Q2 2023 Live Nation Entertainment Inc Earnings Call
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Good afternoon, My name is John and I'll be your conference operator today at this time I would like to welcome everyone to live nation second quarter 2023 earnings call.
Joining us today from live nation, our president and CEO , and Michael Rapino, President and CFO , Joe Berchtold, and head of Investor Relations Amy Young.
And I would now like to turn the call over to Mr. Berchtold. Thank you. Mr. Burke told you may begin your conference.
Thanks to everyone for joining us as I think you noticed from our earnings release. This time based on some feedback that we've gotten on our release in the materials in general.
Switch stood up this time to get a little more comprehensive and data driven.
In terms of numbers and the facts. So you see in the earnings release that we reduce the narrative and increase tried to give you.
More structured basis, all the key numbers and then also put a trending schedule that I think there is a link to.
A PDF or excel file. So you can track this quarter's numbers relative to history. It makes some of it easier so I'll.
I'll turn it over to Amy to give.
To give you a quick reminders and Michael and I will go straight into taking questions that folks have Amy.
Amy.
Thanks, Joe.
Like 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 our SEC filings, including the risk factors and cautionary statements included in our most recent filings on Form 10-K. Thank you and 8-K for a description of risks and uncertainties that could impact the actual results.
We will also refer to some non-GAAP measures on this call.
In accordance with the SEC regulation G. We have provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in our earnings release issued earlier today.
The release reconciliations can be found all of the financial information section on our website.
And with that we're now ready to take 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 for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
And the first question comes from the line of Brandon Ross with <unk> Partners. Please proceed with your question.
Hey, Thanks for taking the question.
I think investor concern now if you were to pull the <unk>.
Buy side is that with the past few years coming out of Covid being so strong you're going to have trouble growing next year.
I think the street's only at mid to high single digit growth.
I guess there it is.
Is a good problem to have.
But you said there are positive indications for 'twenty four and wanted to see if you can cut.
Break that down into domestic and international.
On the domestic side what are the positive indications that youre seeing besides this very early pipeline will supply matched what we've seen in the past couple of years and then on international obviously Latam has been a huge tailwind post acquisition you've seen some other green shoots in Asia and parts of Europe .
Should we expect continued growth in those markets or just more M&A on top.
So Brendan and thanks, Joe for starters as I think you probably noticed we put it in the release that at this point are confirmed shows and shows that we have offers in on our arenas Amphitheaters Stadium shows is up relative to.
Where we are.
Last year coming into 2003, so we're seeing continued growth in the show count, which should lead to continued growth in attendance.
Our formula is to drive that growth in attendance and from there to accelerate the AOE levels even higher.
With increasing per fan profitability on site.
Increase in sponsorship increasing our ticketing business. So I think we're set up for a very strong continued growth into 2024 across the board and a lot of that activity. These are these are going to be the shows that you have the longest lead time on so a lot of these are going to be global in nature cutting across both North America.
In international.
As you noted and as I think much of the release lays out this has been a tremendous quarter for growth in international markets up I think it was 46% fan growth so far this year.
Given that we were closed part of last year, we expected to see very strong growth, but we still think we are in the early innings. If you take Latin America.
We're up about 35% this year, so far year to date with roughly 10 million fans.
But we think we're still in the earlier innings in South America, We launched the town Festival already sold 400000 tickets on our way to probably 500000 tickets, which is unheard of for a festival in its first year. So as we continue to layer on our promoting business, bringing in our sponsorship business bringing in.
Our ticketing business throughout Latin America.
<unk> continues to drive it.
Forward.
In North America again, a very good year this year and we're seeing this sort of growth that we think is possible ongoing year to date up 8% in North America with a fan count expect that to be double digit fan growth in Q3, probably verging on double digit fan growth for the full year in North America as we're seeing.
Top to bottom, we're seeing strong growth in theaters and clubs. Our amphitheaters are doing great substantially up in number of fans attending per show and the high end stadiums are doing very well there is no I've seen some things talking about is the middle house below end demand across all of those continues to be very strong.
And I'll just jump in and just.
Brandon just on the just to reiterate the pipe right. The most important thing for US is just how does the pipe for next year.
As you know a year ago, we sat here and I think everyone's thought 22 was a record year and we were headed into an air pocket.
Blown the doors off in 'twenty three.
Step back we believe for the next multiple years, but this industry in general is going to have a growth surge on a global basis, we've talked to all these factors before international global artists consumers, there's a whole bunch of great articles written on why there's a boom happened in our life business on a on a long ago on the long term.
Basis. So we don't think this is just any COVID-19 catch up we think that this is going to be the time went live on a global basis is going to have an incredible growth run.
For years to come we obviously benefit from that anytime the market gets to this level of growth because we'll capture that growth also so we're looking next year, we're seeing top to bottom is as Joe said.
Credible pipe.
Of artists that we'll be filling all of the different venue types and markets across the world.
So we think we're headed to a very very strong 'twenty four 'twenty five onward.
A combination of the market's going to grow the consumer demand is growing and our ongoing bolt on acquisitions venues new market entries compounded on top of our organic growth is going to give us. This continual one two punch of growth for the next multiple years.
Thank you.
And the next question comes from the line of Stephen <unk> with Goldman Sachs. Please proceed with your question.
Hey, great. Good afternoon, just maybe on the outlook for consumer spending and Theres been a lot made over the last couple of months about the impact of student loan payments starting up in the fall maybe for Joe you could just remind us what percentage of the concert going base, you think might be skewed toward this cohort and then maybe more broadly discuss how youre thinking about the rest of that consumer spend.
And pulls back maybe into the back half of the year next year.
Are there any parts of your business that you think are more or less expensive perhaps festivals.
Just would be curious if you could dive a little bit deeper more deeply.
Deeply ensure the demands out of that.
Equation there Steven Thanks, I think first just for context, it's important to remember relative scale. So if you look at consumer span discretionary spend on goods versus experiences as we know it was in the high <unk> and experiences I mean this is a Goldman report that talks about this.
Pre pandemic and then how that strong and it hasnt yet caught up so our analysis shows that the tailwind impact from getting experiences back as a portion of discretionary spend is about 10 times the impact of any potential.
Headwind coming from the student loan payments needing to get made so we think that the tailwind on that specific macro factor is as far outweighs any headwinds as Michael talked on a global basis, we continue to see this as a tremendous tailwind.
In business as your cab further and further globalization of demand.
As we look at all the different pockets that I mentioned earlier that the amphitheaters is an example of a mid level Act we're seeing.
High single digit increases in attendance per show, which is really driven by more lawn tickets being sold so the people that you might say are going to be the most price conscious are continuing to expand our continuing to expand strongly per caps growing even as we're continuing to increase our number of fans per show.
Which again means that even the even the marginal fan just continuing to spend a lot when they show up so we're not seeing any indicators that would give us any concern on.
Any slowdowns.
Great. Thanks for that and maybe just one on concert segment margins.
Margins were up year over year in the second quarter I think there might have been some assumptions that margins would be pressured year over year just given the.
The mix of the slate towards stadium and arena. This year. So I'm curious what drove margin expansion in the quarter.
This is a trend that we.
Will be sustainable for the rest of the year. Thank you.
Yes. It is.
Said in the last quarter, our expectation for the full year on concerts is that you will see margin expansion relative to last year. You are correct that any fan and third party buildings is generally going to be a lower margin than fans in our building.
But the countervailing factors is that we continue to increase the per fan profitability across all of the different venue types. So as we increase that per fan profitability for all the different ways that we have to monetize and we're going to see some margin expansion.
That comes from increase per caps on our own building. It also comes from continuing to focus on the costs.
I think in particular in North America, we've been very effective if we look at our amphitheaters. If we look at our theaters and clubs globally, we've been able to actually drive down our average operating cost per fan this year relative to last year, which certainly helps with our margins.
Great. Thanks, Jeff.
And the next question comes from the line of David Karnofsky with J P. Morgan. Please proceed with your question Hi.
Thank you.
Curious with your voluntary on pricing initiative I know you haven't implemented this yet but.
What the reception has been so far from fans clients lawmakers and then can you discuss have you thought about any potential demand impact as for.
The shows at your venues is I think now optically at least you're raising prices relative to maybe competing locations and then maybe for 33rd party venues that would opt in how you would think about the demand impact there. Thanks.
Sure I think the general reaction has been overwhelmingly positive.
People understand that getting the all in price upfront is absolutely the best consumer experience.
Think there is a lot of concern that there will be still confusion in the marketplace, because there will be a mix of all in pricing.
At for shows on our sites and on the primary tickets on our sites and you go to a secondary sites, you'll see a different approach. So that's why we continue to support legislation that drives consistent fan experience.
Because we are the primary ticketing provider in these events I think it's our expectation in general that.
Even that all in primary price is generally going to still be lower than any secondary price even without service fees.
So our experience thus far in New York or Louisiana, That's recently implemented it we haven't seen any impact on our primary ticket sales.
Okay, and then Joe for the $300 million of growth Capex went to see if you could provide any additional color around that how would you bucket that between concerts and ticketing and then within concerts, new builds or other growth initiatives and then you released noted international locations specifically for the venue nation pipeline I'm interested.
Now kind of see international is the key area, where you where you're going to be adding venues.
Sure I think if you look at the overall $300 million of spend is vast majority of it would be concert driven 75%, 80% of it would be.
On the concert side.
If you look down on the concert side I would put it in three buckets. One is is where we're doing a lot of tactical improvements across a broad set of our amphitheaters or theaters and clubs around revenue generating opportunities.
Putting in new bar designs, putting in additional points of sale things that are going to tactically helped drive our Aps levels.
Second is when we renew our amphitheaters theaters and clubs, we often go through a capex refresh cycle.
Because we're going to have a long term lease forgive me if we get a strong return off of that investment and then third would be the new builds we're at whatever level.
Generally coming in and building out the shell.
And taking on that building would be the third bucket and it's going to move around year to year within those three but those would be three large buckets.
And then in terms of the priority is absolutely International Latin America Asia and more in Europe is high the highest priority for the venue nation strategy.
In the U S. You benefit from having a strong arena infrastructure, because NBA NHL their teams in there.
And their affiliate teams provide you with some of that infrastructure that you don't tend to have in the rest of the world. So this lets us.
Both benefit from strongly attractive returns on those venues also lets just put on more shows for more fans because we're putting the infrastructure in place that didn't previously exist.
And our next question comes from the line of Steven <unk> with TD Cowen. Please proceed with your question.
Thanks for the question.
So you're on track for selling $3 million fee bearing tickets this year, which is 7% growth over 22 in the first half ticket growth on C band was 22% year over year. So just maybe help us understand what the slowdown in the second half and ticketing or is that just some conservatism in the numbers.
And I had one more follow up thanks.
Yes, I think it's just you don't yet know what Q4 looks like in terms of timing with on sales for shows next year. So I think we're confident in the 300 million number at this point with the visibility we have.
When were sitting here talking next two I think we'll have better visibility into what Q4 as well.
We'll guide from there.
Okay. Thank you and then similarly on the ticketing margin side.
You came in north of 40% again in Q2, you really really high 30 ish in the ballpark for the full year excuse me implies sort of like a mid <unk> margin in the back half so just.
Similar to the revenue line, what what's going on there sequentially in <unk>.
Puts and takes thanks.
Yes, I think is a long talk there's a lot of timing that happens with us in a given quarter.
I think you saw last year a lot of the same questions. We had lower margins in the second half as we had a lot of costs associated with the contract renewal cycles and other factors. So.
I think at this point we're comfortable.
To reiterate the high thirties for the margin, but not yet ready to get more specific than that.
Okay and should we expect contract renewals again for Q3 similar to last year.
I don't think I don't think were looking to guide a specific margin for a specific quarter as much as just give the overall year guidance. Okay. Thank you. Thank you Joe.
And our next question comes from the line of Peter <unk> with Wolfe Research. Please proceed with your question.
Hi, Thank you question on international with it growing so strongly.
More major tourist artists touring globally.
Has your strategy changed at all does this.
Invite you to spend more money, perhaps on international M&A or are there other things that you can do now with higher visibility to international demand that you might not have done in the past.
Shorter question just is on technology Theres other controversy around bots and scalpers over the last year.
Indicate that the company could productively spend materially more on technology and solve some of those problems.
Although the global part as Joe box.
Yes, I don't think the the strategy has changed I think if you've listened to us the last five years or longer and we've been talking about that live as a global business. The artist has been unlocked globally.
Tumors, thanks to social media and others are.
Our driving global consumption with no with no gatekeepers. So we are we're 40 currently we have 100 offices in over 40 countries.
We have been on this March for a long time.
We think there's still lots of opportunity obviously as we've talked about in Latin America Pacific rim.
Eastern Europe , but.
Kind of plan is following as we kind of predicted the artist will continue to go global more global artists and international markets would want to be just.
Just like New York, and Boston would want to be hosting Youtube and a and.
And beyond say so the world. So we had an opportunity to build out those markets. So pedal down we see lots of great growth opportunity for years to come on that front.
And on the bots, certainly new technologies allow us to continue to get more sophisticated and trying to stop the bots. We're regularly working on both.
Both the technologies as well as just new processes to try to weed out humans versus bots.
Some of the same technologies is also being deployed by bad actors trying to jump the line and get those tickets and they are a $5 billion a year incentive to cheat to get those tickets, which is why we've been continuing to advocate and I think we've seen a lot more visibility.
On some of the behavior that we need.
Like at least more legislative support in terms of real punishment for the bad actors for the platforms that enable the bad actors ending practices like speculative ticketing that is clearly price manipulative and anti consumer so we're.
You want to do our part to fight it and we hope that we'll be able to get some help.
With some rules and with some real penalties for people that are trying to achieve.
And the next question comes from the line of David Katz with Jefferies. Please proceed with your question.
Hi afternoon, everyone. Thanks for taking my questions.
I wanted to just get an update if you don't mind on the.
The digital process, Alright, digital ticketing et cetera, and then the second derivative of being able to harvest and drive better returns off of the information gathered from it so where is that today and where can it go and how do you see that opportunity.
Yeah at this point digital ticketing is largely ubiquitous.
Globally coming out of Covid.
I haven't seen the latest numbers, but I would expect it minimally in the Ninety's that are now digital ticket.
Very informed shifting from Barcodes to what we call safe ticks, which is rotating barcodes or NFC.
Tickets from.
From being.
Counterfeited in and sold over and over so we're.
We have a number of initiatives that are launch then to use that data we've talked extensively about some of the things we've done in marketing in bringing all of our data together.
To better understand the fan how we market to that fan how with the digital connection we're able to market to them on behalf of our Ticketmaster clients, how we're able to market to them. We have a sponsors how we're able to send them.
Messages for Upsells when they go to shows in our buildings.
So that all continues and then in the background, we have ticketmaster using the data that it gets for a range of.
I'll call it machine learning purposes, and tools in terms of helping clients figure out how do they price their shows how do they market their shows.
What are the what are the tools.
They should use can help our accounts for folks in terms of understanding and likely demand for tours and shows in specific markets. So.
Certainly now it's to the point, where that data and now is uses permanent business.
Got it and if I can follow up please with respect to platinum right. We do have discussions about.
Inflation in the cost of things et cetera, et cetera, which.
It doesn't seem to be at play here.
But.
Where is that where can it grow.
Any pressure points with respect other than the artists themselves authorizing it alright.
Alright, any pressure points toward sort of growth in platinum and how that mix as you hire.
I Wonder if you would characterize it as artists.
Not allowing the artists are the ones who are set the price of their tickets.
It's our job to to provide the information to them to help them understand the market value of their tickets. So they can figure out the balance that's right for them and their fan base in terms of.
Pricing the ticket so.
They're getting the value or are they giving it to the fans how do they keep it from going to the scalper.
A lot of artists now.
I would say, it's almost becoming the standard that they are understanding they should price the front of their house to capture most of the value otherwise, it's the scalper who's going to take it and then they want to make sure. The back of the house is priced so that every fan can afford to buy a ticket you can get in the <unk>.
Trend, we've seen coming out of Covid is I think a switch from it being partially used to being very ubiquitous here in North America, and then over the past year or so it becoming much much more heavily adopted in international markets. I think we still have a long ways to go in international markets, where it's full adoption and if you look at the pricing with <unk>.
There is still a substantial gap relative to average secondary pricing, which would imply that artists are continuing to give a lot of it are attempting to give a lot of value to fans and we'll see how that evolves over time.
Thank you very much of a jump in I'll jump out and platinum matched the magic of platinum isn't increased first rose the magic of platinum as it gives that odyssey opportunities to look at the whole house.
Never in historically jumped on an earnings call until till we couldnt sell the first 10 rose Rosa our job is always to sell the last 10 rollout.
Upper notably just they call them.
Has enable the industry to do is as the artist has increased show cost needs to get a certain gross for that night is we should figure out how to maximize some of the front of the house closer to market, but that's also let us bring the price down in the back end of the house.
So the net gross can be more overall, but its giving fans are better sell through rate on the back end of the house, we used to be locked into kind of three ticket prices that didn't have that opportunity. So the biggest advantage to dynamic pricing and platinum pricing over the last few years was really just how do you help the whole house gets sold.
How do you reduce the prices in the back end of the house that are always the harder ones to sell so you truly get a full house.
The proper gross from the artist and then all of us benefit when more people walk through those doors.
Understood. Thank you very much.
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 secondary market.
And my question is pretty simple.
Philosophy or emphasis on this market changed because.
I think in your K, you talked about the GTP on secondary being something like almost $4 5 billion in 'twenty two.
More than doubled 19 levels in this release Youre talking about secondary ticketing volumes up double digits. So is this just indicative of the overall strength that we're seeing in consumer interest in going to live events or is it something that youre doing as well.
Both.
Well first off again just to keep it in context, we've long said that first and foremost our job is to sell the primary ticket where primary ticketing company in its secondary as a kind of low to mid teens portion of our G. TV. So it's relevant but it's also not the.
Primary focus we have long thought that we need to be in secondary because fans have a need to buy a ticket I don't Wanna shows sold out if we're not giving them an option to buy.
Legitimate secondary ticket than were forcing them to go to other platforms to.
To buy their tickets and we think they are better off being served with him to ticket master ecosystem I think as we continue to do a better job with our offer reducing friction understanding how to deliver on the fan needs.
As we've aligned with the NFL, the NBA and others on the sports side to have a slightly different model for secondary I think we've naturally.
Brown our position in the market.
But.
What really matters to us first and foremost is is that we have a great <unk>.
Primary sale and that's managed in a way that is going to keep content happy.
Perfect. Thank you.
And the next question comes from the line of Paul Golding with Macquarie. Please proceed with your question.
Thanks, so much and congrats on the quarter.
Just quickly wanted to see if you had an update on our metric you've given before in terms of the average ticket price and how that's been trending I think in the past you've said it's been below $35.
And then secondly, as a follow up as we watch sort of the macro tightening in the backdrop.
Not so much for your business, but in general in tracking sponsorship any color you could give on cohorts that are more or less meaningful for that sponsorship growth that you've been seeing as we track forward.
This tightening environment. Thank you.
So first of all on the average ticket price I think what we've talked in the past is that the average the entry ticket price. So the the lowest price that a fan can find a ticket at for our amphitheaters.
Theaters and clubs is generally average below $35 in it and for the reasons of the Michael spoke to it continues to be below $35. Because the artists are wanting to make sure that almost all fans can get in to see their show and then what <unk> seen is because their costs have gone up because they've seen what's going on in the secondary market.
Some of the closer in parts of the house.
Have in <unk>.
Increased ticket pricing I mean, you can see from the overall Ticketmaster GTA V and number of tickets sold that pricing in total it was up double digits still year on year.
While the entry prices remain low.
On the sponsorship I'm not sure I fully understood. Your question I think we've seen.
No slowdown in terms of our sponsorship business, we have over 90% of our expected revenue for the year is booked being driven by a lot of the large multi asset multi million dollar sponsors that we work with who have long term agreements with us that continued to be continuing to go.
Well and continuing to sign more.
I guess my question around that was more around sector. So for example, if we were to think about the sports and sports betting maybe being a predominant sponsor.
Boost.
This year or the tail end of last year or anything in that.
And that type of.
The area of color around the mix.
Yes, I don't think there is any of it.
We have a 900 different.
Monster brands every category you can imagine it's fairly distributed evenly through.
We haven't seen any any sector pullback.
That has affected any of the core business overall.
We've always said, we believe that our businesses.
It is a much less of an investment than a lot of the other TV and big campaign investments that brands make.
It's much more targeted approach. So we have seen more brands shift some of their dollars from the other categories to the events space, where they can kind of get that direct consumer.
Interaction that they can't maybe get on digital.
And elsewhere. So we've seen most sectors increase their spend in our category, it's been growing and we've been growing with it we think that we think that trend is going to stay because.
As they are all trying to figure out how to connect with consumers in a digital world.
We in sports live give them that one opportunity to hit consumers at scale on a Thursday in Pittsburgh. So we think we're going to see more of a more growth in our category.
Great. Thanks, so much.
And the next question comes from the line of Cameron mentioned Perone with Morgan Stanley . Please proceed with your question.
Hi, Thanks for taking the questions two if I can.
The increase in accretion expectations for the year.
And that release connected with those sets of implied that performance there is pacing pretty well above your expectations earlier in the year.
Can you talk a little bit about what specifically has been outperforming.
With the assessor and then more generally in terms of flat in America.
Obviously been a focus for you guys do you feel like now with kind of touch points in Mexico, Brazil, Colombia that youre in a position where you can kind of expand to the rest of that region organically or are there other kind of individual markets, where it might make more sense to penetrate into.
Through M&A. Thanks.
Yeah, we think Latin as we think.
Kind of our global playbook has always been the same.
Most of these markets.
Low cost maybe a bolt on.
Promoter or festival.
We ended up having enough content that we can bring the tour to the market and then we build up the flywheel once we get to that market. So in Brazil, We've got rock in Rio and Incredible Festival Foundation.
We now have a great touring business, they're bringing.
Artist to the ground luster.
Launch of ship business, there and that was just launched ticketing. There. So I think it's a great combination will see continual growth in Latin America, Brazil.
And a big year of Argentina's it's crazy that the market is on ticket sales.
We like the entire tire market down there so you'll see us organically grow we've always been a predominantly organic driven business.
And then we will use continual bolt ons to keep powering and doubling up on our efforts there.
How about on.
An assessor in what's what's driven that outperformance.
I mean that span across the board.
On their concert side, they've we've done well in terms of starting to get shows on our Turing platform down to Mexico. Latin artists are clearly on fire. So they've got very very strong set of regional shows they've been doing their festival business is doing great.
Continued we've worked with them to get a ticketing platform enhanced.
And that's continuing to perform very well and they've been bringing in sponsors. So it's really across all elements of their business.
As well outperformed relative to what we thought when we acquired them or even what we thought.
Six months ago nine months ago on how this year would be.
Got it thanks, everyone remember, we bought we part of assessing Covid, So God bless us we believed in the market.
Did we did we model out our IRR to think that the.
The industry would bounce back as big as it has.
No. So anything we're doing down there has been above and beyond what we expected for Latin market and industry in general overall and.
We've got incredible management team down there partnership with the CEO , there very very well run organization they've got venues ticketing, we've been able to take a really kind of kick ticketing platform and continually reinvent it now that where our partners on the ticketmaster side sponsorship upgrades so off their incredible.
Our expertise and the market dynamics.
Dynamics, it's been an incredible return.
Is that if I can follow up quickly on one of those points is that.
One is that generally a one way bringing sponsors from elsewhere into those new markets or is there also kind of a reverse dynamic where you.
You are taking local sponsors and also giving them exposure in North America Europe that they may not have had previously.
Yes.
I'd always gets completely one way, but it's our global concert global sponsorship partnership team. When you are sitting with any of these big brands you can imagine.
And you are trying to sell a.
Global sponsorship.
That maybe they are only doing with the Olympics in F. One because there's not a lot of global properties right. The NBA most sports is regional.
So when we can sit in that room. They know we have a big office in a.
Now a market in Brazil, and we can get you to Rio San Paulo, and Mexico City.
<unk> so the more major markets, we can add to our pitch when we're sitting with that.
CMO on a global basis. It helps look at our spot business that we can now deliver kind of a global platform and bring bigger sponsors to some maybe local deals they had.
I will always kind of look to replace a local deal with a global deal.
It would be the return we can look for so adding Latin, adding Mexico city, adding these markets big markets for most big brands gives us more and more markets to sell our global story too.
Makes sense. Thanks.
And our final question comes from the line of Matthew Harrigan with Benchmark Company. Please proceed with your question.
Thank you.
Severely down in the weeds questions you did the acquisition in March.
Clark and cloud Hong Kong, Great name by the way is that any sort of real expansion platform and you did put out a release on that obviously that market has dual youre already let's say the least but is that a potential growth vector for you.
Lee.
I guess of Peter's question earlier, some of the issues with yours in November Werent, so much that the basket get through verified fan is that your.
Your network basically couldnt handle the amount of traffic that was generated do you feel like you've made sufficient upgrades at this point that if you have the same situation.
Yes.
That could be another immediate areas to work with there was do you think you'd be able to scale.
Appropriately. So you didn't have the level of disgruntled customers. Thank you.
Now let me take the second one first this is Joe.
Just to be very specific what happened was there were two vectors of attack.
Rain that on sale one was a very large number of bots trying to crash into our verified fan system that slowed down the fan experience, but that did not crash the system or caused us to stop at the same time, we had what was in effect they attempted cyber hack.
That was a brute force cyber attack. It had the fact of a dial service attack not through our front door of our verified fan system, but through a specific surfer that we have in.
In order to fight off that cyber attack, we had to stop the on sale within five hours, we had figured out how to fully reinforce the defenses to them in fact move out the defense line, so that stopping the cyber attack or the attempted cyber attack, we no longer have any load.
On our system for the verified fan experience we started it back up so what are the answer to your question is is within five hours, we had solve that problem.
It's not something that's taken us six months or nine months to figure out how to solve so we saw that quickly. We ultimately did sell 2 million tickets that day.
And once those five hours for past, while it was a long wait times for fans because there were a lot of people trying to buy the tickets.
There were not the system overload issues.
I'll speak to block them flat.
Yes, you are deeper in the weeds and I am what was that where it was.
Condition, where youre, referring to which one Clark and <unk> in Hong Kong festivals.
It was small it got a little bit of a desk and the trade media and you did put out a press release I assume it obviously isn't that much of an expansion platform but.
Specifics on your ability to do anything on that market and expand more in Asia outside of Australia, and Japan, I thought that would be interesting. Thanks.
I would say it's it was part of it were odd bolt on strategy in Asia.
As Michael said earlier, we'll go in and we'll look for local promoters local festivals that we can bring on and then we can then tie in with our broader concerts platform bring our sponsorship team into so it was an example, I would say of the type of.
Activity or type of M&A that we're doing in the region.
Thanks.
Just just to jump on it for others I mean, we talk about Latin America, but.
Pacific Rim and others are equally importantly, it's a global business, So Japan real real important market for us.
Latin America.
Pacific Rim in general we're already in most of those markets in some form we have offices in Singapore, We've had a very successful operation Korea, which has been kind of the foundation on why we ended up being the promoter for Pts and other kickoff artist throughout the world.
So we look at specific room equally as important as Latin America, you'll continually see us with.
With the bolt on promoter.
Promoter venue festival as we're building up that business and driving content. There also.
Beautiful thank you.
Thank you everyone. This marks the end of the question and answer session and this also concludes 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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