Q1 2021 Live Nation Entertainment Inc Earnings Call
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Ladies and gentlemen, thank you for standing by our presentation will begin momentarily, ladies and gentlemen, thank you for standing by our presentation will begin momentarily. Thank you for your patients cannot cherry and.
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Good day, everyone. My name is Hector and I'll be your conference operator on today's call.
At this time I would like to welcome everyone to live Nation Entertainment's first quarter 2021 earnings conference call.
Today's conference is being recorded.
Following managements prepared remarks, we will open the call for Q&A instructions will be given at that time.
Before we begin live nation has asked me to remind you that this afternoon's 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 SEC filings, including the risk factors and cautionary statements included and the company's most recent filings on form 10-K, 10-Q, and 8-K for a description of risks and uncertainties that could impact of the actual results.
Live nation will also refer to some non-GAAP measures on this call and accordance with the SEC regulation G. Live nation has provided a full reconciliation to the most comparable GAAP measures and their earnings release the.
The release reconciliation and other financial and statistical information to be discussed on this call can be found under the financial information section on live nation's website at investors of Dot live nation Entertainment Dot com.
On today's call, we have with US Michael Rapino, President and Chief Executive Officer of live Nation of Entertainment and Joe Berchtold, President of live Nation Entertainment and.
And is now my pleasure to turn the conference over to Michael Rapino. Please go ahead Sir.
Good afternoon, and thank you for joining us and we spoke last in February I was optimistic that we will soon be returning to live events and since then our confidence has increased for our key markets and.
And the U S over 40% of the population received at least one vaccine dose and most states are now fully or partially reopening with more restrictions being lifted daily and the U K over 50% of the population as we speak.
<unk>, one vaccine dose and they are reopening and roadmap is tracking to plan.
And although Europe remains a few months behind on vaccinations are progressing and recent discussions about reopening to international visitors. This summer are encouraging.
Around the world people are showing the need to get out and socialize and once again, which reinforces our expectation that the return to concert will be the logical progression and vaccines are readily available to everyone who wants one this is generally already and the case and the U S. Where we are confidently planning are reopening, particularly corrupt or shows.
And we expect other major markets will follow this summer.
Alongside these trends we are seeing the effects of significant pent up demand. The stands are buying tickets and the bets are selling out faster than ever.
And the U S Bonnaroo electric Daisy and rolling loud festivals, all filled out and record times at full capacity and.
And the U K you of 11 festivals planned this summer, including our largest ones reading leads and Parklife, where tickets are already sold out and is.
Zealand, the country's largest festival rhythm and bind quickly sold out.
And as we get further clarity on reopening time lines, we are announcing more tours for late this summer, including Dave Matthews, Luke Bryan for rimfire, and others to come show and artist increasing confidence and performing this summer.
Given the longer lead times associated with global Arena and stadium tours and we expect these will start later this year and into 2022.
As we've discussed we are already seeing confirmed major tour dates from 2022 up double digits from the same time pre pandemic.
Many of these artists will have multiyear tour spend and the U S Europe and off and Asia, or Latin America, setting up for a strong multiyear growth run.
Complementing our event pipeline Ticketmaster continues to build its global client base to further accelerate its growth. This year, we have already added new clients, representing over 5 million net new fee bearing tickets, which we expect to grow further throughout the year and it's more venues prepare 2000 of 22.
And with Ticketmaster's client base increasingly shifting to digital ticketing, we continue to enhance our offering ranging from upsell and improve advertising opportunities as well as blockchain and F T ability of the Ticketmaster platform.
Our brand partners remain engaged and are responding well to our reopening and like our concert business. Our sponsorship pipeline of committed activity for 2022 is up double digits for next year relative to where it was pre pandemic.
Like so many of you I'm excited to go back to contracts over the next few months and even more excited to see what I expect to be a non stop 2022. The continues roaring into 'twenty, three and beyond with that I will turn it over to Joe for more detail on our operating results.
Thanks, Michael and good afternoon, everyone.
And as we've done over the past few quarters. We've added some tables of the back of our earnings release, the reconcile and more detail some of the numbers I will refer to today.
For the first quarter all of the key cost and cash numbers improved relative to the Q4 2020 and are at or better than what we expected at the start of the quarter. We remain confident that our actions taken to cut costs and increased liquidity will provide us with the runway we need until we bring shows back which will begin to scale and.
Key markets outdoor this summer.
As we move toward reopening we continued the balance strong cost and cash management, but now making the necessary investments to grow the business.
We expect the second quarter to be our first year on year improvement since Q4 of 2019, and you'll also be generating positive ROI through the second half of the year, we still plan on reducing costs this year by $750 million and reducing cash spend by $1 5 billion relative to pre pandemic.
Plants.
The 20 and increase of $462 million on.
Free cash along with $964 million of available that capacity gives us $2.1 billion and readily available liquidity up from $1.6 billion at the end of of 2020.
Benefiting our free cash position and January we raised $417 million of net debt and we had a $181 million timing benefit largely associated with the third revenue classification.
Our total of free cash the usage and the quarter was $136 million or $45 million per month, which included $100 million per month of average operational burn roughly.
Roughly in line with Q4.
Another $4 million per month of non operational cash cost to get us to of $104 million average per month and grossberg.
This gross burn includes the benefits we realized from the sale of a non strategic minority investment.
And timing on interest payments and severance costs.
And and Q1, we had $59 million average cash contribution margin per month, roughly 50% higher C. And then we averaged and Q4.
Now on the other balance sheet items ticket refunds and the global refund rate for live nation concerts that of rescheduled the enter in or have gone through a refund window or windows was unchanged from the prior quarter at 17% through the end of Q1.
For tours that of gone for a second refund window. The refund levels continue the generally be much lower for the second window as of the casual fans requested their refunds during the first the window.
On our festivals, where fans we're able to retain their tickets for the next scheduled event, 65% of fans are doing so.
On deferred revenue at the end of the first quarter event related deferred revenue for shows that will play and the next 12 months was $1.5 billion. The same as at the end of queue for ticket sales and the first quarter, where $200 million, but this was offset largely by a shift of deferred revenue.
From short term the longterm for shows that were reschedule the end of 2022.
This long term deferred revenue will then largely shift back to short term during Q2, and Q3 reversing the timing benefit and free cash this quarter.
Finally, looking forward as Michael said, we continue to expect concerts the scale of this summer and key markets, notably outdoor and led by the us and U K.
Given this expected activity true queue to we will contain the ramp up our operations, enabling ticketmaster to run its on sales of the concerts Division staff up for the amphitheater and festival season and sponsorship staff the support delivery for brands of these events.
Between this ramp up and the reversion of some of the Q1 timing benefits. We expect the average monthly net burn for the first half of 2021 to be roughly in line with Q4 of last year.
With that let me turn the call back over to Michael.
Before taking questions I want on the cover one other thing Cathy Willard CFL from the past 15 years will be retiring as of June 30th She will be then staying on as an advisor throughout the end of the year.
As of July one the plan is for joke berchtold to become CFO.
Cathy is you know has been an invaluable part of the executive team for the past 15 years and been with live nation for over 20, we're.
We are much stronger company because of her not just from her role of CFO, but and the champion for women and the company and the industry and important advisor to me on a range of issues.
Because you built such affect the finance organization I'm confident and we will remain in good shape as Joe steps and.
He and Kathy had been working together closely for over a decade now and he's got more deeply involved over the past year as we have been planning this transition and.
In addition, late last year, we elevated Jackie Beato EVP of operations to take on greater responsibility and give Joe the bandwidth you will need for the job more than anything I want to thank Kathy for impact on the company of commitment and your friendship.
The operator, that's open the cough of questions.
Thank you at this time and will be conducting a question and answer session. If you'd like to ask a question. Please press the star one on your telephone keypad, a confirmation tone will indicate your line is and the question queue. You May price star too if you would like to remove your question from the queue for participants used.
Speaker equipment and may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Uh-huh.
The first question comes from the line of David Karnofsky with J P. Morgan. Please proceed with your question.
And the question and Kathy and here on the call of the Buck and.
I guess with regards to the summer early fall and Michael J and can you provide the phone and how much is both at this point relative to a normal year and the U as in UK and just given the lead time and how much of a room do you have the skill kind of ramp that hires and conditions.
And grew farther from here.
Yeah. This is Joe David I, I'd say that the summer and early fall. The next three to four months is largely booked we obviously have a lot that has shifted from last year and the this year. We've added some tours and we've also added a number of festivals all of which of and selling well so the.
[noise] Michael Lamp show is probably a couple of months later time. So I think we'll still have room to be adding more as we get into August and September but the majority of it is is has been booked at this point.
Okay, and then maybe check the expand the bed on the game.
And can you know and the next 12, the 18 months and given all of the supplies and spell them and.
How do you expect the kind of efficiently allocated out all the tour I'll go ahead and capacity and constraints not necessarily in terms of the news, but just you know in terms of maybe like the weekend nights of available.
Yeah. We're currently you know and that good position, we have lots of great conversations was probably every artist she can imagine talking about when they're gonna be back on the road you know and artists typically jurors. Once every three years on a cycle. So we're kind of condensing 2021 and 22 so the.
Good news is we got incredible supply of.
And now we're just starting through what makes sense to go out and 20 at the end of the 21 still into 22, and some artists where we're talking about moving moving into the 23. So I would say you know the artist of patient and they're smart in terms of what their cycle as of predicting maybe they have a record coming out and the fall maybe its and Q1.
So right now we have great supply, we don't have any issues in terms of.
Availability, but we're also not looking to cram everything and three years into the one year, we're looking to stage of good 22 and to 23 year. So when you're spreading over those those two years you find it on Fridays and and up weekends and end up not through the challenges come to to be solve that way.
Okay, and and if I could just go go more and I guess the contents activity that ramping up can you maybe the discuss little day about what the problem is the ninth of live nation and what are you finding the do different things and.
Prior to the pandemic and and and just let your old of all confidence levels and and hitting of prior target for structural cost savings. Thanks.
Yeah, we're we're very confident and we're gonna hit the structural $200 million of cost savings, we give you and your as we've talked about and we we've done at the opposite way, which is we took $950 million of costs out and so now it's a matter of of how we about $750 million of costs back and over Oh over a period of time.
So that gives us that makes it more real if you will we we've done a number of things and I'm gonna take any inside we've talked about we've shifted that two of truly global organization as part of moving to a true single approach on the marketplace on the enterprise and on all of the technology on.
On the concert side, we have a long standing local network, which is very important to continue to understand the markets. So the 80 per cent of your of your shows now books the of tours and you don't need to have an entire infrastructure and every local market. So we've been seeing that there are ways of the streamline and it and when we were growing double digits.
Every year through most of the last decade, and it wasn't worth the the potential disruption, but as we've stopped and we've asked ourselves what's the best way to do this rebuilding from the ground up and we're very confident it's going to live or those savings and the and and even more effective organization for driving and future growth.
Okay, and and just just to add to Joe I think there's two ways to look at the business. We we got we we had a great workout test and the new muscle for the last 12 months in terms of our balance sheet are fixed costs and how we can be of come more efficient and I think that that you're gonna see comes of life through our 200 million plus but I think the real the real one.
When of of the downtime was what is the new products of the kind of live nation three point of all what else are we going to do with this incredible scale, we have across our consumer base. So I would say whether it's sponsorship.
Concerts of Ticketmaster, we would have a new level of new products and the pie, but we had not historically at the time and or the skill set.
To kind of on lock so I'm very confident both of the next couple of years, we're gonna see some exciting new things coming out of the concert division or consumer side of the business. Our subscription business are ticketmaster business or a new new AD business models were looking at so much of a exciting ideas.
And now finally had the months and months to put some some people around and some skill set that we've acquired to up to advance that part of our business. So we look at the future is not only can we run the largest concert company and the world more efficiently and the best at it but also look what other new products will drive our business.
To think differently about the customer and the artist.
Okay.
Your next question comes from the line of of Brandon Ross with Light shed partners. Please proceed with your question [laughter].
Hello.
I guess, you just mentioned live nation three O. So.
Figured I'd kick it to the web three Oh, and you earlier mentioned the digital ticket and the ability to now integrate blocked and was wondering if you could help us understand but the extra advantages are.
Utilizing the blockchain burst of your current version of the digital ticket and maybe how heavy a lift that is for you and what tech you plan to use.
Thanks Brandon.
You know and so it's a great question, we get asked it every day and I I read of New article every day on on on on all of the great things. It's gonna solve so so let's step back and and Blotchy, we think the the it's a very exciting of technology. We're currently using blockchain technology and our products and then invested in this business Ms tore a few years now.
And we think it's it's of great technology that will help our business I I would step back from what are the problems that we're trying to solve or what are the opportunities. The the blockchain specifically brings to the ticketing business one of the great advantages and the industry is when we went from a P. D F. Two of digital ticket we.
Unlocked a lot of what you keep reading about the blockchain is going to do in the future. So the digital ticket on your mobile ticket that you are now buying has solved the biggest problem that unlocked we've been talking about this for two years identity identity for us the fan the.
Artist the team and the venue, knowing who sits on that and see who's actually coming to the venue having of communication directly with them, having to verify ticket being able to trade that ticket put and rolls on that ticket. The currently do that now if you want it can you transfer it can you transfer with a certain cap all of those things the content.
Could decide to do and if they wanted to with the digital ticket and the service to me I read about being reduced them and the service to the it can be reduced tomorrow, just the function of the venue not the ticket company, so digital ticket and and moving from the old P. D. F model that historically round the industry has been achieved the date.
We've been talking and the last couple of years about the the progression of adoption.
COVID-19, obviously is really sped that up most most of the ticket access now does not want to be and the contact business still having the ticket on your mobile phone walking into that venue and and and being able to buy a drink communicate with each other up cell you you name the ideas when you have a.
Direct communication with your fan those are all being on locked right now by sports teams by venues and artist. So we think you know the the blockchain technology is the great part of of technology solution to keep providing a better communication and identity platform for the fan, but that's already in <unk>.
Place, there's nothing blockchain would bring to that that we can't Orange and currently achieved so we'll continue to lose blotching to supplement and augment our platform.
And continue to look to to be better at it and we will we you know we think the the great opportunity and ticketing and you're just getting this full access you know I I would step back and brown and you've and I've talked about this before in terms of of what is the ticket company do me quite honestly selling the ticket is the easiest part of being of ticketing company, when we talked to client and they don't.
Pick us because we could sell of ticket they pick us because we have market marketing and distribution reach the ticket. It took us because we have one of the largest market places and the world to help them sell tickets and pick us because we have a secure great technology platform. The can plug and play with their a P eyes and their database and some of their consumer.
Needs and they also pick us because it's the financing mechanism.
Of ticketing businesses about financing the venues and and and exchanging that for for ticketing rights. So it's the whole bundle to be of ticketing company and that's what Ticketmaster is delivered so successfully for so many years and will continue to think lead with blockchain and bringing identity and all of the.
Transparency and benefit the now having of that ticket with and ownership to market.
And can you meet and talk a little bit about Hello.
And you may be talked a little bit about the collectibles angle to it obviously and if I E. R. You know very popular right now how does that integrate into your ticketing system or is that something that would be separate from ticketmaster.
Right now that's and and we think that's the great opportunity you know and F. T. As of just another way of saying can I add value to the customer relationship can I put a kind of put a contract of privileges on that.
Ticket for the customer and and that's a great mechanism and it's a great vehicle I mean, whether we sell on the a t-shirt to that customer of coming into a concert or we seldom Ah Ah Ah Ah a P. D F with a a unique piece of artwork or concert moment, it's another mechanism to engage your customer bye and unique.
Products that will let those magic memories of that event live on so macro level, we were always and the business of figuring out what else can we add to that experience of the customer wood wood would engage and to to to kind of some at that magic moment called the concert so and have to specifically on.
Ticketmaster side, they're working already with the sports teams and and festivals and everyone else about how they would how they can layer and N F. T. On a ticket you can meant the ticket admits and N F T right on top of the ticket master platform and deliberate how you want so that's ticketmaster will be and the delivery business.
Using their ticket digital ticket blockchain and then as a customer the creates its own and empty, we can sell those and and bridge those together on one of.
Ever minting system on her on marketplace they use.
On the live nation sites, where or deep and exploration and we have a great team that's been working on this and working with the the the Mark Cubans of the World and others, who are smart and the space and I think you'll see us come out with and interesting live nation concert and empty angle. We think that's a great way for us to engage with our.
Fans using that and F T and the direct relationship now too and rewards and perks and souvenir of moments. We've all learned from top shop is at the at the N. B, a so we and visit live nation of what the marketplace and and looking at some of its concert moment is magic mom.
And that we could meant and and attached to our ongoing ticket festivals and special moments. So we think it's if you have I P. We think it's and exciting time to to to use that IP to create some exciting moments with fans that can trade it ongoing and live that moment and.
And kind of cement that relationship they have with that.
July 16th first concert back of Jones Beach, and I got in the N F T and of special Souvenir ticket. That's mine forever I can trade. It I can I can put it in my wallet and and one that moment forever. So when they get the fabulous moment to take a of boring P. D F and turn it into a magic souvenir was on.
And the limit that ideas on how you can bring that the life for the fans. So weird tickets and exciting time, and we think that will be able to use our scalable IP to to lots of our own ways to engage with the fan and this space as well as in power and our artists through our management company that we've been doing today.
Makes sense and then I guess, while we're on ticketing just one last one with the visits back the maybe it would be a good time to get some updated your updated thoughts on the secondary ticketing market do you see that as as the gross market I guess as an industry.
First of all and then for Ticketmaster, Secondly, and kind of maybe how you see the competitive landscape and that arena now.
Yeah, we Ah we absolutely believe in the secondary market. It's another set of distribution platforms of getting tickets and the hands of fans for all of the reasons Michael talked about in terms of digital ticketing and and identity, we think that and more and more of the control over of secondary will go to content the <unk>.
Quartz teams and the artists as they have a wide set of of agendas in terms of what they would like to accomplish and how they like to have the relationship with their fans. So we think that you think there's some evolution as it goes to the digital ticketing and we absolutely support the content, having more control over how that happens.
We support there being more transparency and secondary but we we think it's the chair to stay and it will continue to be important distribution platform will continue to focus on pricing and to get as much of the.
Of the value of those tickets and the hands of fans as we can and I think is and.
And you know and we look at the river.
They've all got of similar business Monterey, It's all of the service fee business model and they've got a customer acquisition costs associated with them.
With a lot of search and digital on and we have more customer acquisition costs associated with alignment with the content, but it's it's a similar at the end of the day business model and we think we've got a great propositioned by aligning with content and by also leveraging the scale of our Ticketmaster platform. So we liked the position we're in.
Whether it grows or shrinks exactly as artists price of their content to market value is the rash of of concern and making sure. We're we're delivering and on that content agenda.
Great. Thank you guys.
Yeah.
Your next question comes from the line of Ben Swinburne with Morgan Stanley. Please proceed with the question.
Thank you.
Michael you're kind of freaked me out of it that July of 2021 cause I have tickets of the black Crowes. It's Jones beach on that day, so maybe you're gonna be there as well probably and better seats [laughter].
I guess just picking up quickly on the secondary of conversation with Brandon any any comments of reaction to the the.
The the noise out of D C unsafe techs and and what's going on I thought it was and.
The person I thought it was sort of of unusual to be bringing up and defending sort of the secondary market in that context, but I didn't know yeah, we'd sort of put the consent decree behind us I saw on it and if you had any comment on that stuff since it came out over the last month or so.
Yeah. It was surprised us to the right now where we are but.
Pascal is the you know, but on the suspicion for quite a while so we've we would love to sit with his team and educate him on on the business. So we can get all of the idiosyncrasies too nailed because it's it's never as simple as it seems so I I really you know and we look at that as a bit of of new since they they seem to be obviously scalpers are are doing.
And a good job of fencing and his staff that we're gonna do of digital ticket and and closed platform. So that's that's the great fear that we're gonna have any digital ticket and we're gonna tell you. When you buy that ticket you can only you can only resell it up ticketmaster, that's never been our our our our intent so there the.
They're kind of their main claim it and and make sure if they would sit down with us would explain and it's never been our intent to have of clothes platform. We've actually the biggest thing I've done it ticketmaster since taken over his rebuild this company. So we kind of an open platform.
Our goal is to sell that burst ticket.
But as we did with the N F. L last year, we have an open platform with the N F. L. We power of the N F L and if those secondary companies are approved by the N F L and that ticket your box of the N F. L can be freely sold on any other platform and used to get on the show so.
That's what we think of the best model and we think we have the largest kind of footprint from a primary platform.
We believe that if the ticket is to be resold, we have a great marketplace for that for the Ticketmaster fan, but we're also working and been working towards and open platforms and it can be sold and other places that the content like the NFL or venues want that path bored. So.
Not sure there's much meat to the to the claim we we we're not looking to limit distribution of we're looking to increase distribution part of the team spend news and artists and the best platforms will win in the end of the offer the best value of of the content and the fan. So that's that's our plan you know, we think we have an incredible opportunity and ticketing and the.
The the amount of people that by at Ticketmaster and actually resell their ticket is very very low. So we think we have a natural huge audience that we should do a better job of allowing you. The fan. If you just bought to think about how you can resell on our platform and maybe there's better incentives we can do for you.
You as a fan of.
And to make that even more seamless uhm, but if you want to sell on other platforms as we do on the NFL than than won't be happy to validate that ticket and let the content decide where it's sold.
That's that's very helpful. The second just on the Beach I think you guys and out and 60 venues and have been equipped with their technology, just and he updated thoughts on how substantial that opportunity is as you guys look into reopening later this year and into the next year from the business point of view. This is not all of the the 20th.
[laughter] well I think it's you know you don't hear from them. We just talked about Nfpa's right. Our job is to keep looking at our core business and making sure. We can add more exciting products around that core business. We're just of thrilled with the with the the acquisition partnership with the Madden Brothers, who run this on a day.
Daily basis, if there's the soul and sweat they put it and it's really all of them. We've just add a little bit of of fire hose by helping them with the distribution you know there I think they're up to over a thousand shows and the last year.
Probably gross somewhere over 10 million so a good start to that business.
But now you're you're gonna see with our new clubs you know we do 10000 club shows so you start digging into that a little bit.
Adding some amphitheaters and the part we think's really excited and as our festivals open up that model of that and Lollapalooza instead of just rebroadcast and that for free.
And what what if for $49 you could watch the Lollapalooza weekend or you can buy the Lollapalooza day at home and and continue your party at home if you couldn't make it to the venue. So we've seen great success on R. E D M business skills blown the numbers up on his business when he does that so we think extending the festival.
Which is a bit of a party at home model, It's got great opportunity and I would much rather use my festivals to add another revenue ticket to the equation, then and treated as promotion value. So we're gonna test that the summer and we think will get some learning and that'll help us move move forward on that place.
If you just launch festival T V. You have a proposition itself there with 150 plus festival. So we think that's exciting plus our club business for young artist, So new new new space for US, we think it's and exciting place to add value.
Think the subscription ideas forward with that and I think we can bundle it with other things we think there's a a great foundation, though to our core business here that we can keep exploring and and and abating on.
Great. Thank you.
And your next question comes from the line of the Steven and Glasgow, the with the Cowan and company. Please proceed with your question.
Hi, Thanks for the question the July do November period, after the festivals and the us and the UK appears and.
And I'm pretty crowded outside the major festivals and you guys highlighted on the press releases there does that having you know any.
And he is there any impact adversely on consumer demand and and some of those other festivals given the crowded slate and then also with the 2021 rock and Rio rescheduled for 2022 does that mean, you will have that first of all two years and a row now twenty-three also.
Well I'll answer it backward where it will we're we're we're debating the rock and roll decision. So we'll get to that the rocket real decision and we'll get to that later after we get twenty-two the.
Done no. We were we we don't have any fear of of crowded slate I think you saw maybe some of our releases.
And you know, we just went up with the with Travis Scott yesterday, and the day before and.
So the hundred thousand tickets or.
Golf Golf ball went up with the as long as the biggest on sale ever.
And rolling loud. This is amazing and we sold 100000 and ticket, though and about an hour and 200000 people and the waiting lines. So we're just seeing demand beyond any any any other historic moment. So Garth Brooks this morning, and I'm. So proud he broke every ticketmaster record and history and the fastest stadium sallow, so I'm thrilled for the crew.
But I'm more thrilled that are ongoing investment and ticketmaster and the amount of strain that that causes do.
Be the fastest selling stadium and history or and do 100000 tickets and an hour and a testament to the ticketmaster platform because the demand the box the the the the load that hits you and that ours is amazing so I'm proud of the the ticket master of teams to live room, but also the demands right now is far exceeding any of our.
Our scheduling festivals right now.
And and thanks, Michael and one more if I can just and and you smoke about the N F T impact and blockchain impact on your Ticketmaster operation from.
From the standpoint of artists potentially making more money and Ah monetizing the back catalog and whatnot does that make them become less reliant on torreon is and earnings driver going forward and your view.
And I'm not sure if that was the statement of question, but no I would say that you.
You know and I think the I think you've gotta look at the macro of pie always stripes and there's always gonna be.
Few artists that are able to sell their their business at the top and.
But if you look at the macro numbers the percentage that comes from the road the amount of artists that are dying to get back on the road, we're seeing right now greater demand and the number of from artist calling on the same when can we get back out and theater Yep.
Some very successful and wealthy artist. So we we always look at that two hours on stage of the stadium is a is a drug and and that that artist will tends to want to run for for his entire career. So we don't see any decline and that desire for that artist to get on stage.
And particularly thank the reason you see Mick Jagger and the stones on stage isn't financial at this point and deliver.
Deliver something much bigger than a paycheck. So I think that magic moment on stage and say non duplicate of before the fan and and and something that artist doesn't get at home.
Yeah, I'm looking forward to going back the shows and the second half thanks Michael.
Thank you.
[noise]. Your next question comes from the line of David Cats with Jeffries. Please proceed with your question.
Hi, good evening and thanks for taking my questions.
The.
There's been an awful lot of discussion about some of the near term demand I I, what I wonder what date of points of information or perspective to you might have about you know.
Demand beyond show. The next you know 12 or 18 months and how you think about sort of the demand curve longer term.
But yeah, I guess, you know and have you ever.
We're gonna model of that out you'd probably week you'd be thrilled that your first datapoint is the is the biggest the man and history. So I I I think however, you model that up for the next.
Yeah and then.
And I don't I don't think of you're gonna see any cliff on that the man and I don't think these consumers of saying I can't wait to get through the through 22 and then it's over so I I think this is showing and I mean look of all we always look at the I think of the most important demand curve is is the 17, the 16 and 14 year old of today X excited about going to the show and.
As as as as the as the last kind of generation right. You always get that meant that question on who's the next rolling stones, and and our data will continually show that that young artist is capable of selling out stadiums and arenas very fast I mean bad money just went on sale and sold out of arenas very fast.
Huge and Latino star. So, we're just saying you know pockets of strength coming from young artists every day, Billy eyelashes selling out instantly. So we see young artists re regenerating the the supply side, we see new 14 year olds going Crazy from P. T S. All around the.
Hello, that's the part to me is what I look at is is it still of important to a 14 year old to see from the Beatles to the role of too and thank the Backstreet to Britney Spears to Bts as of today right. So they they seem to be my 10 year old and it was excited about concerts as I.
And was when I was 10 or even more I guess, so where his face, but we we see of great young vibrant supply demand.
And the business to me, that's what you want and model and over time is it still is important to a 15 year old of today and the 20 year on the today as it was 10 and 28 years ago.
Okay, and David David and one other thing that I want and just use one of their on sales of the past month as part of your indicator. This is a supply constrained business with a lot of weight and demand out there and if you look at the past decade, and you look at how live nation when from 40 million fans of year to 100 million fans of.
A year and it was by bringing more artists tomorrow markets the more people.
And and and I'm locked out late and demand because of the desire of that Michael talked about so the.
And there's a long track record the would say.
Concerned about is that a man and gonna be there when you've got these great artists out on the road.
Agreed and if I may follow up quickly with respect to M&A. How are you thinking about sort of the timing and the boundaries and the catalyst for maybe getting out and you know putting some deals back on the board to grow that way.
Yeah, we were.
Oh go ahead.
Yeah, No I was just the I think we're we we've been looking at our current pipes, we have a good pipe that was already and and process when COVID-19 started.
Probably have you know.
15 to 20 different venues around the world that are and some level of construction of development or opening and those are on plan and will be opening up from from theatres Tampa theaters got of ongoing list of promoters and festivals around the world that we've been and conversations with and closed a couple of.
Of those recently and we'll keep doing that so we we will continue on our bolt on strategy and we <unk>.
Have been for many years to to keep bolstering, our global <unk> Foundation and opportunity markets.
Oh wait we're of gross Christmas and you know, whether it's gross gross capex or M&A and we're gonna be continuing to invest in the business.
We're obviously at a higher and higher leverage level, but we are confident and that as we continue to grow R. A y and the.
Returns and 2022 and beyond that and we'll have plenty of flexibility to continue to drive that growth.
I appreciate it thank you very much.
Your next.
Question comes from the line of Brian Sunbeam with William Blair. Please proceed with your question.
Alright, it's actually just anything and <unk> and can take care of question.
[noise] last time of year, I talked it out and tickets out there and you pay benefiting what the guidelines the timeline 30 openings that put in place when we see states like New York and out the sweet and they will start and 10 minutes classy restrictions later this month or is that they say, it's like Texas and already Actinon are you seeing this and with that change and the man here and the U S or.
Or does it need to get it done and I'm watching a lot of and what kind of of somewhere in fact.
And where were absolutely the same massive the amount of him and today's of Great. Example, we had the first half dozen shows Broadway shows have their pre sales wildly outperformed all the expectation. So just whatever it was two or three days ago, They relax and New York on sales today.
Going great Governor ball as as Michael referred to went on sale far and away. The best first day for Governor's ball. So as as every market is getting on Locke, that's telling and the fans to be comfortable going out and buying the tickets and it's consistent as we go market the market.
Great. Thank you.
Ladies and gentlemen, and we have reached the end of the question and answer session and this does conclude today's conference you may disconnect. Your lines at this time. Thank you all for your participation.
HM.
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