4.75% senior notes.
2027, and amended our senior secured credit facility, including a new 950 million dollar term loan b.
In addition, we have an undrawn 500 million dollar revolver, and a 400 million delayed draw term loan AG.
The proceeds from these transactions were used to redeem our 250 million of 5.375% senior notes due 2022 and to repay the outstanding balance of our existing term loan.
After these repayments and other fees and expenses.
We will have 527 million of incremental cash on the balance sheet.
This will allow us to meet the cash portion of our purchase price for the Assa acquisition, along with funding other acquisition opportunities.
After this refinancing our weighted average cost of debt remains at 4.2% and we estimate that our interest expense will initially increased by approximately 10 million in the fourth quarter as a result of this refinancing.
For the remainder of 2019.
We expect negative FX impacts of approximately 2% for revenue and 7% for Aon why in the fourth quarter based on current rate.
This FX headwind to ally is largely driven by higher sponsorship activity in Brazil, Australia, and New Zealand, which are projected to be up 7% in the fourth quarter and the euro and British pound, which are projected to be up 4% to 5%.
Revenue has less of an impact as that mix is more heavily weighted to the U.S.
We have factored this FX impact into our full year guidance that both Michael and Joe discussed.
It takes into consideration our reported year to date results and our expectations for the fourth quarter.
Consistent with where we projected at last quarter. We currently expect that free cash flow adjusted fiscal year as a percentage of our 2019 anyway, we'll be in the mid fiftys.
Our accretion of redeemable non controlling interest for the fourth quarter is projected to be approximately 26 million.
And as a reminder, as you look forward to 2025 rock in Rio Festival, which stand Q3 in Q4. This year is a bi annual festival and will therefore, not take place next year.
Thank you for joining us today, operator, we will now open the call for questions.
Thank you if he would like to ask a question. Please take note by pressing star one on your telephone keypad. If you using a speaker phone. Please make sure. Your mute function has turned off till now your signaled to reach our equipment again press star one to ask a question and we'll pause for just a moment until now everyone on opportunity to signal for questions.
We'll go first to David Karnovsky with JP Morgan.
Hi, Thanks for taking the questions you highlighted getting questions around consumer demand I assume maybe some of this became the macro possibly recession risk and the last time.
Downturn like mission is a pretty different company than in today. So I'd be interested to know how you see like position should we enter.
Walter economic period at some point.
Hey, David Joe I'll start first again as negate some of our numbers, we have seen whatever periodic retail slowness in September or anything else.
The market, what's that we have not seen that impacted at all and attack and the this year I gave the numbers was stronger than September of last year. So we're feeling very good how it's holding up.
In general.
As you said, we think are very different company than we were 10 years ago, We think our understanding of the consumer our level of specification associated with pricing understanding different consumer segments, our ability to execute on site.
Our all expansion, we hire so we feel like our capabilities certainly can lead to develop and at the structural tailwinds, we have been shifts.
And from good to experience the globalization of our business all trends that lead to a lot of demand support under any economic scenario.
And also what it's Mike is that.
We're seeing also what is on sale for next year.
Festivals and shows that are already on sale for next summer are showing strong demand.
No weakness at all in terms of the consumer buying the tickets as well as Joe said, our industry people come to the shows in September spending at the show. So we haven't seen any support factored all business as usual from sales perspective.
Okay. Thanks very helpful. And then you highlighted an additional 36 then to you today and I'm interested to know if you anticipate <unk>.
Salaried and the strategy there that's specific type of venue that you're more focused on.
And then finally been interested to get your view on crude hospitality and how that adds to the portfolio.
All right I'll take a shot you're kind of craft a little more for there. So I think I guess adjusted it.
We've always been in the onsite business and.
Our most profitable businesses, our festivals, where we get to count multiple revenue streams and our amphitheaters 50 of them that we have in America, what would be our highest margin.
Cluster venues across our business. So we've always been expanding at lucky that leasing in managing concert venues.
We've had a portfolio theaters in coil hope to Blue Philip Morris.
Well over 100 of them now around the world demand to those third Alaska 15 years or so we like those businesses.
Because they continue to be highlights on our per head sponsorship and our ticketing. So we're continually looking at any concert venue.
From 500 seats up to amphitheaters, if the pure play concert venues, where where our content can leverage our relationship into multiple revenue streams by managing our leasing our or building that that music venue.
On a global basis, we continue to look at them as great returns.
And then places that are quite well comes to life. The most leveragable in terms of content sponsorship and ticketing.
Okay, and just anything on group I'm not sure.
They're on the question.
Oh, yes, so part of what we've been talking over the last few years on our hospitality food and beverage business.
We already a very large food and beverage business on our own.
If you just just to spend our food beverage business software will be a world, leading hospitality food and beverage in terms of our revenue and poster.
Big part of our revenue hospitality strategy is to continue to make sure we understand the high end consumer and the hospitality around VIP and servicing that customer well.
Our core DNA knows how to put a lot of people through buildings in an efficient manner and service than we want to get more skillset and understands how to take care of the boss the VIP high end customer how best to set up the VIP, what does that VIP floor look like how best to monetize the customers.
On a better and higher experience are unique experience.
So great data that is an expert in the business in Miami is very successful what he does a at least tested at the Miami Dolphins Stadium with this platform. There. So we look at him and other skill sets like that that would bring those in house open our platform to them. They will help us design build and expand.
And our VIP hospitality business in our current portfolio.
Okay. Thank you.
And we'll go next to management Swinburn with <unk> Morgan Stanley .
Thank you. Good afternoon, just first on digital ticketing you talked about presence being ahead of schedule can you talk a little bit what's driving that is that demand driven or your ability to deploy that technology faster and clearly it's resonating with consumers you can see it in the app download data.
You help us think about the financial benefits to the company over the longer term as that scales to.
Become a majority or past majority of your ticketing business.
Sure Joe I'll give it to start first of all in terms of the pace in white deploying pass through two things one man.
I mean, we've been successful because of how effective it and that's what the NFL as well as our own delving, where do you see tremendous demand.
Venue that are saying, we don't want to get Lucky I mean, we want to see if the digital so we can be game that consumer data understanding better control of the ticket is now and our processes for deploying systems actually go into the venue change you may access control systems.
We've gotten down working well very quickly so I haven't bad when it's over the course through this year to move our target for installations.
500 to 600 now to 700.
Relations.
In terms of the long term impact clearly just for ticketmaster. It it's a fundamentally different value proposition that it provides to its venue now it's no longer just selling effective but it is providing important data service. So that's an important piece of what Ticketmaster is Andrew.
Through their multitude of youth is that the data will provide you don't support Ticketmaster and our concert business in terms of the effectiveness of their marketing their ability to provide much more targeted information to fan based on what we think they're interested in and I'll be very important to our venue strategy in terms of being able to make.
Offers to people based on their past behavior is it'll be important for sponsors, but then he directly.
Sponsor segment and customer segments in targets through a few are 100 million people. Our on site. So we do you believe you all those things over the next several years I think will be tremendously important throughout the entire company.
Got it that's helpful and just one follow up.
Show pipeline.
For next year as you highlighted is up double digits.
I know, it's too early to talk about 2020 in a lot a detailed but does that suggest that events will be up double digits next year. Because you also have fairly sizable acquisition, which should close as well and often over extrapolating registered I'd ask.
Sure sure a couple things first of all we haven't built in assess today in our numbers yet because of the uncertainty over plus or minus a few months in terms of the timing and so anything. We also gave you in terms of beyond sale would not have included them because we're not yet exchanging that data with them.
I think when you can taste or maybe not double digit to this point is two things one is yes, but it looks very strong for next year. Both in terms of the volume I mean, as Michael said the early demand for what we do have put on sale is also very strong in two ways, you're continuing to trend we've seen some shift into the fourth quarter in terms of timing.
Some of the on sale. So I don't think we're ready to declare the exact.
Amount that we're going to be up but we're feeling very good ideas, we're starting to turn the focus to 2020 shows.
Great. Thank you.
And we'll go next to David Joyce with Evercore ISI.
Thank you couple of questions first on the deferred revenue being up 26%.
Look like excluding the one week of rock in Rio that falls in this quarter and could you discuss other no comparable timing events that would be impacting the concert performance for the.
Fourth quarter, and then secondly on Capex or if you could talk about some of the components of the neither the revenue generating capex what have you been doing on the real estate side there. Thank you.
So on a deferred revenue.
Rapidly I would be in there, but remember a rock in Rio add Smith festivals are largely sponsorship driven and we haven't given any specific breakdown, but again, that's a second weekend would be in Q4.
What we said on the other comments are the Q4 is largely yet going to be theater in club driven.
So that would be part of it and you'll also be things some of the intensity on sales for next year in there as well.
As far as Capex threads, then it's going to be highly around yeah. We said we added 36, then use there is part of that's going to be running through that continued enhancement along the ticketmaster technology as well.
Great. Thank Rob.
It's probably no landmark.
No the Latino broken but yeah.
Give me getting them yeah. It also around our best of all set a theater.
Oh all of that is a priority on an aggressive in Canada.
Right, Okay ticket.
[laughter].
And we'll go next to Brandon Ross with like Chad.
Hello.
Right Randy.
Okay, sorry, we're having some phone troubles here, where start up you know.
So on sponsorship deals you lowered your guide.
For the year from it.
To mid teens from mid to high I guess, you said that consumers in great shape, but just wanted to make sure you're finding the same with advertisers in sponsors or is there anything to read into their viz, a viz its band.
For rock in Rio.
And then on.
Ticketing I think your Q4 ticketing guide implies flat a light year to year, how do we reconcile that with your increase show pipeline for next year and this continued trend to a shift in timing to Q4 on sales from Q1.
First question.
There's absolutely no shift in our overall look on sponsorship the only changes our previous guidance is constant currency, but we saw a lot of modeling issuing four people trying to understand constant nurses requirement. So we shift this guidance to reported currency.
And he gave you a very explicitly Kathy.
You're almost 7% in Brazil, Australia, New Zealand, 4% to 5% in in Great Britain and in Europe . So it's just that now that you didn't get back to change where the numbers are no change in terms of what you're giving in constant currency versus.
Versus reported but the demand so good managers.
Yeah.
Absolutely no change no deterioration.
In terms of stacking without without going through exactly.
There are still there's still some timing that he worked down in terms of exact one sales for ticketing and then picketing you're going to have some of the same if you can turn to send to be FX impact.
But overall again, we're seeing robot sales pipeline and robust consumer demand when we do that benign so sorry, when we do for the shows on sale. It's just a matter of NAND exactly they're all going to get put on sale. So we have a lot of shows that we have confirmed that the artist they'll be three.
We have contracts with them, we're scheduled Atlanta, we don't we're not prepared whether those actual tours are going on sale in Q4, Q1, and we're comping up a large Q4 last year I'm thinking.
So just keep in mind in your home.
Got it thanks for the questions.
[noise] I'm not going next to cone me go with Jefferies.
Hi, good afternoon, everyone. Thanks for taking my questions.
The first question first question is just around you mentioned just trying to the consumer and you're not seeing any slowdown there can you maybe just frame up how much headroom you have on your ability to price. The shows as we look forward and then the second question's around the digital taking are there any gating factors to you increasing the venue rollout UBS.
100, as we think about maybe a thousand 1200 and as we move forward with anything factors to that.
So there's still a consumer stream for pricing headroom.
Recent members, we'd given it we think theres still probably about a billion dollars price arbitrage. If we look at the secondary market is a guy the market value ticket prices relative to how we price tickets and we absolutely believe you're one of the factors getting any economic.
Slowdown it who that provide the buffer and that arbitrage eaten away before some of the fundamental demand it's our ticket so.
Got it absolutely does he gives us some greater comfort as he thinks about different economic cycles.
In terms of digital picking the rollout I think.
In the this year about 80% and that the major building one gating factor is if you're not going to happen around me a delphine mid season. So they didn't ship before the start this evening they won't ship.
We now need to be air it would be when they take a break.
And during their next cycle and manage the matter getting into a lot of smaller buildings.
It's Michael just on pricing just to give some narrative.
He said the press likes to talk sometimes about the ticket pricing of the high shows overall concerts are very affordable price point. If you look at the average ticket pricing the $60 average friends go to two or three shows a year, it's still a very affordable lifetime memory.
You know versus a a trip.
Fixation, so in a recession, we seem to see sees it the consumer may pull back on high ticket items you may not go on vacation may pull back on a new car, but to take his kids to Taylor Swift or his wife to a show worse friends, it's still a very very affordable option.
We know because their lifetime moments and Kodak moments in your life. They still make sure. They go to that and local show at the arena or stadium or amphitheater, because it's still incredibly affordable even if they're in a slight pullback on discretion and now I say that is also means we haven't why we believe the ticket is completely still under pressure.
That's why there's $8 billion to $10 billion in the secondary market on an ongoing basis, we still think that the one of the houses wildly underpriced and you're a year over year, we'll make progress with the artist to keep pricing it better and taking some of that high end opportunity into his pocket.
Well, we lowered the price in the back end to get better full capacity. So overall, we think.
No. It was still a very affordable option in light cheaper than a good dinner the big picture with great pricing opportunity given we still think it isn't very low priced option. If you compare to a and then be a gain a night, it's a theater front row seat us day.
I I don't know fell game et cetera. So we think concerns underpriced lots of room for pricing still affordable to everybody no matter, where their economic situation lies and and we think the secondaries the proof that we have upside.
Thanks very much.
Again press Star one basket question.
Well go next to that Jason Bazinet with Citi.
Hey, I just had a question on Capex I know you guys have always talked about 2% capex to read.
It seems like with the.
Second move up in Capex for broaching sort of three do you see enough sort of good revenue opportunities.
We should be taking sort of 3% as robust as sort of a more reasonable number.
In the interim next few years as opposed to two or as 2019 sort of an aberration.
So part of that just to restate, that's 2% we're back before rack changes. So it made a little bit of an increase in it but I think you know at around 2.5% is probably the right rule and kind of years, maybe a little bit above that but you know just yes. There are lot of what we think are good and.
And then opportunities in RV and hospitality in our technology that we think they're the right way see less continued investment in them.
Perfect. Thank you.
[noise] and we'll go next to Doug Arthur with Stupor.
Yeah, I, just like Arthur Joe I'm wondering if you could delve into the mix in a concert business a little bit more in the third quarter.
So you would say some timing issues going into the quarter in Europe that number of events in North America was up 15%.
It looks like it and for that was down close to 20, so that's a pretty unusual mix.
For the third quarter does that.
Select a lack of stadium shows basically or or or is there something else going on.
No.
Do you have it exactly right. It's a mix shift so if you look at the start if you look at Q2 Q3 together because we told you we were going to have more weight Q2, this year, but those two quarters together the court concerts segment the concert.
Business is up about 4% on a constant currency. So first of all you lose a few points on the revenue side, just because of the currency fluctuation, but really what's going on as we.
Told you over the past nine months is we have fewer stadium shows in about 30 fewer stadium shows this year than last year, and we've had tremendous growth in our theater shows in particular, both in North American internationally.
Stadium shows that we don't have are the highest volume shows and also the highest average ticket price you're theater shows are gonna be a much lower average.
Attendance and also a lower ticket price so all you're seeing its a mix shift going on.
There still is across all of the venue tied very strong sell through a good man, we talked about platinum tickets were talking about all the components. So the performance is very strong across the board and then as we look at next year, we see a big uptick again in our stadium volumes, which is what you get the first read.
In the business. So we're feeling very good there's absolutely nothing you should read into that other than timing.
Great. Thank you.
[noise] at this time I would like to hand, the call back over to our speakers for any additional or closing remarks.
Thank you everybody.
That does conclude today's conference we thank you for your participation.