Q3 2022 Live Nation Entertainment Inc Earnings Call
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Good day, everyone. My name is John 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 third quarter 2022 earnings Conference call.
Today's conference is being recorded.
Following managements prepared remarks, we will open the call for Q&A instructions.
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 in the company's most recent filings on forms 10-K, 10-Q, and 8-K for a description of risks and uncertainties that could impact the actual results.
Live nation will also refer to some non-GAAP measures on this call in accordance with the SEC regulation G. Live nation has provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in their earnings release or website supplement, which also contains other financial or statistical information to be discussed on this call.
The release reconciliation and website supplement can be found under the financial information section on live nation's website at investors that live nation Entertainment Dot com.
It is now my pleasure to turn the conference over to Michael Rapino, President and Chief Executive Officer of live Nation Entertainment. Please go ahead Sir.
Good afternoon, and thank you for joining us.
Live nation delivered the biggest summer costs receipts and history and drove a record quarter. These results demonstrate the ongoing and increasing demand for live events globally with attendance at events of all sizes from clubs to stadiums.
Fans around the world continue prioritizing spend on log again, particularly concerts.
Varying economic headwinds, including inflation, we have not seen any pullback in demand.
On sales on site spending advertising all other operating metrics continue showing strong year on year growth.
With this demand revenue was up over 60% relative to 2019 with each division up at least 30% and NOI up 45% to $621 million with all divisions up at least 25%.
As we expected our performance this quarter was led by our concert business, which held 11000 cop 44 million fans across 50 countries.
As a result, we generated over $5 billion of revenue and $281 million for the quarter up 67, 44% respectively.
Relative to 2019 Q3.
Shows of all types continue having strong demand with double digit attendance growth across all venue types, including clubs theatres amphitheaters arenas stadiums and festivals.
Stadiums had a particularly strong quarter with fan count more than tripling nearly 9 million fan driven.
Driven by the global demand top X across a number of genres and audiences such as bad Bunny, the weekend and Red Hot Chili peppers.
We delivered double digit attendance growth across established and emerging markets around the globe from North America to Europe to South America, showing a long runway of global growth.
Our venue Nation Division hosted more fans with attendance up 14% relative to 2000 $19 million to $19 million for the quarter and $38 million spent year to date based on our current pacing, we expect to host more than 50 million fans at our venue Nation and Festival Division.
As we have grown the tenants. We have also continued driving greater market pricing for our concerts and now expect to transfer over $550 million of additional payments to August this year, continuing our effort to help artists get the full value from their shows.
And over the course of the summer we continue to see strong onsite spend with no reduction in consumer buying habits ancillary per fan spending was up 20% to 30% year to date in our operated venues across the U S and Europe .
The consistent theme with fans eager to enhance their experience we continue elevating our hospitality operations provide more premium options.
We still have tremendous room to expand with high quality experiences throughout our venue portfolio, which includes over 400 venues and festivals globally with almost 40, new venues in the pipeline.
And demand for live events was also clear in our ticketing business, we transact at $6 7 billion of fee generating G TV and 71 million tickets up $69 and 42% respectively relative to 2019.
This demand remained strong throughout the quarter as two of the three months, we're amongst the top 10 transacted CTV excluded refund months ever at this point all top 10 months occurred within the past year.
GDP growth was strong across both primary and secondary up 61, and 132% respectively conscious drove 80% of the growth in primary GTD, while concerts and sports together accounted for over 90% of our secondary growth.
Globally, new venue clients continue to seek out ticketmaster's service due to its effectiveness of our enterprise software platform.
Giving venue revenue combined with our leading online marketplace. As a result, we contracted 19 million net new tickets. So far this year on a global basis.
At Ticketmaster, we continue to advocate for fee transparency and live event ticketing.
We advocated for all in pricing mandate passed in New York early this year, which requires face value prices and fees to be shown upfront and can we support the FTC mandating this nationally.
We're operate ticketing marketplaces of more than 30 countries around the world and I've seen all the pricing adopted successfully in many countries when mandated across the board with only works with all ticketing marketplaces adopt together the consumers truly can accurately compare to shop for tickets.
While ship had its biggest quarter ever following our previous record last quarter driven by the strength of our festival in online partnerships.
Our performance drove a 226 million 56% higher in 2019.
Our sponsorship revenue growth has been broad based with North America up 48% and international up 93%.
Strong demand, both onsite and online up 64%, 63%, respectively. This year.
And our unique scale live events platforms continue to attract new brands and expand relationships with current partners.
Festival sponsorship has been our largest growth driver to date as we are effectively leverage record festival attendance. This year and compounded this growth with double digit increases in per fan sponsorship.
Platform integrations have been a great growth driver with online partnerships as we continue to drive value and monetize opportunities by ticketmaster's purchase process with non service fee revenues up double digits relative to 2019.
Clearly 2022 has been an incredible year of returning to live events and we expect to finish strong ticket sales for concerts. This year were up 34% for the quarter and now stand at 115 million tickets sold for the shows this year up 37%.
And more importantly momentum is strong with early signs pointing to continued growth in 2023 across our businesses.
Ticket sales for shows in 2023 are pacing, even stronger than they were heading into 2022 up double digits year over year, excluding sales from rescheduled shows.
And our sponsorship business confirmed commitments for 2023 are up 30% from this time last year, showing the resiliency and long term commitments the brands have for our business.
Beyond these specific leading indicators going into 2023, we expect we will drive growth in our concert business by adding more venues to our portfolio continued increasing ancillary profound revenue and further on our efforts to deliver market value for the shows to the artists.
And in ticketing, we expect to also benefit from these market pricing trends, while continuing to globally at new clients to our world class platform.
With that I will turn it over to Joe.
Thanks, Michael and good afternoon, everyone.
With last quarter 2019 is the best comparison for us in terms of understanding our results. So most of our discussion will be relative to Q3 of 2019.
To accompany our reported revenue of $6 $2 billion for the quarter was $2 $4 billion better than Q3, 2019 or an increase of 63%.
On a constant currency basis, our revenue was $6 4 billion for the quarter.
So there was roughly a 3% impact due to strengthening of the U S dollar.
This was a record quarter for revenue for the second quarter in a row and bested our Q2 figure by 39%.
And our reported AOI of $621 million for the quarter was $194 million better than 2019 up 45% and led by an improvement of over $86 million in concerts and $81 million in sponsorship.
On a constant currency basis, our Q3 was $645 million.
The FX impact of negative $24 million or 4% was largely driven by the devaluation of the euro and the pound and.
And year to date, we have converted roughly 76% of this AOE to adjusted free cash flow of $996 million.
Let me give a bit more color on each division and then I will give you more on leading indicators.
First in concerts or AOI was $281 million for the quarter, which compares to $194 million in Q3 of 2019, an improvement of 44% U S concert strongest quarter ever far surpassing the previous record of $200 million.
In Q3 of 2018.
Stellar summer season for concert, we had over 44 million fans in the quarter. The most ever growing 40% compared to Q3 of 2019, when we had close to 32 million fans.
Looking a bit deeper at our fan metrics stadium attendance more than tripled to $8 7 million fans in Q3 of this year and festival attendance was $6 5 million fans in the quarter up nearly 40% from Q3 of 2019 with premier events, including rock in Rio rock character reading and Lollapalooza.
Pricing has been a key part of our strategy in 2022, capturing market pricing for the best tickets, while maintaining an affordable entry point for all fans.
For tickets sold to shows that our amphitheater as arenas and stadiums globally. This year front of house pricing increase for each by double digits relative to 2019, while starting prices for all shows in the U S rose to 6% and remain under $35 on average.
And giving you more details on ancillary per fan revenue by venue type.
U S amphitheaters ancillary per fan revenue was $38 an increase of $8 per fan over 2019 levels were close to 30% growth.
At our major festivals globally increased spending on concessions camping and VIP experiences drove ancillary per fan revenue up by nearly 30%.
And at our theaters and clubs in the U S and the UK ancillary per fan revenue increased by over 20% driven by higher concession sales fast Lane entry neither show upgrades and then move to cashless payments.
On the cost side as indicated before increases continue to impact us primarily in the venues, we operate amphitheaters theaters and clubs and festivals, but in all cases, we are delivering double digit growth in profitability per fan due to increased ticket sales and ancillary revenue.
Next ticketing had another successful quarter delivering $163 million in NOI, nearly 30% higher than Q3 of 2019.
Q3 was our top quarter ever in terms of reported ticket sales in GTA V and it was our second highest quarter ever in terms of transact at ticket sales and GTP behind only Q2 of this year.
When we look at the year to date performance of our ticketing business the numbers reflect the incredible demand we've had.
Through September 30th.
So the 197 million fee bearing tickets up 38 million tickets or 24% compared to 2019.
G television for the first nine months is $19 billion up $6 3 billion or 49% compared to 2019. As a result revenues are close to $1 6 billion for the first nine months of the year, which is up almost $500 million or 45% compared to 2019.
And with all this we drove a $600 million of 71% as we deliver strong operating leverage.
Across both sporting and concert events ticket buyers continue to prioritize purchasing the best seats available.
Driving a 17% average price increase in the primary market year to date relative to 2019.
Secondary pricing has risen by 10% on average with sales volume up as well with these increases the average secondary ticket price in the U S remains almost twice that of a primary ticket demonstrating additional opportunities for market based pricing as well as a large buffer from any demand shifts.
For those of you focused on margins as we've indicated previously it's difficult to evaluate based on a single quarter Q3 margins were impacted by our mix of clients and shows along with technology investments. All of this is as expected and in line with our full year margin expectations in the high <unk> as we have been indicating over the past few quarters.
Finally growth in our high margin sponsorship business continued this quarter with revenue up 59% relative to Q3, 2019, and now up 64% year to date.
We once again had high growth in both onsite and online sponsorship driving record Q3, AOE of $226 million, 56% higher than our Q3 2019 and Hawaii.
Looking back at sponsorships growth through the first nine months, we have seen our festival business nearly double in our platform integrations more than double.
Our strategic multiyear multi asset sponsors now generate three quarters of $1 billion in revenue for us.
Back in 2017, we have 56, such clients representing approximately two thirds of our total sponsorship revenue today.
Today that number has grown to over 100, such partners that account for 80% of our revenue growth in both the number of partners and the level of their spend which demonstrates the value we deliver and the importance. They place on our unique onsite and online scale platforms.
As we look to the remainder of 2022, starting with our leading indicators through late October all relative to 2019.
Concert ticket sales are over 115 million tickets for events this year up 37% and 20% higher than our full year 2019 fan count.
Second ticketing has sold over $200 million primary fee bearing tickets for events. This year up 27% relative to 2019 at this point.
Of these 135 million tickets or for concert events, which is 38% higher than 2019.
Related to this we had $1 $9 billion in event related deferred revenue consistent with our levels in Q3 of 2021. Despite the deferred shows in last year's numbers, excluding deferred shows from last year's numbers.
We would be up 35% year on year.
A few other points on 2022, given our presence in the UK and mainland Europe , we've experienced FX headwinds and through the end of September our Oi has been negatively impacted by $47 million.
Thank you Sir at this time, we will now be conducting a question and answer session.
I'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two if you would like to remove your question from the queue and for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
One moment, please pull for questions.
Our first question comes from the line of Brandon Ross with <unk> Partners. Please proceed with your question.
Hey, everyone.
At this point most investor focus is on 2023, so I wanted to dig a little more there.
And I know, it's hard to determine the demand side for the full year, but can you speak maybe quantitatively and qualitatively about the supply side for next year I think last year, you gave that kind of top touring acts for the year ahead, and what that looked like year over year, how is that trending.
What's your view on the quality of the supply next year versus this current year.
I'll start on the quality.
We're seeing a really good good pipe for next year I would say there would be no no difference in 'twenty three to 'twenty two in terms of quality. If you were a stadium act a large selling Arena Act.
Probably debated whether you went out in 'twenty, two or you went out in the 'twenty three so.
Lots of great artists in the pipe.
Clubs to stadiums to arenas it'll look like a similar year in terms of quality.
Second piece.
Yes, just a few other specifics as Michael said, our sales for next year are up double digits and if you. If you want to take these three so called quality references where most up in stadiums, which by their definition. It can be the largest startups that can sell the most tickets. So that would indicate we're off to a good quality start the other.
If we look at tickets sold per show that we have on sale for next year.
From amps arenas stadiums festivals in all cases, our tickets sold at beyond sales are up relative to what they were at this point last year for 2022 shows so I think those are.
All good indicators of both the breadth and the depth of the supply that's going out.
Great and then keeping on 23, you said your book sponsorship.
Think up 30% year over year, and that's kind of a different story than we're hearing across the AD and sponsorship universe have you seen any recent slowdown there and why generally do you think your trends in sponsorship are different than what we're seeing.
Yeah, we haven't seen any slowdown I think its different pools of money it's different strategy.
Sponsorship relationships with us or not decided week to week month to month based on what they are trying to get out of performance marketing. These are long term commitments by major brands. Michael gave you. The stats, it's really being driven by these big multi year multi asset multi million dollar relationship. So we're.
Up 30% with over half our book of business for next year already filled and not seen any slowdown.
So we're feeling very comfortable with it.
Yes, Brandon for comparison.
If the NFL was a public company, our NBA Im sure Dell would be reporting record sponsorship also.
Alright yourself in that league right you.
He is not having any pullback if you've got a scarce commodity like a.
Beyond say two or an NFL game those are still very rare.
Pieces of business that you want to be associated with.
And they have longevity to them. So we haven't seen any slowdown tuck into the NBA.
NFL, we havent seen it over there either so I think those are the comparable for you.
Okay, and then just finally on the regulatory front, there's noise is kind of their oasis.
What would I know you went on the offensive on the ticketing transparency, but what would be the fallout. If there are changes to that law for you and is there any other potential pressure regulatory pressure that youre seeing.
Or otherwise contending with right now.
Yes, we don't believe there will be any impact whatsoever. If there was a nationwide mandate for all in pricing. We think it makes sense just has to be done collectively at the same time.
Look back and you listen to the comments the comments, we're all about transparency, which is really all in pricing commentary was not about.
Fee levels or any of the other issues that some people have brought up that spend looked at and we feel comfortable with what are what our business model is in that regard so.
I think that will work with the FTC will work with the DEA and the state of New York, and we're very supportive of that and some other shifts to make ticketing and more transparent and a better consumer experience.
Just a couple of points to jump on wheat.
We tend to do better as regulation comes into play in this space.
All of our business has been chasing the secondary business for years.
Unregulated.
We would love spec selling to be outlawed love better rules on bought ticketing, we'd love all in pricing.
We're hearing to all in pricing in New York right now I think we're probably the only ticketing company actually adhering.
To those regulations right now so we like sunlight coming to the business. The most part of the business has been on regulated in most of the noise is generated from the secondary business.
He loves that we'd love regulation puts us on an equal footing ground right now in our secondary business, we don't do spec selling that's probably 30% to 40% of what inventory sits on secondary sites, we don't price below face value.
So we actually operated at a disadvantage right now because we are operating a higher standard. So we had a lot more transparency, we'd love to have the fees more transparent upfront all in pricing. We just have to make sure everybody plays by the same rules, but we're gonna lead those those those pieces as far as the fees just to.
The venues to set the fee can take most of the fees. So I think if you bought if you build up.
Multi $100 million arena or stadium.
Thank you.
Your prerogative.
What is the fee you want to charge on your sports and music tickets.
We get a piece of that but those are set.
By the venue and monetize by the venue.
So just kind of some of the ongoing.
Transparency of the business, we got to do a better job of explaining.
Great. Thank you.
And our next question comes from the line of David Karnofsky with J P. Morgan. Please proceed with your question.
Okay.
Maybe I'll flip Brandon. This first question around them push on the demand side, but you.
<unk> been able to maintain NOI growth and a low double digit range over a long period.
Done that market's even at times for fan attendance has been down I know you just spoke to the supply, but given that uncertain demand environment. How do you think about some of the other factors in your control on revenue or cost that can kind of keep you in that historical range.
I'll, let Joe jump in but I, just want to make sure don't discount the supply side right.
That's like talking to Disney and saying if you only have Marvel movies, How's your demand going to be it's gonna be great.
Supply in content drives that demand. So if you've got a lot of great great quality supply.
Demand is a little easier. So I don't want you to discount that we're very proud that we work with the best artists in the World. We have the best global platform for those artists and attract them to our platform. That's what you have to make sure. Your first half. So we have the blockbusters top to bottom that's going to drive the demand now Joe will take over in terms of explaining the demand is.
Strength, so far we've seen yeah. So again just to repeat the numbers, which are the mix of supply and demand, which is that our tickets sold for the shows that we have on sale for next year are up consistently across all venue types relative to a year ago. So.
The demand is absolutely coming for the supply that's showing up now on a on a broader basis Youre right. We've consistently if you looked at 2010 to 2019, we've consistently grown our business double digit AOR 2011, we grew our business double digit NOI, while raw fan attendance was due.
So we do have a number of other levers and Michael spoke to those as part of his commentary, we're continuing to grow our venue base and fans that go to chosen our venues are much.
Much more profitable than others. We continue to have increased onsite spend we continue to have pricing as a lever which drives through both our concerts business in our ticketing business continuing to add globally Ticketmaster clients and then I've given you the numbers on sponsorship, which we think continues to be a.
A double digit growth business into the future. So all of those levers on top of the supply demand dynamic is what gives us confidence as we continue to look to our future of the growth potential.
And Joe just to jump in on that.
On the demand in terms of.
The demand is spread.
Certain thesis is that like to get spread our demand is overall concert ticket is still a really affordable ticket. Most majority of the tickets are sold or.
$75.
Although we have a great premium business that does attract a high end customer or someone that's a rapid fan our business is split from clubs to theaters to stadiums, we're seeing demand strong on all levels.
Whether it's a $19 ticket, it's filling up the clubs where the premium at the stadiums and arenas. So we do think we have something for everyone. It is a very.
Accessible ticket, even pull back time, and we're seeing that the demographic demographic of our buyer.
It's very very wide split across all sizes.
Yes, Michael sorry, just to jump back in on you.
Again counter to some of the commentary that I've heard out there. We're also we're not dependent on acts that have been around for a long time. If you look at how vibrant the new artists are I mean, I look at our top artists and we've had this year the Harry styles do a leap as Billy Irish Bad Bunny Morgan wall on the weekend.
And Olivia Rodrigo. These are all artists that are at the early stages of their career across as Michael talked about all genres. Most of those are obviously in arenas and stadiums, but these are tremendous talents that are just showing the breadth of supply that we have in our business.
Okay.
And then I had a question on <unk>.
Online sponsorship, which has really turned the quarter.
How do we think about the driver of growth here in terms of thin or traffic increases in your website or apps versus yes.
<unk>, which are more in your control like the platform integration as you mentioned and then how much room is there to grow some of these sponsorships.
Yeah. Our focus this year has obviously been on the ladder of how do we create new assets on this ticket master platform that can continue to drive the economics and then as you improve your volume of tickets or improve your site visits that's just additional growth on top of that so we view like we.
Would view any other platform.
Its own way just a counterpart to the onsite we have people's attention through a period of time, we have them going through a purchase process and all of that is something that we can monetize.
We saw great progress on the platform.
Integration is particularly around the checkout and this year, we think theres earlier upstream, we think theres advertising dollars that can still be significant that we can drive from it and we're focused much more on how do we use ticketmaster as a platform to drive its own set of non service fee revenue streams, and we think that has a long runway.
Great. Thank you.
And our next question comes from the line of Steven <unk> with Goldman Sachs. Please proceed with your question.
Hey, great. Thank you maybe one for Michael on pricing I was wondering if you could talk a little bit about some of the advice given to most artists with respect to pricing their concerts next year is your messaging more.
And then maybe theres still some opportunity to take price given the strong demand that youre seeing this year or is maybe at 23 is a year where artist needs to be a little bit more focused on selling out rather than taking price.
Yes, I wouldn't say 23.
<unk> is any different than it's been in.
In a year.
Have an incredible great pricing team a lot of data scientists that are talking and analyzing the business with our managers and agents.
There's no one paintbrush, depending what artists where you are in your cycle and what Youre demanded so.
I just saw some counts this morning for Shanghai, a Twain went off upsell today Big Big numbers out of the box is an iconic artist so you're not worried about pricing. If you are talking to Shanghai and housing prices for tour.
You're a little baby going on tour next year.
The younger demo Youre building your audience maximizing your growth isn't your priority.
Get into as many markets and fans as you can so I wouldn't say 'twenty three is even in my buyers' minds right now what is in their head is over the last few years is just better pricing dynamic strategy from day, one on the market price of different on a Friday and a Tuesday, the ILC, it's worth more than the middle the fronts always under.
Your price, we've yet to see anything.
Get close to the secondary demand yet so most of the box shows theres still going to be underpriced in the front.
So our job is to do what we can upsell the front. So we can lower the price in the back yes sell through all the way through so I wouldn't say that any artist or manager is having any panic or talking to me about demand for next year.
They know the Taylor Swift tickets verified fan that went up this week, that's probably going to break all records I mean artists are seeing the demand is there if you price it smart you've got the right markets you've been on the market maybe three four years.
We're not feeling that the demand from inflation or 'twenty three pressures that are driving strategy. It's just overall us being better at what we do today than we were last year and the year before on pricing strategy per market by artist per territory.
Got it that's helpful and then perhaps somewhat related to that secondary GTD grew more than twice as fast as primary HGTV and the third quarter and could you just comment on some of the key factors driving that outsized growth in secondary.
And is this something you think can continue in light of the pricing strategy you outlined.
Yes, I think as Michael talked to you first and foremost our strategy is to help the artists get paid market value for their show and we are spending more and more on having the people on the data to help them do that that said for a lot of reasons that he went over around how they want to build their fan base.
They want to build their brands, so they're leaving money on the table and we're continuing to see that just almost insatiable demand in the secondary market I talked about.
Average price of a secondary ticket is still almost twice that of a primary ticket. So that continues to grow and we continue to price a little bit trying to catch up to that so we don't we don't see the secondary market going away anytime soon and we're going to be active participants in it I talked a.
A lot last quarter about the fact that we believe the shift of secondary tickets has helped us because it's just eliminated friction to use us as the secondary platform to buy and sell the tickets as we get better and better with that Ticketmaster App you can manage your tickets you can sell them you can buy them on our secondary is all of that gets used.
We are an easier I think that just naturally continues to build the business with us.
Okay. Thank you.
And our next question comes from the line of Steven <unk> with Cowen. Please proceed with your question.
Okay.
Alright, thanks for the question.
Michael and Jeff can you, maybe just update us on I know you spoke earlier around the regulatory risk and concerns around an FTC regulation and all in pricing, but I think there's also an investor concerns around the Doj still and maybe just update us where things stand with your consent decree.
And maybe also touching on in relation to that.
Wins on ticket have been very strong over the last 21 months 36 million tickets. So maybe the competitiveness competitiveness of the primary ticketing market in United States.
And how you're how you see that relative to those wins and with regards to regulation.
As regards to the consent decree we have ongoing discussion we have an external monitor who we have regular dialogue with them.
Tunnel monitor who oversees everything.
We're very happy that we've got an active dialogue now which is what was lacking in the first 10 years post our merger we feel good about all of those discussions don't think theres anything structural substantive.
That.
We're finding it's inconsistent with the message that we send all of our people, which is these are independent decisions on promotion and ticketing to shouldn't be tied together so.
We feel good about that process that we have we have with them as we look at Ticketmaster I think it's continuing to be successful because it's a very effective platform I think if you look at.
Again, we've talked a lot over the past few quarters about because of our.
Continually improving and high quality platform, both for the enterprise side as well as the customer side, particularly internationally that's differentiated in driving a lot of wins internationally North America, where it's more of a mature market you need to be able to compete on price. In addition to features.
And I think our business has shown that we can continue to scale that grow it and do so very profitably.
Thanks, Joe if I just have one more follow up here on industry publications have reported a trend of tickets for top tier asking.
<unk> demand and then the lesser known and emerging artists are struggling I know you had some commentary today, where that wasn't the case, but as you look out over the next 12 months or so.
Does that are you seeing that potentially an impact on your business or trend and maybe you can you just talk about both of those segments of artist and a recessionary environment and how they would hold up the high end top tier <unk> relative to the emerging artist and lesser known ones. Thanks.
Yes, just on a macro level.
This is a business that overall, we don't win.
Most shows don't sell out.
Most of the majority of yourselves don't sell always room for a few more tickets to be sold.
So although the press always talks about the expensive tickets are the sole about ticket that's not your real business, you're a real businesses.
Night and day theater clubs amphitheaters arenas selling selling those tickets night by night. So most most most tours ultimately do well in the end artists makes money and we make money. There are some tours a small percentage, but just don't tell on up ticket the demand isn't there.
And the tour either gets cancelled or the promoter and the artist lose money. So you may have seen some of those publications, where they want to grab those six tours or some that didn't make money and then try to extrapolate something larger so I just don't see that trend. We did over 8000 club shows last year and 95% on it.
Going to <unk>.
Money and do well and the artists will deliver those 400 tickets or 1100 tickets as they're building their business and they are on their on their costs are associated with it was a tougher year for all over the industry is the supply chain challenges labor, everyone getting back to work get into security guards.
<unk> costs were up this year.
So that would have affected.
All artists on the road relative to revenue, but those things are have worked their way through the system.
I don't I don't see any trends emerging or younger artists.
Having any harder time than any young emerging artists.
When theyre, taking those risk building their businesses on the way up.
Generally majority youre going to be okay in terms of sell enough tickets paying the bills and building their business. So we don't see any trends on the bottom end.
Any new trends that would suggest that the club and the emerging artist space isn't growing as more clubs opening up all the time lots of demand in every market lots of lots of options for artist play.
506000 seats.
Just know from our our venue portfolio on the demand.
On opening up and building theaters and clubs is bigger than ever so that demand wouldn't be driven if the sip.
<unk> wasn't there.
Thank you Michael appreciate it.
And our next question comes from the line of Peter Zaffino with Wolfe Research. Please proceed with your question.
Hi, Thanks for taking the question first on Taylor Swift I, just wanted to say that my 16 year old daughter, and I are signed up for the presale and we would very much appreciate your support on the 15th of the month.
Moving on in the press release you highlighted.
That growth in your concert business in 'twenty, three will come from adding more venues to your operated portfolio and increasing ancillary per fan revenue. So we didn't see any mention of fan growth and then in the discussion today. We've obviously heard a lot of talk about a robust first half of 'twenty three and so if you'll forgive me kind of picking up there.
23 topic again, I'd love to understand how much visibility the company has into the second half of the year I think booking cycles for the Big Bang user.
To nine months out so that's one question.
One was just.
As strong as you're a fan growth has been this year does this change how aggressively you might go out and invest in new venues, possibly larger ones even ones outside of the country. Thanks, So much.
So just technically Peter just to answer your first question I think the way that we've laid out the story in the release and then Michael talked about it is first you talked about the fact that ticket sales are up he talked about the sponsorship growth and then you said in addition to those there are a number of other levers that we have to continue to grow the business. So.
I don't think you've ever said anything et cetera, we werent.
Fan growth didn't come into this.
At this point looking at 'twenty three yeah, we've got some of the.
Stadium, as we talked about high growth and arenas some of that booked it's still somewhat early for the second half of the year, but macro in terms of our pipeline for next year. It would account for more fans than we had going into this year. The hard part that we have is just sorting out because of the shows that we're rescheduling.
Trying to figure out how many of those were naturally flowing into this year versus not.
But we're feeling very good about the attendance levels for next year.
I'll talk about the venues.
Yes.
On Joe's point, where were works out to be sitting here.
We knew the thesis that you could sell on was that there was an air pocket, we heard that comment a lot 23 was an exceptional year.
And it was 22 I mean, many exceptional years the idea that we were able to grow this business for so long on our by double digits.
Our high single digits on our fan base and then to have a year like 'twenty two when you blow the doors off it and now that would be able to sit here and say and we think we will still grow on top.
Very proud of our business and our outlook given the headwinds.
Right.
And the size of the gains we had this year so.
We are looking into now.
And that and how we keep growing the business.
Forward venues I've laid out over the last year or two we think it's a great business, we have 300 in our portfolio.
It's a great way to obviously maximize that live event fully when your vertical so we like our global pipeline. We have right now we're seeing a lot of white space, where our content can help drive that business case from arenas to Apple theaters to the big Big Ballrooms and theaters, so you'll continually see us adding.
As we have been over the last many years to that portfolio.
Thanks, Michael Thanks, Joe.
We have time for one final question from the line of David Katz from Jefferies. Please proceed with your question.
I made it under the wire thanks for taking my question.
In the past you've talked about.
The evolution of digital ticketing and I know there was some commentary I believe in the in the spending.
To that end and update on sort of.
How thats progressed, where it is and what we might expect in the near term and longer term would be helpful. Please.
Yeah, I think digital ticketing and at this point is nearly ubiquitous in North America. It has grown rapidly internationally still year or two behind I'd expect us to be pretty much there sometime between next year and maybe the year after just depending a bit by.
By market and as its gotten established it's already helped us in a number of areas I talked about secondary a few minutes ago. So we're seeing some direct benefits as we continue to improve the ability in terms of how fans fans manage their tickets I think you'll continue to see more products get added on to the app.
They continue to improve what the fine how the fans can manage their tickets.
And then it sets us up for the advertising and Upsells that we've been talking about and we now have enough scale. We started doing some things this year at scale working with sponsors who wanted to deliver value on site to our fans working with.
The concert side of the business to enable direct up sells.
All of those features that come from having a direct connection to the people actually attending the shows will be a key focus for how we continue to drive our sponsorship business over the next few years.
And there is a sort of clear quantifiable.
Earnings benefit where the rubber meets the road from that correct.
Yes, and I think you see part of that as we talk about what is our non on Ticketmaster, what's our non service fee revenue that we're driving in the fact that that's up double digits from 19. This is all a part of that.
Understood. Thank you.
Thank you I would now like to turn the floor back over to my closing comments.
Thank you everyone.
See you at our Investor.
Their day and Liberty in November .
Like our website for more detail.
Yes.
Yeah.
Thank you everyone. This does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.
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Got.
Got it.
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