Q4 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 fourth quarter and full year 2022 earnings conference call.
Today's conference is being recorded following management's 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.
Fillings, 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.
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 Rex.
Filiation a website supplement can be found under the financial information section on live nation's website at investors Dot 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 in 2020 to fans around the world continue to prioritize their spend on attending live events, particularly concerts.
Our research consistently tells US the concert is our top priority for discretionary spending and one of the last experience its fans will cut back on them.
We're seeing this play out in both our 2022 results in early indicators for 'twenty three.
With a strong demand last year in the <unk> business, you had 121 million fans attend our shows across 45 countries.
Well typically we help connect 550 million fans with their favorite artist teams and performers.
This case is the majority of our growth came from international markets further reinforcing the global nature of untapped fan demand and the opportunities we have for growth as we help artists reach more fans with their likelihood.
Before getting into details on our division just to note that 2019 is the best comparison for us in terms of understanding of our results for most of our metrics will be relative to full year 2019 can call search. Despite many markets still closed for part of last year, we grew attendance by 24% to 120.
1 million fans at 44000 of them, which drove revenue up 43% to $13 5 billion.
This growth came from all markets and venue types every venue type from clubs and theaters to stadiums to festivals had double digit attendance growth.
We invested $9 6 billion, putting artist shows on in 2022, working with largest superstars to artist just getting started and all of those in between.
This is up 45% and further reinforces our role was the largest contributor to artist income.
As part of this we help shift 700 million to artists with more market value ticket pricing.
Even as the entry price to show stayed below $35 in the U S.
Typically 90% of ticket sales for live nation shows go to artists. This.
This is particularly important as artists are increasingly reliant on touring as they get much smaller Rev shares from other music revenue streams.
Part of our fan growth continues to come from the venues we operate globally.
And almost 50 million fans in 2022 with international markets again, delivering the majority of our growth.
And a venue nation, we continued our focus on elevating the fan experience and providing a range of options for enhanced products and services.
As a result last year, we grew our average revenue per fan by 20% at all venue types.
And ticketing our strategy for success to Stifel, We focus on developing a leading software for venues to ensure we deliver the best enterprise platform, we invest tens of millions of dollars every year to continue innovating every aspect of ticketing technology products.
Artists other venues largest clients and we are regularly BNS to create new products to help address their ticketing needs.
Our innovations are products, such as verified fan decided to help artist cut down resale and we've seen this used successfully for over 400 tours, including the most recent on sales for beyond say, Madonna and Morgan wallet.
Generally verified fan on sales of approximately 5% of inventory and upon resale sites versus 20%, 30% that is typical for non verified fan on sales.
Venue on the artist clients achieve results in the ticket sales, which is the large part by so many vendors choose to work with us.
Looking at our 2022 results, we grew fee bearing ticket volume by 28% to $280 million, which in turn drove our fee bearing <unk> up by over 50% to 28 billion across 38 countries.
As a result, our ticketing revenue was $2 2 billion up 45%.
Along with these results for the year, we signed 23 million net new tickets in 2022, 70% were with international clients and a stage for continued global growth.
And our sponsorship business, we have seen that brands are as eager as fans to reengage with platforms in 2022.
<unk> hundred 20, large strategic sponsors globally across our businesses, 32% more than we had in 2019, including brands such as Paypal Copa Hulu and staff.
These large partners drove over 80% of our growth with overall revenue up 64% to $1 billion.
As with concerts and ticketing our international markets led this growth with international sponsorship NOI up 7%.
Looking ahead to 2023 and so we now have many of our 2023 shows on sale. We continue to see strong consumer demand globally with no sign of any slowdown.
We have four key leading indicators at this time of the year all pointing towards another record year, even greater success in 'twenty three.
First our deferred revenue at the end of 'twenty, two was $2 7 billion up 125% from 2019, and 18% from 2021, which benefited from a high volume of rescheduled shows.
Next as of mid February ticket sales for our shows this year exceeded 50 million fans up 20% from this point last year with international growth at 25%.
And our global ticketing fee bearing <unk> TV is up 33% to $9 8 billion for the same period.
And finally over 70% of our planned sponsorship activity for the year is confirmed again up double digits relative to this time last year.
Before I turn over to Joe I want to comment on the regulatory environment and industry reforms on the regulatory front.
Ticketing industry, it's more competitive than ever and our market share has gone down not up since the merger.
Because of the competitive bidding process and use regularly take more of the economics on every renewal.
And keep a majority of the service fees.
Finding the extended consent decree related to the Ticketmaster merger.
We remain in constant conversations with the Doj monitors and do not believe there have been any violations.
On particularly in reforms, we believe the greater transparency on the entire ticketing ecosystem will improve the industry and we've been engaging with policymakers to advocate for reforms.
The biggest challenge facing the industry as a chaos at the yard sale.
<unk> can't get the ticket, but the price the artist set yet they see pages of secondary sites with tickets five times face value because of sculptures.
It has been a big topic in the industry and conversations that the Pulsar Live conference. This week focused on how to protect the connection between the artists and their fans.
To help drive progress lots of Fair Ticketing Act, which says artists should decide resale rules.
Speculative tickets should be illegal.
The scope of the box act should be expanded and enforced.
And the nice to be industry wide all in pricing to fancy the whole cost they are paying upfront.
Artist create their music and their cockpit, it's only fair that creator ticket rules to we will always be on the side of the artist who has the best advocate for their career and their fan base with that I will turn the call over to Joe to take you through more details.
Thanks, Michael and good afternoon, everyone.
The uniqueness with our seasonality in 2022 after emerging from the pandemic I will largely focus on our annual results.
And as with prior quarters 2019 is the best comparison for us in terms of understanding our results.
So much of our discussion will be relative to full year 2019.
For the company and our reported revenue of $16 7 billion for the year was $5 $1 billion better than 2019 or an increase of 44%.
On a constant currency basis, our revenue was $17 $3 billion for the year.
So there was roughly a 4% unfavorable impact due to the strengthening of the U S dollar primarily against the euro and the pound.
Our reported Oi of $1.407 billion for the year was also a record for the company or $165 million better than 2019 up 49% led by an improvement of $345 million in ticketing.
And $226 million in sponsorship.
On a constant currency basis, our full year <unk> was $1 $464 million FX.
The FX impact was negative $57 million or 4%.
And we've converted roughly 69% of this AOE to adjusted free cash flow of $967 million, leading to a year end free cash balance of nearly one $8 billion.
Net income for the year was also a record at $296 million $226 million better than 2019, resulting in earnings per share of <unk> 64 cents.
Let me give a bit more color on each division.
First in concert so we had the most concert fans ever with 121 million fans attending our shows in 2022.
24% compared to 2019, when we had close to 98 million fans.
Show Count was 43600 events up 8% compared to 2019 with more fans per show due to a heavier mix of stadium and festival events.
As a result, our concerts revenue for the year grew by 43% to $13 $5 billion, while we delivered $170 million of ally.
Looking a bit deeper to our fan metrics, we had strong growth across the board.
<unk> attendance more than doubled to $18 4 million fans. This year up from $7 8 million fans in 2019.
Festival attendance was $13 2 million fans for the year up over 30% from 2019 with premier events, including rock in Rio in Brazil rock furniture in Belgium ready in Leeds in the UK and Lollapalooza in Chicago.
Arena Amphitheater and club and theater attendance were all up double digits.
And finally, our international fan count grew by nearly 50% in 2022.
By a tremendous outdoor season in the U K and across mainland Europe , and very strong growth in our South American markets as well as the addition of <unk> in Mexico.
Giving you more details on ancillary per fan revenue by venue type and our North America amphitheaters ancillary per fan revenue was $37 an increase of $8 per fan over 2019 levels are over 25% growth.
And our major festivals globally increased spending on concessions camping and VIP experiences drove ancillary per fan revenue up nearly 30%.
And there are theaters and clubs in the U S and the UK ancillary per fan revenue increased by 20% driven by higher concession sales fast Lane entry neither of show upgrades and then move to cashless payments.
As we have discussed in past quarters.
Had some headwinds associated with labor and supply chain cost pressures at venues, we operate notably amphitheaters and festivals as well as costs related to the reopening of our international markets during the year.
Despite this we still increased our per fan profitability, taking into account our company wide revenue streams for fans attending shows at our venues.
We have seen these pressures subside in recent months and do not expect the same level of impact in 2023.
With this along with our ongoing revenue initiatives and continued cost focus we expect to continue to grow per fan profitability in 2023.
Next ticketing.
The numbers reflect sustained fan demand for the live experience in 2022, we sold $281 million fee bearing tickets up 28% compared to 2019.
It was the first year that our fee bearing ticket sales exceeded non fee bearing ticket sales.
As we continue to build our global non sports client base, particularly in international markets.
With this increased ticket volume G television for the year was 27 $5 billion up 54% compared to 2019.
<unk> continues to be largely a primary ticketing business the secondary ticketing accounting for only a mid teens percent of our overall G. T V.
With this activity level revenues or over $2 $2 billion for the year with Oi of $830 million.
As we projected last quarter, we delivered full year margins in the high thirty's coming in at 37%.
On the pricing front average ticket prices in primary tickets rose by 17% compared to 2019, driven by fan demand for the best seats Premier concert and sporting events.
Secondary ticketing pricing also rose by 12% on average and so the average secondary ticket price in the U S remained more than double that of our primary tickets.
This shows the extent to which concerts and other live events for me.
Price below market values.
We also saw revenue from non service fees grow double digits as we further build ancillary revenue streams, including insurance upgrades.
Other upsells.
Lastly, as Michael noted, we signed 23 million net new tickets and expect these client wins will help drive an increase in fee bearing tickets sold for this year.
Positioning us for ongoing growth.
Before leaving ticketing I wanted to add a few comments on the regulatory front that Michael spoke to.
Been a lot of discussion lately about so called junk fees.
We tend to get thrown into that conversation because the compensation to venues to help run their businesses and the ticketmaster to distribute tickets.
Separately called out as a service fee instead of embedded in the price of the ticket.
Very few people understand that and even fewer understand that most of the money goes to the venues they.
They think that service charges are just arbitrary add on the ticketmaster pockets, which is not the case.
We agree that real drunk fees hidden charges attached the goods and services that obscure the true price should be illegal.
As one of the reasons, we're advocating for legislation mandating all in pricing with a consumer first sees the total price here she is going to pay.
As well as the breakdown of any fees.
There are a range of other policy points that we're advocating for it because we are strong proponents of artists and content rights.
But none of these have a direct material impact on our business.
Finally, it was a record year for our sponsorship business with topline revenue of $968 million up 64%.
Our AOE for this high margin business was $592 million up 62%.
Looking back at sponsorships growth during the year, our festival business increased by 75% and our platform integrations more than doubled.
Once again, we had high growth in both onsite and online sponsorship of 61% and 64% respectively compared to 2019.
Our international markets had an exceptional growth rate this year with <unk>, increasing by over 70% compared to 2019.
Due to greater festival activity across Europe , and our expanding business in South America and Mexico.
You are there points on 2023.
While it's still very early in the year based on current FX rates, we project very little impact on our revenue and NOI this year less than 1%.
We expect capex to be approximately $450 million. This year with two thirds on revenue generating projects, including new venue builds and renewals as well as other organic investments to support our growth.
This is slightly higher relative to the past few years.
As we come out of supply chain constraints and generally tight spending controls.
However, as a percentage of revenue this is well within our historical range and consistent with our growth trajectory.
We ended the year with $2 $3 billion of available liquidity between free cash an untapped revolver capacity, giving us sufficient flexibility to continue investing in growth.
As Youre aware in January wish you had $1 billion principal amount of 308% convertible senior notes due in 2029.
Part of that transaction, we then developed a hedge to increase the effective convert price to $144.
We use roughly half the net proceeds to repurchase the two 5% convertible notes that were due in 2023.
Meaning we expect minimal dilution from this convert offering.
We're comfortable with our leverage over 85% of our debt is at a fixed rate with an average cost of debt of roughly four 7%.
<unk> well in this interest rate environment.
In addition, the majority of our debt is long dated and nothing is maturing within the next 18 months.
Given that we're at the beginning of the year, we wanted to provide with more guidance on a few line items below Oi, which impacted our earnings per share calculation.
We anticipate the noncash compensation will be largely in line with 2022 and acquisition transaction expenses will run about two thirds of last year.
As we continue our global expansion, we expect depreciation and amortization to grow by approximately $50 million for the year evenly phased amongst the quarters.
Given our recent financing and interest expense will increase to approximately $90 million per quarter.
We're projecting accretion to be about 25% higher than last year, resulting from stronger forecasted future performance at a number of our joint ventures.
And we anticipate that NCI and income tax expense will grow in line with ally.
With that let me open the call for questions operator.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue. You May press star two if he 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.
Please.
One moment, please while we poll for questions.
And our first question comes from the line of Brandon Ross with light shed partners. Please proceed with your question.
Yes, thanks for taking the question.
You laid out.
Scripps in for solving many of the structural issues in ticketing today.
It's a lot of elected officials and fans to think your way too big Spike This slipping share that you highlighted.
And.
I wanted to know why are bulkier ticketing and promotion business, so dominant and why wouldn't a more competitive industry solve any of the issues at hand with the ticket buying experience.
Thanks, Brandon, It's Joe I think.
When you look at our business our business in both concerts and ticketing.
We have been successful because they very effectively serve their constituents. So on the concert side I mean, if you go back 10 years, we and AG were roughly similar size. We've had a very focused strategy of super serving the artists, which has led to a lot of success in terms of continuing to work with.
The artist and ticketing.
We have the best product out there full stop.
Michael spoke to why it is we've been effective continuing to work with a large number of venues because we have the best software platform for them and we work with them to develop tools and products for artists who are their key constituents for and figuring out where they're going to be touring so.
No.
I I don't it's hard to answer your question with you know where would we be if we didn't have someone who developed such great tools for the venues and such and serve the artist. So well I think we would have a smaller industry I think we have consistently grown the industry through our approaches to the business.
And overall the ecosystem is better for it.
Okay, and then you talked about the amount of junk that's been ticket.
A huge concern of I think.
And regulator.
The amount.
So the percentage of fees that go into ticket. So can you get a little more granular on why ticket prices are so high what percentage of the fee goes to you and what is called John and then you have these growing junkie.
Giving venues are bigger and bigger and now there's the consumer and regulatory pressure why shouldn't investors be worried about the sustainability of the Ticketmaster and live nation.
You take it as we look to the future.
Yes.
First correction. These arent chunk fee strung fees are low value hidden fees show up later this is a our version of the markup of the bass wholesale price of the product that's shared by us in the venue. So it's no Amazon collect 50% of the retail price.
Apple clock, 30%. So this is a version of the amount of the money that goes the venue for the services. They provide ticketmaster for the services. They provide so it's not junkies.
You said as the majority of the fees go to the venue and typically when you renew with venue because of the competitive nature of the bidding process more of the fees goes to the venue.
I don't think it makes much sense for us to give exact breakdowns. Because then obviously everybody below the average in the next discussion once they get to be above the average and so.
Very commercially wise move for us to give those specific numbers, but generally that's been the trend and that's what's been happening the venue sets the fees and the venues costs have been going up service fees have been going up I think it would be a very unique situation, where you would tell the building what their fees could be.
I think it's more likely you got all in pricing, where they see the total cost upfront quite transparently.
And frankly, if you were to cap fees, but what ended up happening is you then have increased rent and other costs for the artist would go up because of the venue needs to recoup their costs as part of the overall ecosystem.
So you are saying.
Ticket prices or ticket fees were regulated than ticket prices would just stay the same because they would just be passed on.
It was very thoughtful but thats what happened.
Got it okay. Thanks Historic historically Brandon.
There was a division on what the artist was charging to the consumer and then what were the added revenue streams are fees that we're going to be added on top of that.
And it's kind of in church and state historically.
But now as you know we've said it many times the artist takes most of that ticket.
C pace.
So the way that the venue the promoter the ticketing company are in there.
New fees, it's true that extra fee, a you're right we'd love, we would love Tomorrow just to make it all in pricing. So the consumer is very clear from the beginning that to go see the true cost of the show is at $25 50, because thats, how all of the participants need to be participate for that show to happen now.
All if someone said you know what was $25 fees you shouldnt have them well then the venue would say okay artist the rent isn't 50000 anymore. It's a 100000 and the fees would add up and then all of a sudden that ticket price wouldn't be 25, it would be 50 on a face value.
It is an efficient and thats why we are a big proponent of all in pricing and all our pricing at the beginning of the process, which you don't see right now in most companies other than ours. So we believe that we all want to know what the what is the true cost to see the show when I start shopping.
Wish that would be mandated tomorrow across the board that would relieve a lot of distress.
<unk> perception that this magical extra fee added on.
But that is not.
Kind of part of the overall show cost.
Got it thanks for the explanation.
And to your point on live nation owned operated just to hammer that point home.
To your point is right if tomorrow someone said you can't charge, 20% service fees on your amphitheater has to be 10, well then the $75000 house not rent that we charge artist would be 100000, right. So we couldnt, we wouldn't absorbed the costs will start to pay staff.
Capital one the building.
So we have to find the revenue and the other other means.
The true cost of going to the show and making the show happens is at the full price OLED, we just need to now market that upfront better.
And the next question comes from the line of David Karnofsky with J P. Morgan. Please proceed with your question Hi.
Thank you Michael I think over the years, we've become accustomed to seeing some level of criticism again live nation or Ticketmaster from politicians trade press social media, that's certainly elevated lately, though so I wanted to ask what actions, we should be thinking about taking to be more proactive in managing.
The public perception or your relationship with lawmakers that could maybe help limit what's become a periodic concern for investors.
Yes, it's a great question.
First.
One of them.
Look at where is the.
The drama that gets created.
If you kind of zoom out.
$550 million tickets last year.
About $540 million of those were happy customers that were seamlessly delivered.
About 10 million of those are five tours historically, a year had this incredible demand with supply demand is out of whack and it creates lots of attention.
The customers and Thats kind of always kind of been the historic challenge in the business.
And live nation Ticketmaster historically, we've really been a BTB business are taking a master job is to service then you're on a concert job is to service the artist and we've done a fabulous job building those businesses and having very very happy customers and part of that.
Proposition historically has been to take a bit of a heat at the front end when the ticket prices are high when the service fees are high if the demand supply is out of whack Ticketmaster has historically been the one that's taken the punch or the ticket seller in general if you look at all ticket companies all their NPR scores are all kind of the same.
There's only two customers as Fred Rosen Painlessly said, the one that got the ticket that's happy and all the ones that didn't are pissed off right. So you never always you can never kind of make this is an industry, where there's just not enough inventory to make everyone happy.
We've lived that historically.
But absolutely we've got it now start adjusting to on our B to C side, we've got to get much more lean forward on our government relations and our PR side.
We've historically not had a big incentive.
Shout out loud the venues are charging high service fees or artist costs are expensive.
That hasnt been a big business incentive to date.
But I think now education is Paramount we've got to now go out and do a much better job.
I think policymakers some consumers understand how the business does operate and how we all.
Or have a hand on the wheel and we've got all probably do a better job going forward.
One of the real challenges that I think is kind of highlighted this this core problem right for 40 years, there's always been a show with not enough tickets.
Fan was unhappy obviously in the last while I think what's kind of set the nuclear chaos on this on sale as the secondary business you think of what happens on those four or five big demand towards the year.
That passionate fan, which is the hallmark of our business. Thank God fans are passionate they are more passionate both the artist relationship than they are sports or anything else. They are committed and they want to see that artist at all cost now.
Now what's happening is you put it you announced and on sale.
I think Irving set of famously yesterday, we haven't announced the Youtube on sale, yet we haven't announced when the dates will play.
Secondary sites have you to date up with tickets on sale.
So the consumer on these high demand on sales.
<unk> really over the last couple of years.
Starting to get pissed off and doesn't understand the process why are there. So many tickets on spec selling sites why a 10 o'clock if I didn't get a get a ticket or their five pages of sculpsure sites selling tickets for five times the face value Ticketmaster you must have given them tickets. This must this doesn't seem fair.
And thats kind of the digital ticket going online.
I had been a sticky stubhub vivid the big scalpers with all of their their ways of getting tickets before after that's really highlighted right that's really big.
A new thing over the last few years, but the consumers could see now on lie they don't understand why they couldnt get a ticket and why why theres. So many tickets on secondary.
So I think that's the part that.
We've got a we've got to now really lean in on that.
We did that today with the Fair Act I would tell you yesterday sitting at the industry conference at Pollstar, if any of you.
Want to hear this panel between Irving Garth Brooks, Jim Dolan, and then on the Doj ex employee I think it was fabulous because that I think really shows a United music industry in that conference yesterday was venue promoters managers agents and artists and I would say it was the most excited and most unique.
I've ever seen them in the sense of we've got to now stand up as an industry artist historically have not been great.
At logging together really the only lobbyists that exists as the ticket broker Association.
Done a good job, but I would say yesterday that room was lit up that the artist and fan relationship and that Garth Brooks moment, when he's out there and said you know when I want to charge a certain price for a ticket I don't want someone in the middle of making money off my IP I wanted to deliver that ticket to my fan at my price.
So I think I think we've we've been too passive and our approach on how we need to educate and act. This week was the start of where we're going to start moving you're going to see us lean forward a lot more.
On Education reform and then ultimately what the.
The part that matters. The most is just being better at our products. We still are the best at the game right now were the only ones that have very well developed verified fan or products to try to stock. The secondary box, we're going to get better and better at that we're going to be more transparent we're going to do some new products and the live nation venue side.
That will lead the industry. So I think youll see this year.
A lot more action from our side pushing back leaning forward and ultimately deliver better products with the artist, but I would tell you. If theres. One place you wanted to be standing right. Now is where we are we work for the artist Theyre very United behind US we are doing a fabulous job for them.
<unk> done a great job.
Jackie the narrative.
Obviously when incentive Senator <unk> star witness as the CEO of <unk>, we've not done a good job.
We're going to we're going to move forward. This year this year, a much more aggressive telling.
<unk>.
The artist side of the story I think fair out today is a good start at that.
Okay.
And then for Joe just on the quarter.
The sponsorship AOI margin was a little lower than we normally see I think there were some festivals and chose the head.
Got scheduled later, so I'm wondering if there was a mixed factor there.
And then just free cash flow conversion for the year I think it was like 10% higher than you would expected wondering if you could just walk through the drivers of that.
And how sustainable that might be.
Yeah, I think obviously, we finished up a fantastic year as I've told you guys in the past I don't overly read too much in this quarter specific.
Comparisons you've got a lot of moving pieces.
We obviously have some changes in the business with the addition of about SaaS.
A lot of impact last year timing of APAC closed most of the year Europe only opened in the second half. So it was really just some timing shifts nothing to read particularly into later to read as it go forward indication on the margin side.
And then as you said, yeah, our free cash flow.
Came in very strong as a conversion of ally.
I think a little higher than expected in part just the overall level.
Gave us some leverage on that.
And then just some of the below the line pieces were a bit lower than what we expected. So I think we outperformed last year on that free cash flow conversion.
Thank you.
And our next question comes from the line of Steven last check with Goldman Sachs. Please proceed with your question.
Hey, great. Thank you maybe on the demand front for Michael Thanks for the commentary on the ticket sales being up 20% year over year.
On a global basis. So far this year I was hoping you could maybe expand on that a little bit by talking more about what youre seeing in demand. So far through February particularly in markets that were open at this time last year I think like the U S.
Under and maybe parts of Europe .
Is it consumer.
On pricing.
<unk> remained stable.
Versus what you saw last year as growth accelerated or decelerated, especially now that we're lapping.
Lapping some of the benefits that we saw in 2002.
So I'll start off.
Just start with some of the numbers and then Michael can fill in with some color. So as Michael said, we're up 20%.
This year relative to where we were at this point last year, that's even with last year, having the benefit of all of those rescheduled shows which totaled around 20 million fans about 20 million fans got rescheduled we think half of those would have happened last year anyway, so that means that that 20% growth comp against a <unk>.
A number if you will so the actual growth even stronger than that.
As we noted in the release within that international is up around 25%, which would mean that North America is fill up high teens, so very good growth.
If you look just at the ticket sales sold in January through mid February of this year on a global basis, we sold roughly twice the number of tickets as we sold last year. So even looking at the most recent activity continues to be very robust globally.
Yes my commentary.
Similar we are.
We are just amazed at the resilience of the customer this year I think we all lived in November Air Pocket thesis everyone's view on was 22, an exception to the rule could we keep growing where was the customer was it just a bubble.
We see nothing but strong growth demand everywhere in the world right now.
We're up right now with stadiums in Asia.
South America.
Eastern Europe all of our festivals are outperforming last year around the world our clubs and theaters are doing well our perf are on site spend in most of those clubs and theaters, we see tracking in the right direction.
We had always in there.
This business you always worry about the first.
Superstars theyre going to sell out.
And then how is the rest of the business do and Thats kind of the meeting the potatoes of our business how are the amphitheater shows how.
How is all of the the middle stuff going to do and we're just seeing incredible strength right now across the board on our festivals are big festivals are these festivals theaters.
Theatres clubs.
This is going to be a continual boom year consumers as we've said.
We'll look at conflicts.
Let's zoom out again as we always do let's forget about the 3% of shows that are going to consume.
Political tweaks, 97% of the shows are very affordable for consumers were still I'm incredibly affordable option for fans to go have a memorable night out much more affordable than.
And then concerts.
I said to Joe earlier.
We absolutely have done a bad job on PR because of the Super Bowl. It was a badge of honor the tickets for five or 6000, each and most people couldnt attain it but.
Concepts are still incredibly cheap overall experience versus a basketball game dinner, a night out or a theme park. So we think that plays in we haven't seen any pullback we've seen more demand top to bottom on a global basis, we think that we'll ride through this year.
Great. Thanks for that and then maybe one more on regulation for Joe you recently made a pretty notable higher on the legal front could you talk a little bit about the rationale for that higher and maybe update us on where you stand in the process for any potential investigation with the Doj.
Sure.
Delighted we hired Dan Wallets are those that you didn't see it join joined US formally following his retirement from late them at the end of January This is actually a conversation Dan and I started in May of 2019 at bottle rock. So Dan was planning on retiring from late them.
Found working with us to be exciting fun business and we talked with you in 2020 he was getting.
Ounces retirement retire at the end of 2020 come join us.
Like so many other people's plans those got up and it's so he didn't end up retiring until January but this has been something that's been in the works now for three years that Dan's wanted to do.
He'll be very it will be instrumental in terms of our ongoing discussion he's he's been in nonstop dialogue with the Doj It seems like for the past 13 years.
He understands exactly the questions they asked their motivations.
Put together an op Ed piece that everybody should certainly read it was impulse start today laying out on a fact basis as opposed to so many.
Analysts and pundits that people referred to making broad statements about the Doj their process the consent decree risk because of us being broken up I think he does a fantastic job of laying out in very specific detail why so many of those beliefs are unfounded.
<unk> creates a little higher requirement for people that are going to talk that way to need to disprove when he lays out there as opposed to generally speculated.
Great. Thank you for that.
And the next question comes from the line of Steven <unk> with Cowen and company. Please proceed with your question.
Yes, Thank you building.
Building off what you said earlier, Michael about one of your main taken even competitors testifying against you just in light of this fair Ticketing Act do you think there's any political will in the United States to allow.
Four primary ticketing players like live nation to help artist utilize our digital ticketing technology to impose controls on the on the resale ticket.
Well I believe the.
I believe that the artist has the best shot when they unite.
Around their IP.
There is the U S is probably about the only country in the world that doesn't have some level of regulation I mean, most other countries woke up and said geez, if the artist wants to charge $300.
And under priced this product for the fan to get a cheaper ticket why would a middleman be able to make a thousand it doesn't seem logical right. So most IP. If you look at the artist you wouldn't be able to look think about much work Netflix is doing on password password sharing.
799.
I think theres a lot of pent up artists who are under price their product every day.
I mean, we're pretty much the only product in the world that's worth more of a second unsold.
They've done that for the betterment of their fan base.
And like everyone else they have seen now the sunlight online.
The abuse, that's been taken on their on their IP. So.
Our position I like stand up with the artist I think the artist Irving saw it yesterday with Garth I do believe.
But the artist will have more control of their ticket like the Pearl Jam model. They shouldn't that doesn't mean that you are not going to transfer the tickets, where we believe in tickets should have a fair exchange platform.
And you should be able to exchange and sell tickets and if an artist doesn't care about secondary then great.
Let the Russian Roulette wheel move if you do care and you want to eliminate you want to cap it at 30%, 20% I just think that the artist since they're making the decision on how to underprice their product for the betterment of the fab should that should have a seat at saying well how does it go to market because we don't want the artist.
Continually say well I'm just going to charge 5000, then that's not better for the fan to charge market.
If they're going to charge under market I believe that they have.
<unk> should have a say in it I do believe there'll be very persuasive overtime.
With with lawmakers when that story is presented.
As you know the secondary are running around.
Trying to make sure that the second that tickets are purely transferred.
So they can so they can sell them.
<unk>.
The good news in all of that has gone on over the last while they'll let a crisis go unused I think that this has created a lots of great news as painful as it is for us some days.
The bottleneck the Genie is out of the bottle, we were kind of suppressed backfoot not wanting to talk out loud too much about a lot of this business, while we serviced our customers I think the.
The Champagne bottle has been popped I think artists I saw yesterday was very unique.
I think youre going to see.
<unk> been all sleeping while the sculptures had been established job lobby.
They've got woken up yesterday, and recently and I think the artist and the venue remember have a big stake in this right, especially sports.
So.
I think the sports teams the sport leagues content owners in general.
Like any other industry.
Make them was very clear yesterday, he talks a lot about the artist IP.
We think that's a very very valid position, we think that the artist or the content owner.
We will be able to have more control on how and when they want to sell their tickets.
I think that's I think that's a big step forward.
Thanks, Michael for that and Joe I, just had one one on your Capex spend for 'twenty $3 million to $450 million. So one third of that on maintenance Capex implies.
With 2019, and then two thirds implies.
50% growth I think above 22 levels, 82% growth above 19 levels you just provide some more color here on what those investments are is this in the venue nation business.
Then any color on the hurdle rate you guys factor into this capital spend would be appreciated. Thanks.
Yeah, a lot of the growth is certainly in the venue nation side. There as you can imagine in 2020. One we had a substantial amount of deferred capex that we didn't do that the buildings needed then in 'twenty. Two we were faced with a lot of supply chain constraints had to prioritize where to use the scarce.
Forces that we were able to get so that was a limiting factor. So there's some catch up on the maintenance side of it.
You know the return the return is really more of a Rev. Gen side and maintenance side. Most of the maintenance is as required for continuing operation health and safety issues.
On the growth side, we have return requirements that are well above our cost of capital haven't given specific ones. If there is a bit by project, whether it's a brand new project or it's just a you were adding a new bar at a venue so.
Those are opportunities that we just think are continuing to present themselves as we expand our global footprint.
Thank you.
And the next question comes from the line of Jason Bazinet with Citi. Please proceed with your question.
I just had a question on the concerts AOI per fan.
I know you called out some of the headwinds reopening costs inflation for the venues you own and said it would get better but can you just sort of.
Graeme.
Reasonable NOI per fan is.
It was a $1 40 this year.
Maybe $2 50 or something back in 2019.
Yes, I don't I don't think concert COI per fan is.
As a logical way to look at it Jason I think if you look at how we've talked about our business, we've talked about our business across the multiple pieces. So you have to look at it what's the concert concerts plus sponsorship plus ticketing.
Oh, I prefer which we've grown I think what we've seen.
That is is that the concert business has been hit by some of these cost increases supply chain constraints.
Increased costs on some of the inputs.
We've increased the overall profitability per fan close by executing on site with those fans coming to our venues, but then also by dramatically increasing our sponsorship per fan.
And by growing some of our ticketing revenue per fan, including the non service fee.
Side, So we look at it more holistically, recognizing they're going to be some puts and takes in a given year or certainly on the business.
Can I just follow up because of it but also just I just want I guess I just wanted to get some color I wanted to get some color there just to remind everyone. When we sat here a year ago. We didn't think we were going to be opened in the summer we had no staff.
<unk> 100 miles an hour to get open for May hire 20000 staff every tour concert couldnt find trucks double cost for generators.
We were running hard last year Overpaying staff suppliers getting this show back together was tough last year.
Still obviously delivered incredible numbers, but we're now back to that 2019 level of staff in place cost have all come down suppliers are all back in line generators are normal cost. So we do obviously expect 'twenty three to be in terms of a cost basis back to way.
<unk> normal business.
Can I just ask one follow up.
Sure.
Do you think the right way to look at it is that they.
Some sort of permanent shift and profit pools towards sponsorship and advertising and ticketing and away from concerts.
Other words.
It's premature to say that I mean.
Give me another just piece on.
What hit US last year was concerts was we had those I talked about the 20 million fans for shows figure out rescheduled.
Our shows that went on sale in 19 or early 'twenty and we're priced at the price level for those shows back then.
Forward a couple of years later nobody was repricing the rescheduled shows.
Yet the market, particularly for the best tickets had moved up substantially. So in 2022 you were operating it.
Pretty good chunk of your business with a 2019 2020 revenue stream against the 22 cost structure that's.
That's not going to replicate itself that was a one time unusual events. So I mean.
I think you got to take a bead, let this year play out before you start Brian and conclusions off of a single data point okay.
Perfect. Thank you.
And at this time, we have reached the end of the question and answer session I would like to turn the floor back over to the management team for closing remarks.
Thank you everyone.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.