Live Nation Posts Record Revenue For '17

Live entertainment giant reports $10.3 billion in revenue, up 24 percent year over year

  • by Glenn Peoples
  • Published: February 28, 2018

Live Nation CEO Michael Rapino was one of the people who spoke on the conference call, Feb. 28, about the compnay's stellar earnings. (Photo by Waterproof Pictures)

Live Nation Entertainment had another record-setting year in 2017 as total revenue rose 24 percent to $10.3 billion, a $2 billion gain from the prior year, the company announced Tuesday.

Concerts were worth $7.9 billion in 2017, up 26 percent, while concert attendance-from 30,000 shows in 40 countries-grew 21 percent to 86 million.

Revenue from Live Nation's 97 festivals rose 14 percent. Its festival portfolio includes the eclectic Lollapalooza, electronic dance music giant Electric Daisy Carnival, and the long-established Reading and Leeds festivals.

Concerts gained an incremental $210 million from acquisitions made in 2017, among them United Concerts in Utah, Cuffe & Taylor in the U.K., and the BottleRock Napa Valley festival in the wine region north of San Francisco.

Speaking about amphitheater shows, President Joe Berchtold said during Tuesday's earnings call that the company expects an increase in business in 2018.

"If anything, the trend in [amphitheaters] over the last five years has been on the upswing" and Live Nation will look to expand its amphitheater presence through buying and building. "They're an incredible piece of business," he said.

Amphitheater growth has the additional benefit of Live Nation's attention to consumer spending at the venues. A focus on high-end products and increased points of sale - creating a better ability to move the lines - resulted in 9 percent growth in per-head spending.

Concerts don't - and aren't expected - to generate a profit, and in 2017, concerts had an operating loss deepen to $94 million from $63 million.  Instead, the Live Nation business model relies greatly on the high margins of its sponsorship and advertising division. Sponsorship revenue grew 18 percent to $445 million. Although its operating income dropped to $252 million from $365 million in 2016, sponsorships were a vital contributor to the company's bottom line.

Sponsorship revenue sources include venue naming rights, on-site signage and exclusive partnerships that now include Citi for credit cards and PepsiCo for beverages. Acquisitions made in 2017 added $21 million to the division's revenue.

Ticketing operating income declined 53 percent to $91 million, although this deserves a caveat. Ticketing division Ticketmaster's $110 million settlement in a lawsuit with Songkick hit the books in the fourth quarter of 2017. Without that expense, ticketing operating income would have been $191 million, an improvement from $174 million in 2016.

That settlement was blamed for driving down operating income for the fourth quarter, which dropped to a $202 million loss, down from a $37.2 million loss in fourth quarter 2016.

With its 2017 revenue gains, Live Nation has grown to gigantic proportions. At $10.3 billion, Live Nation had almost twice the annual revenue of the largest music company, Universal Music Group, whose 2017 revenue was $6.9 billion.

The concert division alone, at $7.9 billion, surpasses any music company.

  • by Glenn Peoples
  • Published: February 28, 2018