Q4 2023 Live Nation Entertainment Inc Earnings Call

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Unnamed Speaker: Save and dust on the nightstand And I don't know what to say By the time I fold my hands I only talk to God when I need a favor And I only pray when I ain't got a prayer So who the hell am I, who the hell am I To expect a savior, oh If I only talk to God when I need a favor But God, I need a favor Dammit, dammit Yeah, I owe you more than one And beggars can't be choosers But I pray for all I've done So please don't let me lose her I only talk to God when I need a favor And I only pray when I ain't got a prayer So who the hell am I, who the hell am I To expect a savior, oh If I only talk to God when I need a favor But God, I need a favor Dammit Good afternoon. My name is John, and I will be your conference operator. At this time, I would like to welcome everyone to Live Nation Entertainment. And I would now like to turn the call over to. Thank you, Ms. Yong.

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Miss Young: I would now like to turn the call over to Miss Young. Thank you Miss Young you may begin your conference.

Young: Good afternoon, and welcome to the live nation fourth quarter and full year 2023 earnings conference call.

Amy Yong: Good afternoon, and welcome to the Live Nation fourth quarter and full year 2023 earnings conference call. Joining us today is our President and CEO, Michael Rapino, and our President and CFO, Joe Berchtold. Before we begin, we would 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 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 Live Nation will also refer to some non-GAAP measures on this call. In accordance with SEC Regulation G, Live Nation has provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in our earnings release. The release reconciliation can be found under the financial information section on Live Nation's website. And with that, I will open the call for questions. Operator?

Miss Young: Joining us today is our president and CEO, Microbrew, Pina, and our President and C. F O. Joe Bertold before we begin we would like to remind you that this afternoon would call contained sir and forward looking statements are subject to risks and uncertainty that could cause actual results to differ including statements related to the company's anticipated financial performance. This.

Prospects, new developments and similar matters.

Miss Young: Please refer to live nation, 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 uncertainty that could impact the actual results by a nation will also refer to some non-GAAP measures on this call in accordance with the F. C. C regulation G. Five nation has <unk>.

Miss Young: Irvine definitions of these measures and a full reconciliation to the most comparable got measures and our earnings release. The relief reconciliation can be found under the financial information section online Nations website.

Speaker Change: With that let me open the call for questions operator.

Speaker Change: 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 to indicate that you were lying as in the queue.

Operator: Thank you. We will now be conducting a question. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate that your line is connected. You may press star 2 if you would like to remove...

Speaker Change: If you would like to remove your question from the queue for participants using speaker equipment.

Stephen Lasacek: It may be necessary, on Momentum. Your first question comes from the line of Stephen Lasacek with Goldman Sachs. Hey, great. Thank you. Good afternoon.

Speaker Change: For you to pick up your handset before.

Speaker Change: One moment, while we bow for questions [noise].

Speaker Change: And the first question comes from the lineup Stevens lots of check with Goldman Sachs. Please proceed with your question.

Speaker Change: Hey, great. Thank you and good afternoon, maybe one on the make shift in the fleet in one on sponsorship.

Unnamed Speaker: Maybe one on the mixed shift in the slate and one on sponsorship. A lot has been made about the mixed shift, shifting more towards amphitheaters this year. Maybe for Joe, just from a modeling perspective, could you help us think through how the mixed shift will impact the cadence of revenue growth and margin expansion across the concerts and ticketing segments in 2024, and maybe how we should expect the business to pace towards the double-digit AOI growth you called out? And the release.

Stevens: Lots of made on the mix shift shifting more towards the amphitheater. So this year maybe for Joe just from a modeling perspective could you help us think through how the Knicks shift will impact the kid into revenue growth and margin expansion across the concerts and ticketing segments in 2024, and maybe how we should expect the business to paste.

Stevens: Towards the double digit growth you called out in the release and then on sponsorship maybe for Michael you have two notable tailwind for the sponsorship business. This year mastercard's, replacing IMAX and you're a rock in Rio which is a biannual event coming in this year is there any way you can help a size of contribution.

Joe Berchtold: And then on sponsorship, maybe for Michael, you have two notable tailwinds for the sponsorship business this year. MasterCard is replacing Amex, and you have Rock in Rio, which is a biannual event coming up this year. Is there any way you can help us size the contribution from these two factors and perhaps where else you're seeing demand for the sponsorship business this year? Thank you.

Speaker Change: <unk> from these two factors and perhaps where else you're seeing demand and the sponsorship business. This year. Thank you.

Speaker Change: Sure. Steven This is Joe I'll go first in terms of the next shift there's several dimensions of this let's start with deferred revenue deferred revenue in the level to which it's up is impacted on a timing basis.

Joe Berchtold: In terms of the mixed shift, there are several dimensions to this. Let's start with deferred revenue. Deferred revenue and the level to which it's up is impacted on a timing basis by what we've talked about in terms of the stadium volume being lower this year, and the amp volume being higher. So you have less Q4 far ahead on sales with the stadiums. So that's going to compress that deferred revenue line that you see at the end of the year relative to what you'd see in a more normal year.

Joe Berchtold: Well, we've talked about in terms of stadium volume being lower this year at BOL, you mean higher so you have less queue for far ahead on sales with the stadiums. So that's gonna compress that deferred revenue line that you see as of the end of the year relative to what you'd see in a more normal year then and.

Joe Berchtold: Then in terms of how that specifically flows through on the concert side, because there is going to be a shift to more outdoor with the amphitheaters, it's going to be more heavily weighted to Q2 and Q3. It's going to have a higher AOI per fan because we're counting the beer money, the parking money, and other revenue streams when we have the fans on site. It will mean, just on a top-line basis, lower revenue per fan because stadium tickets tend to be the highest-priced tickets.

Joe Berchtold: Terms of how that specifically flows through on the concert side, because it's gonna be a shift to more outdoor with the amphitheaters, it's going to be more heavily weighted to Q2 and Q3, it's gonna have a higher ally per fan because we're counting the beer money.

Joe Berchtold: Parking money other revenue streams, when we have the fans on site.

Joe Berchtold: It will mean it just on a top line basis of lower revenue per fan because the stadium tickets tend to be the highest price tickets so you'll see a.

Joe Berchtold: So you'll see... real divergence there between the AOI per fan and the revenue per fan. That obviously will translate into improved margin on the concert segment this year, which should particularly come through in the second and third quarter. On Ticketmaster, the way it flows through is that it would have had fewer on-sales in the fourth quarter because the amphitheater shows tend to go on sale closer in time to the shows.

Joe Berchtold: Real divergence there between the AOE per fan and the revenue per fan that obviously will translate into improved margin on the concert segment, this year, which should particularly come through in the second.

Joe Berchtold: And third quarters.

Joe Berchtold: On Ticketmaster the way it flows through is that it would have had fewer on sales in the fourth quarter because the amphitheater shows tend to go on sale closer and timed shows. So we still outperformed grew ticketmaster in the fourth quarter increased our number of.

Joe Berchtold: So, we still outperformed, and grew Ticketmaster. In the fourth quarter, we increased our number of fee-bearing tickets by... by about 5 million, but that was against the headwind of that mixed shift. So we expect to be selling more of those tickets in Q1 and Q2 for the amphitheater, but because those tickets are deferred from a revenue recognition standpoint at Ticketmaster, you won't see the AOI on those tickets until the shows play off in Q2. Steven, the help.

Joe Berchtold: Burying tickets bye bye.

Joe Berchtold: By about 5 million.

Joe Berchtold: But that was against the headwind of that mix shift. So we expect to be selling the more of those tickets in the Q1 and Q2 for the amphitheater, but because those tickets are deferred from a revenue recognition standpoint at Ticketmaster you won't see the a O Y on those tickets until the show's playoff in queue.

Joe Berchtold: Two one Q3.

Joe Berchtold: From the sponsorship.

Joe Berchtold: Steven will.

Joe Berchtold: To help.

Michael Rapino: Yeah, that's helpful. And then just on sponsorship. Yeah, and I just want to give Joe a macro level on the kind of concert supply, just so we're aligned. You know, this is going to be a great year. We're pacing ahead on our arena and our amphitheater business, which is the higher-margin business, as we've talked about. So we're going to have a fabulous year. We're going to be able to monetize that around the world. We actually look at 25. Looks like it's going to be a monster stadium year again, as that pipe kind of reloads itself.

Joe Berchtold: Yeah.

Joe Berchtold: That's helpful and then just on sponsorship.

Speaker Change: Yeah, and I, just want to give Joe macro level on a constant supply <unk>. The line. This is going to be a great year, where we're replacing a head on our arena amphitheater business, which is the higher margin business as we've talked about so we're gonna have a fabulous here, we're gonna be able to to.

Speaker Change: Two qualities that around the world, we actually look at 25 looks like it's gonna be a monster Stadium. Your again is that pipe kind of reloads itself. So I wanted to make sure on a macro level, we're seeing continual artist apply <unk>.

Michael Rapino: So I want to just make sure, on a macro level, we're seeing continual artist supply at record levels. And, you know, we made decisions this year. Usher could have been in stadiums. He wanted, we wanted to get him in arenas this year and put a great show together. Justin Timberlake, Bad Bunny, in arenas versus stadiums.

Speaker Change: Record levels and we're you know we made decisions. This year I sure could have been in stadiums. You wanted we wanted to get him in arenas. This year put a great show together, Justin Timberlake Bad Bunny Arena versus stadium. So it makes those trade off in different years, but the good news for US is we're going to have a fabulous arena amphitheater year festival year around the world that's going.

Michael Rapino: So he makes those trade-offs in different years. But the good news for us is we're going to have a fabulous arena and amphitheater year festival year around the world. That's going to drive our overall airline margin cash flow, probably bounce back with some bigger stadium activity in 25. And then the cycle will continue. But as we've stated on our investor day, we look at this to be a continual growth industry year over year for the next 10 years on a global basis, and we'll see that again this year.

Speaker Change: Drive our our our overall AOE margin cash flow.

Speaker Change: Bounce back with some bigger stadium activity and 25, and then the cycle will continue but as as we stayed at over over our Investor Day. We we look at this a continual growth year over year industry for the next 10 years on a global basis, and and we'll see that again this year sponsorship.

Michael Rapino: To your macro point, the demand we're seeing is strong as ever. I just spent some time in New York with my team and some clients, Verizon, et cetera. Our demand in terms of clients that want to be part of this live experience surge right now is stronger than ever. As you can imagine, most CMOs want to sit down with us and talk about how they can be part of this live explosion on a global basis. So we're seeing, as you've seen, this MasterCard update deal with Verizon and others to be announced.

Speaker Change: <unk> macro point the demand, we're seeing strong as ever I. Just spent some time in New York with my team with some clients Verizon et cetera, our demand in terms of clients that want to be part of this this live experience.

Speaker Change: Surge right now is stronger than ever as you can imagine <unk> want to sit down with us and talk about how can they have some part of this law of explosion on a global basis. So we're seeing as you've seen this mastercard and updated deal with Verizon and others to be announced where are pipers up year over year.

Unnamed Speaker: Our pipe is up year over year, and we expect this to continue to be a double-digit growth business. As we've seen in the past, we've seen nothing slowing down. Great. Thank you both. And the next question comes from the line of Brandon Ross with LightShed Partners. Hey, everyone. How are you doing?

Speaker Change: Are we expect this to continue to be a double digit growth business as we've seen in the past, we see nothing nothing slowing down there.

Speaker Change: Okay, great. Thank you both.

Speaker Change: And the next question comes from the lineup Brandon Ross with Lightshed Partners. Please proceed with your question.

Brandon Ross: Everyone How're you doing.

Brandon Ross: So you talked about AMP in the answer to the last question a lot in the makeshift this year. I was actually curious about what I want to better understand the future upside in the AMP business. Your portfolio has been fairly fixed for a long time, and you've done a pretty incredible job of increasing per capita over the last decade. Where does the real growth come from in the amphitheater? Yeah, I'll start, and you can go in there, Joe.

Brandon Ross: <unk>, you talked about amps, and the <unk> and the answer to the last question a lot in the mix ship. This year I was at.

Brandon Ross: Curious what.

Brandon Ross: I want a better understand the future upside in the App business your portfolio has been fairly fixed for <unk>.

Brandon Ross: One time, and you've done a pretty incredible job of increasing per caps over the last decade, where does the real growth come from and in the amphitheater business at this point.

Speaker Change: Some follow ups.

Speaker Change: Yeah, well I started feeling you condone their Joe Yep, just letting yourself I think Brandon you've heard us talk about it at our venue Nation day, you know, we we think we're in a you know where where does this double double win right. Now we think we have global scale that will still continue because of international markets and more to come.

Michael Rapino: I think, Brandon, you've heard us talk about it at our brand new Nation Day. You know, we think we're in a, you know, we're in this double double win right now. We think we have a global scale that will still continue because of international markets and more to come. But we also have an incredible amount of opportunity to monetize the scale we have. And, you know, for the first 10 years, we built scale. We just kind of ran the scale. In the last couple years since COVID, we launched our brand new nation division and really focused on hiring up and bringing in new skill sets around hospitality, best in class, food and beverage best in class, VIT clubs, etc.

Speaker Change: But we also have an incredible amount of opportunity to monetize the scale, we have and you know for the first 10 years without spilt scale, we just kind of ran the scale.

Speaker Change: The last couple of years since Covid, and we lost our venue nation Division and really focused hiring up in in bringing a new skill set throughout hospitality best in class.

Speaker Change: Average best in class B I T clubs et cetera, we think are amphitheaters or run you know very well as I say, they run very well like southwest airlines, they're very efficient.

Michael Rapino: We think our amphitheaters run very well, as I said, they run really well, like Southwest Airlines, they're very efficient, and they've been great machines to-date. What we're seeing when we invest capital on site, we're getting 20-30% returns on capital when we turn that grassy area into a VIP club, a membership club. You're gonna see Jones Beach this summer.

Speaker Change: And they've been great great machines to date, but we think we're seeing when we invest capital on site.

Speaker Change: We're getting 20, 30% returns on capital when we.

Speaker Change: Turn that that grassy area into the I P Club a membership club you're Gonna see Jones Beach. This summer when you walk up to Jones Beach. This summer amphitheater, you're Gonna call Me and go now I get it now I see what these these machines.

Michael Rapino: When you walk out to Jones Beach this summer in an amphitheater, you're going to call me and go, now I understand. Now I see what these machines could double their AOI when you start to really treat them as, as arenas have been doing a much better job about how we upscale onsite, elevate the experience, and take over. So we think the 50 amphitheaters we have, the bones of them are amazing. They do an incredible job.

Speaker Change: [noise] machines could double the <unk> when you start to really treat them as as arena have been doing a much better job about how do we ups ups upscale on site elevate the experience and uhm and take over so we thank thee.

Speaker Change: The 50 empathy, we have the bones of them are amazing they do incredible job their efficient we think we can double the business as we start to actually look inside the hood and upgrade onsite, whether it's R. Liquid desk idea that has been a huge serves in our food and beverage or <unk> custom.

Michael Rapino: They're efficient. We think we can double the business as we start to actually look inside the hood and upgrade onsite, whether it's our liquid death idea that has been a huge surge in our food and beverage, our shaker cup, our own custom branded liquor that we launched onsite, to our new clubs we're rolling out to our VIP boxes, to our elevated. If you look at our overall amphitheater business, about 9% of it is premium. We think that should be 30 to 35% to give you some kind of macro numbers.

Speaker Change: Ah Brandon Uhm liquor that we danced on site.

Speaker Change: To our new clubs were rolling out to our V. I P boxes to our elevated if you look at our overall amphitheater business about nine per cent of it has premium we think that should be 30 to 35 per cent to give you a kind of macro numbers, if you've doubled that overnight, you're <unk> with with double double in the long run. So just take your current house.

Michael Rapino: If you doubled that overnight, your business would double in the long run. So just take your current house, upgrade it, double your capacity for a VIP business, and your business would double. That's the simplest way to look at it.

Speaker Change: Upgrade it.

Speaker Change: Double your capacity on a b I T business in your business with a double.

Speaker Change: The simplest way to look at it.

Speaker Change: Mmm, Yeah, and then the other half of it Brandon is that that's making more on the shows from the fans that are 10 is in terms of the volume of shows.

Joe Berchtold: Yeah, and then the other half of it, Brandon, is that making more on the shows from the fans that attend is in terms of the volume of shows. Right now, with our current portfolio, if you assume a typical AMP has about four months of activity on average, our utilization rate is running about 35%. So we still have a fair bit of space that we can put more shows into our amphitheaters. And while we haven't been growing by leaps and bounds, we are continuing to add an AMP here and an AMP there as part of our hyperlocal strategy of continuing to look for more spots that we can put an AMP in. Great

Speaker Change: Right now with our current portfolio. If you assumed typical amp has about four months of activity on average or utilization rate is running about 35 per cent. So we still have a fair bit of space that we can put more shows into our amphitheaters and while we haven't been growing by leaps and bounds. We are continuing to add an app here.

Speaker Change: There on our hyper local strategy of continuing to look for more spots that we can we can put an amphitheater in.

Speaker Change: Great then over the past couple of years I know platinum spend a pretty big tailwind for probably both the ticket master business and the concerts business.

Unnamed Speaker: Then over the past couple of years, I know Platinum's been a pretty big tailwind for probably both the Ticketmaster business and the concert business. And I was curious how far along you are in the rollout of platinum ticketing, both domestic and international, and then how you expect platinum to continue to contribute to the growth at both. I'll start, and Joe can jump in. You know, just think of Platinum. It's dynamic pricing, right? It's just pricing smarter. And that's, that's been a skill that we've been, you know, we have a great in-house team that wakes up every day working with artists, agents, managers on this. And it may be as simple as, you know, just figuring out how to reprice things like a Tuesday night in Phoenix is worth something different than a Saturday night in LA. So being a lot smarter, the way you can price your inventory, price the front better, so the back sells out, etc. We think if you look at it, I'll give you two kinds of ways to look at it. Outside of the US, we're in the first inning.

Speaker Change: And I was curious how far along you are in the rollout of of platinum ticketing, both in domestic and international and then how you expect platinum to continue to contribute to the growth at both concerts and took a mask.

Speaker Change: I'll I'll start with Joe can jump in and I, just think a platinum as soon as it's dynamic pricing right. It's just pricing smarter.

Speaker Change: And that's that's been a scale but.

Joe: <unk> you know we have a great in house teen wakes up every day working with artists agents managers on this and it may be as simple as you know just figuring out how to reprice Tuesday night in Phoenix is worth different than a Saturday night in L. A so being a lot smarter or <unk>. The way you can price of your inventory.

Joe: Twice the front better so the <unk> price et cetera, we think if you look at it I'll give it to to kind of ways to look at it outside of the U S were in the first inning. So we're just rolling this out around the world. So that's the great growth opportunity. Obviously, if we have it in Europe, but still still an emphasis stages.

Michael Rapino: So we're just rolling this out around the world. So that's a great growth opportunity, obviously. We have it in Europe, but it is still in the infancy stages.

Joe: We're going to expand the down in South America, Australia et cetera, So first I need on the international business well received when it gets there promoters are are anxious for artists are anxious for it because they see when they stole an arena in Baltimore verses Melan right now they they look at the grossest and say Wow, we're leaving too much on the tape.

Michael Rapino: We're going to expand it down to South America, Australia, etc. So, first inning on the international business, and well received when it gets there. Promoters are anxious for it, artists are anxious for it, because when they sell an arena in Baltimore versus Milan right now, they look at the grosses and say, wow, we're leaving too much on the table for the scalpers, let's price this better. So that's our best sales pitch. So you're going to see that Excel.

Joe: <unk> for for the Scalpers, let's price this better so that's our best sales pitch, so you're gonna see that excel and I would say on the U S business, we're probably about in the fifth inning. The obvious stuff is done at the top in some artists on the kind of the P. One platinum, but getting all the way through the business to campus theaters. The b shows the C.

Michael Rapino: And I would say in the US business, we're probably about in the fifth inning. The obvious stuff is done at the top end, some artists on the kind of P1 Platinum, but getting all the way through the business, amphitheaters, the B shows, the C, just dynamically pricing it better and smarter all along the way. We see it happen.

Joe: Just dynamically pricing that better and smarter all along the way we see it happen. It will it will increase your take flow and self and sell through rate all the way to the to the day that Hot time, you open the gates up so we still think that's a multi year opportunity to continue to grow our top line.

Michael Rapino: It will increase your take flow and sell through rate all the way to the day, the time you open the gates. So we still think that's a multi-year opportunity to continue to grow our top line and thus our bottom line.

Joe: Slash bottom lines.

Joe: It the other way I think about a Brandon is that the typical secondary ticket is still almost twice the price of a primary ticket. So is Michael said, just take a platinum as being the market price.

Joe Berchtold: The other way I think about it, Brandon, is that the typical secondary ticket is still almost twice the price of a primary ticket. So, as Michael said, just think of platinum as being the market price for tickets. Artists are going to be more and more saying, I want that through the house. I want that to be closer to really take away that scalper mark. And then, finally, not

Joe: Yet artists are gonna be more and more sane I want that through the house I want that to be closer to really take away that scalper margin.

Speaker Change: [noise], Yeah, and then finally not.

Unnamed Speaker: Not to overstay my welcome here, but one thing I noticed. I've been, I think, covering your stock for many years now, and I've never seen you give the double-digit AOI expectation in Q4. It's always Q1, where you give that guidance. What gave you the confidence to give that type of guidance at this stage versus the usual Q1? I'll start.

Speaker Change: Not to overstay their welcome here, but [laughter] one thing I've noticed I've been I think covering your stock for many years now and I've never seen you give.

Speaker Change: The double digit a y expectation in queue for it's always Q1, where you give that guidance. What gave you the confidence to give that type of guidance at this stage versus the usual Q1.

Speaker Change: I'll start I think first of all our show pipeline is up double digits very strong for driven by the arenas and amphitheaters as we've talked about micro gave all the reasons why were highly confident in our ability to execute it or amphitheaters now so the volume of fans that were confident in having in our ability to to draw.

Joe Berchtold: I think first of all, our show pipeline is up double digits, very strong for driven by the arenas and amphitheaters. As we've talked about, Michael gave all the reasons why we're highly confident in our ability to execute at our amphitheaters now. So the volume of fans that we're confident in having and our ability to drive profitability off of those fans gives us the visibility and confidence that we're going to deliver double-digit growth. Thank you. And the next question comes from the line of David Karnovsky. Hey, thank you.

Speaker Change: Give the profitability off of those fans.

Speaker Change: Gives us the visibility and confidence that we're going to deliver double digit growth this year.

Speaker Change: Great. Thank you guys.

Speaker Change: And the next question comes from the line of David Karnofsky with J P. Morgan. Please proceed with your question.

Joe Berchtold: I guess first, Joe, I wanted to see if you could provide some additional detail on the CapEx guide, where you are deploying the growth capital and what's driving the incremental spend, including for maintenance versus 23. And I know you've discussed potentially buying venues abroad, so I don't know if you could say anything on the pipeline for deals and how that could potentially look relative to past years. And then, just secondly, in November, you had described a DOJ investigation as in the mid-stages, so I wanted to see if you had any update here in terms of timing or where things stand overall with the program. Sure, let me start with the CapEx.

David Karnofsky: Thank you I guess first job wanted to see if you could provide some additional detailing the capex guide, where you're deploying to grow the capital and and what's driving the incremental spend including for maintenance versus twenty-three and I know you discuss potentially buying venues abroad. So I don't know if you could say anything in the pipeline for deals and how that could potentially look relative to.

David Karnofsky: Past years, and then just secondly in November you have described a D O J investigation as in mid stages. So I wanted to see if he had any update here in terms of <unk>.

David Karnofsky: Timing or where things stand overall with the probe. Thanks.

Speaker Change: Sure I'm, sorry about the cat back as we notice or projected right now about 540 million Capex two thirds rep. Jan one third maintenance. If you look at the Rev. Jan about $300 million of that is either new venues or re major.

Joe Berchtold: As we notice, we're projecting right now about 540 million dollars in CapEx, two-thirds RevGen, one-third maintenance. If you look at RevGen, about 300 million of that is either new venues or major renovations of existing facilities and buildings, and about half of that, about $150 million, is our top four projects, which would include a major revamp of Foro Sol, which is the top international stadium in the world down in Mexico City. Michael talked about Jones Beach. Those projects would collectively have a return in the 20s. So we're definitely seeing some chunkiness now in some projects that cost tens of millions of dollars. We happen to have four of them line up this year, and that drives a lot of that.

David Karnofsky: Sure renovations of existing.

David Karnofsky: Buildings and about half of that about $150 million is our top four projects would include a major revamp of four Oh, So I'll, which is the top international stadium in the World down in Mexico City, Michael talk about Jones Beach, those projects would collectively have a return of twenties. So yeah, we're definitely seen some chunkiness.

David Karnofsky: Now and some projects the cost tens of millions of dollars happen to have separate for them line up this year that drives a lot of that.

Joe Berchtold: The other rev gen would be a combination of tactical things in existing venues, a new VIP club, a new viewing deck, rock boxes, some new bar designs that generally bring extremely high returns, generally 40s, 50s plus percent sort of tactical improvements, and some things that Ticketmaster heavily tied in with the sponsorship group and the creation of new ad units. And then maintenance is a combination of, mainly venues, some Ticketmaster. I think that's continuing to rise at a rate lower than our revenue, lower than our ticket sales. So we're watching that pretty closely and making sure we have it. In terms of the venue pipeline, I think we've been talking about it since our investor day. We're really happy about the Venue Nation team, our global development team. These were skills really going into COVID we didn't have in-house at any level.

David Karnofsky: The other Rev. Jen would be a combination of tactical things in an existing venues a new V. I P club, a new viewing deck rock boxes, some new bar designs that are extremely high returns generally.

David Karnofsky: Forties fifties plus per cent sort of tactical improvements and some things that ticketmaster heavily tied in with the sponsorship grew up in there and the creation of new AD units and then maintenance is a combination mainly venues some ticketmaster.

David Karnofsky: Continuing to rise at a rate lower than our revenue lower than our ticket sales. So.

David Karnofsky: We're watching that pretty closely and making sure we have that limited.

David Karnofsky: In terms of the venue.

David Karnofsky: Venue pipeline I think we've been talking about it since our Investor Day, you know, we're we're really we're really happy about the venue nation team. Our global development team. These were skills really gone into cover it'd be didn't have in house at any any any level <unk>, we're kind of best in class at this point, we we've really scaled over the last three.

Joe Berchtold: We're kind of best in class at this point. We've really scaled over the last three to four years, and we have incredible global teams working around the band. And we're just seeing, as we hope, when we walk into those RFPs that we weren't invited to, we're walking in and holding our own, and winning right now some key venues around the world that we'll be continuing to announce. So we see it scaling over the next five years much higher than it was in the past, just because we hadn't focused that much on international arenas before. And we see a great path forward. And then, on DOJ, I don't think we've got a lot to report.

David Karnofsky: Four years got incredible global teams working around the around the band and where do you see as we hope when we're walking into those rfps that.

David Karnofsky: We weren't invited to we're walking in and uhm and holding around and and winning winning right now some of the key venues around the world that will will be continued to announce so we see it scaling over the next five years are much much higher than it was in the past because you hadn't focus that much on international Arena.

David Karnofsky: <unk> and Uhm your secret password on these.

David Karnofsky: And then finally D O J I don't think we've got a lot to report we continue to answer any questions. They have they controlled the timing.

Joe Berchtold: We continue to answer any questions they have. They control the timing, and http://TheBusinessProfessor.com. We're 100% qualified. And the next question comes from the line of Cameron Manson Perrone with... Thanks, too, if I can.

Speaker Change: And yeah, we'll we'll watch it play out, but we don't have any specific updates.

Speaker Change: I work on a per cent cooperative.

Speaker Change: And the next question comes from the line of camera and that Manson Perone with Morgan Stanley. Please proceed with your question.

Manson Perone: Thanks to if I can.

Unnamed Speaker: Michael, you've spoken in the past about kind of the current big shift in the promotion business, being a move from kind of national booking to increasingly global booking. I'd love to hear just an update on where you think we are in that shift today. And then I thought it was interesting in the release that you're seeing all-in pricing lead to higher conversion. Is that something that you think can lead to adoption at third-party venues, or do you think that stays at your operated venue portfolio for now? Thanks, guys... I'll answer.

Cameron Perone: Michael you've spoken in the past about Canada current big shift in the promotion business.

Cameron Perone: Being a move from kind of national booking in towards increasingly global booking allowed to here just an update on where you think we are in that shift today and then I thought it was interesting and relief that you're seeing all in pricing lead to higher conversion is that something that you think.

Cameron Perone: Can lead to adoption a third party venues or do you think that stays at your operated venue portfolio for now thanks guys.

Cameron Perone: [laughter].

Speaker Change: All of all of the pricing I'll start <unk>, yeah. We're we're actually surprised some throat because we were always sceptical. If we would be the one <unk>. There was any conversion that would hurt us but I think consumers are are are loving the idea they can see upfront.

Michael Rapino: I mean, all in pricing. I'll start. We're, yeah, we're, actually surprised and thrilled because we were always skeptical. If we were the ones leading the path, there was any conversion that would hurt us.

Michael Rapino: But I think consumers are, are, are loving the idea. They can see up front. Ultimately, they're shopping multiple tabs anyway, so they're probably figuring out the true costs are the same. So yeah, we think it's a great test. I would say that most of all the Congressional, Senate, all the stuff Joe and I are talking to everybody about, this seems to be the common torch that everyone's running with. So I would assume this ends up being legislated somewhere over time, and I would assume others are going to start jumping on the all-in wagon as a good step forward for consumers so we can worry about the other, other issues around scalping, etc. And the promoter shift, it is a, you know, it's always a, it's a three-level shift, right?

Speaker Change: Ultimately their shopping multiple tabs anyway, so uhm, probably figuring out the true costs are the same so yeah. We think it's a great test I would say the most of all of the congressional Senate. All this stuff Joe and I are talking to everybody about this it seems to be the common torched everyone's running with so I I would assume this defense.

Speaker Change: Being the legislated somewhere over time, and I would assume others are gonna start jumping on the on the oven wagon. That's a good step forward for consumers. So we can worry about the other other issues around scalping et cetera.

Speaker Change:

Cameron Perone: Promoter shift it's it is a you know it's it's always it's.

Cameron Perone: It's a three level shift right, it's a local promoter of national promoter on a global promoter.

Michael Rapino: It's a local promoter, a national promoter, and a global promoter. Still lots of great local promoters. Why do we have 100 offices in 40 countries? Concerts still have to be executed locally, so you have to make sure you have the best local staff in the market that can execute at scale on an ongoing basis. Artists have absolutely evolved over the last 10 years, much like they probably have one global record label, one global agent, and one global publishing company, as touring has become their most important category and expensive. These artists are putting on a show... I was at the Drake show last night.

Cameron Perone: Still lots of great local promoters why we have 100 offices in 40 countries.

Cameron Perone: Conscious still have to be executed local so you have to make sure you have the best local staff and market that can execute at scale an ongoing basis.

Cameron Perone: Artist.

Cameron Perone: The evolved over the last 10 years much like they probably have one global record label and one global agent One Global publishing company is touring became the most important category inexpensive. These artist putting on was that the Drake show last night I mean he's.

Unnamed Speaker: I mean, he's, Thank you all so much for joining us today, and thank you all for joining us on this incredible show he's carrying to those fans at a huge cost to give back. So the artists, you know, over the last 10 years, have started to look for a much more national or global partner, whether it's us, AEG, CTS in Europe, because their needs have changed. And so we're going to be talking about a review of data, marketing, sponsorship, ways to help them think about their global business. Do they go to Japan, or not?

Cameron Perone: Credible show he's carrying to those fans at a at a huge cost to give back. So the artists are you know over the last 10 years have started to look for a much more national or global partner, whether it's us a G. M. C. T S. In Europe cause their needs have changed they needed a pop capital they needed Oregon.

Cameron Perone: <unk> that have a wider view I'm data marketing sponsorship ways to help help them think about their global business to go to Japan or not to they do Hong Kong before or after do we do Pacific rim, what's the shipping costs, how do we get it all they're so artists have become Globalised uhm brands an artist concern.

Michael Rapino: Do they do Hong Kong before or after? Do we do Pacific Rim? What's the shipping cost?

Michael Rapino: How do we get it all there? So artists have become globalized brands, and artists are consumers, like the consumers we've talked about. And the younger the manager and the younger the artist, the more global they're looking for. So if you're kind of the new manager managing superstar that's popped up on a global basis, you absolutely want to sit down with someone and talk about your global touring plans and when you go where before with one common agenda in mind.

Cameron Perone: <unk> with the consumers we've talked about so absolutely every artist and the younger the manager and the younger the artist the more global they're looking for so if you're you're kind of a new manager managing superstar. That's pumped on a global basis, you absolutely want to sit down with someone and talk about your global touring plans and when do you go where.

Cameron Perone: <unk> with with one common agenda in mind. So we're we're seeing that continual shift and I think you'll just see that continue to move over the next five years.

Michael Rapino: So we're seeing that continual shift, and I think you'll just see that continue to move over the next five years. Interesting. Thanks. And the next question comes from the line of Jason Bazinet with... I just had a quick question on CapEx.

Speaker Change: Interesting thanks.

Cameron Perone: And the next question comes from the line of Jason Bazinet with Citibank. Please proceed with your question.

Jason B. Bazinet: I just had a quick question on Capex you guys had been so consistent with this sort of two 2.5% of revenues on Capex.

Jason B. Bazinet: You guys have been so consistent with this sort of two, two and a half percent of revenues on CapEx. Given what's happening in your business and the high returns on invested capital we can see from the outside, why doesn't it make sense to sort of open up the envelope and spend a bit more? I love this question, um, I think we, you know, as Joe and I talked about coming out of COVID, the priority the last three years was obviously, you know, build back up that cash bank. We drained a lot during COVID.

Jason B. Bazinet: Given given what's happening in your business in the high returns on invested capital we can see from the outside.

Jason B. Bazinet: Why why doesn't it make sense to sort of open up the envelope and spend a bit more.

Speaker Change: Love This question.

Cameron Perone:

Cameron Perone: I think I think.

Cameron Perone: I think we you know it was would you Wanna talk about coming out of Covid you know prior to last for your ears was obviously.

Cameron Perone: Build back up that cash bank, we drink lots of Covid. So we wanted to get the balance sheets strong again get our staff everyone back in place higher the skills, we needed and and plot to a real kind of five to 10 year strategy here. So we.

Unnamed Speaker: So we wanted to get the balance sheet strong again, get our staff, get everyone back in place, and give us all the tools we need to deliver this ambitious growth plan that we laid out in our investor day. So you'll see us, you know, move up and down depending on if there's a big opportunity, but we've been pretty consistent in that we can deliver the growth that we've outlined for you with that current number. And I think the market just accepts it more if we demonstrate it and then do it a bit more. As you said, we've been demonstrating that return on the invested capital; as we continue, we spend a bit more, we demonstrate those returns, the market will let us spend a bit more. The market doesn't tend to want you to take big leaps and big turns. So we're not doing that.

Cameron Perone: You know the way we are producing <unk> cash flow returned now and it's.

Cameron Perone: Given us all the tools, we need to deliver this ambitious growth plan that we laid out in our Investor day, So you'll see US you know move.

Cameron Perone: Move up and down depending if there's a big opportunity, but we we've been we've been pretty consistent that we can deliver our growth that we that we've outlined for you with that current number.

Cameron Perone: And I think I think the market just accepts it more if we demonstrate it and then do it a bit more.

Unnamed Speaker: You said, we'd been demonstrating that return on invested capital as we continue we spend a bit more we demonstrate those returns the market allowed to spend a bit more market doesn't tend to want you to take big leaps and big turn so we're not doing that we're just steadily building a pipeline and as the market sees the demonstrator returns.

Unnamed Speaker: We're just steadily building a pipeline, and as the market sees the demonstrated returns, then you earn the right to continue to do more of it. Looking forward to the number being three or three and a half percent of press. Thanks.

Cameron Perone: Then you earn the right to continue to do more of it.

Unnamed Speaker: Alright, looking forward to the number being three or 3.5% depressed [laughter]. Thanks.

Cameron Perone: And the next question comes from the line of Ashton Wells with Evercore ISI. Please proceed with your question.

Unnamed Speaker: And the next question comes from Ashton Wells with Evercore ISI. Please proceed. Thank you for the question. It would be great to get an update on the real-time indicators you guys are seeing on the consumer front, whether that's the performance of on-sales or how shows are closing or on-site spending. I'll start and then Joe can jump in.

Ashton Wells: Thank you for the question that'd be great to get an update on the real time indicators you guys are seen on the consumer Fry, whether that's the performance and on sales or how shows are closing or onsite spending.

Ashton Wells: I'll start joking jump in I mean <unk>.

Unnamed Speaker: I mean, I see the ticket sale, my daily ticket sale counts. We just went on sale. He's within the last week on Usher, Justin Timberlake, Jennifer Lopez, just announced.

Ashton Wells: I see the ticket fill my daily ticket sale counts, we just went on sale.

Michael Rapino: He's within the last week on Usher, Justin Timberlake, Jennifer Lopez, just announced to <unk>.

Unnamed Speaker: Jolly Roll this morning, these shows are flying out the door from top to bottom, so we're seeing no slowdown in the consumer. I was in Columbus, Ohio, for a sold-out Drake show last night.

Jelly: Jelly roll. This morning, the shows were flying off the door from top to bottom.

Cameron Perone:

Unnamed Speaker: So yeah <unk>, yeah, no no slow down on the on the consumer from I was in Columbus, Ohio for sold out Drake show last night, we had two two nights in a row sold out incredible high merch numbers, they were buying all the sweatshirts and uhm.

Unnamed Speaker: We had two nights in a row sold out. Incredible high merch numbers. They were buying all the sweatshirts.

Unnamed Speaker: And on-site, the GM told me they were doing really strong numbers. So we're seeing, at our current business, they're buying and showing up across the country and across the globe right now. And we're seeing most of these on sales still selling front to back, meaning the most expensive tickets to lease. So we're seeing strong demand at all price points. We just went on sale with our lawn passes for our amphitheaters, up double digits in sale on that for the price conscious fan. So that's going well. Shows are closing.

Unnamed Speaker: Onsite the the G. M told me that they were we're doing really strong number. So we're seeing at our at our current business, they're buying and showing up by across the country and across the globe right now.

Unnamed Speaker: And were seen most of these on sale spelled salary in front to back me. The most expensive tickets the lease so we're seeing strong demand at all price points. We just went on sale with our law passed as for our amphitheaters up double digits and stay on that for the price conscious span.

Unnamed Speaker: So that's going well <unk> shows are closing if we really have the best per cap onsite spending right now for it or theaters and clubs just given it's Q1 those numbers continue to be strong and and and show your on your growth. So all fronts are showing a strong consumer demand globally.

Unnamed Speaker: If we really have the best per cap on site spending right now for our theaters and clubs, just given that it's Q1, those numbers continue to be strong and show year-on-year growth. So all fronts are showing strong consumer demand. Thank you. And the next question comes... Line for David Katz with Jeffries, please proceed. Everyone, thanks for taking my question.

David Brian Katz: Thank you.

David Brian Katz: And the next question comes from a long line of David Cats with Jeffries. Please proceed with your question.

David Brian Katz: <unk>. Thanks for taking my question when we think.

Unnamed Speaker: When we think about the different business lines and, and what I'm essentially getting at is whether there's an acceleration of growth in sponsorship and advertising that is begotten from this outperformance and this acceleration that you're seeing on the concert side of things later on. Yeah, David, this is Joe.

David Brian Katz: Think about the different business lines.

Joe Berchtold: How would we think about the trajectory or arc of growth and sponsorship relative.

Joe Berchtold: Two two concerts and what I'm essentially getting at is whether there is an acceleration of growth in sponsorship and advertising that you know that that is forgotten from you know this outperformance in this you know this acceleration that you're seeing in the <unk> on the concert side of things later.

Unnamed Speaker: <unk>.

Unnamed Speaker: Yeah, David It's Joe I think absolutely there are increasing benefits the scale on the sponsorship business one of the things that the brands are telling us. They are looking for is they wanna. They wanna reach customers at a time when they are open to the brands, which we have but they want to make sure that it's at scale that at scale really.

Joe Berchtold: I think absolutely there are increasing benefits to scale in the sponsorship business. One of the things that brands are telling us they're looking for is they want to reach customers at a time when they're open to the brands, which we have, but they want to make sure that it's at scale, that scale really matters. So they're not trying to do a lot of different little programs.

Joe Berchtold: [noise] matters, so they're not trying to do.

Joe Berchtold: A lot of different little programs and so we're seeing a lot more to man. We're we're over a billion dollars in revenue on on on the.

Joe Berchtold: And so we're seeing a lot more demand; we're over a billion dollars in revenue on the sponsorship side, we're closing in on 150 million fans. So, over 600 million tickets sold on Ticketmaster. So we've now got a scale, and that scale continues to beget more scale. So absolutely, we see a very strong continued. So just to follow it up, and I'm not fishing for any kind of guidance or anything like that, but the growth rate and sponsorship obviously could outgrow and grow more than potentially that of concerts in some future day, right, if we're sort of plotting those lines. I think if you look historically, look back since 2010, concerts have consistently grown faster than our sponsors.

Joe Berchtold: Sponsorship side were Hunter and closing at 150 million fans. So we over 600 million tickets on Ticketmaster. So we've now got a scale in that scale continues to beget more scale. So absolutely we see very strong continued <unk>.

Joe Berchtold: <unk> in that business.

Speaker Change: So just just to follow it up and I'm not fishing first of any kind of guidance or anything like that but the the the growth rate in sponsorship.

Joe Berchtold: Obviously could could outgrow and grow more than potentially you know that have concerts at some future day.

Joe Berchtold: Friday, who are sort of plotting those large.

Joe Berchtold: Well I think if you look historically look back since 2010 concerts is consistently grown <unk>.

Joe Berchtold: Faster than our sponsorship business and rethink it continues to be a straw.

Joe Berchtold: I think it continues to be a... Strong Double. Got it. Okay. Thank you. There are no further questions at this time. I would like to turn the floor back over to Michael Rapino.

Joe Berchtold: Strong double digit growth business.

Speaker Change: Got it okay. Thank you.

Michael Rapino: There are no further questions at this time I would like to turn the floor back over to Michael for Pinot for any closing comments.

Michael Rapino: Thank you I appreciate all your support and we will talk to you at the number that you want.

Michael Rapino: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Joe Berchtold: [noise].

Michael Rapino: Thank you, appreciate all your support and we will talk to you at the end of Q1. This concludes today's teleconference. Thank you. There's a heat wave comin' at us Too hot to think straight, too cold to panic All of our problems just feel dramatic Now we're running to the first bar that we find, yeah Ooh, one step to the right We headed to the dive bar we always thought was nice Ooh, you run to the left Just with me in the middle, boy, I can't read the mind This ain't texting, ain't no holdin' Play our cards down, down, down, down Fuckin' like this, hey, pull your keys up Let's go round, round, round, round, round And I'll be damned if I cannot dance with you Come pour some sugar on me, honey, ooh It's a real-life boogie in a real-life hoedown Don't fear, come