Live Nation says concert business looking good but not yet out of the woods
The concert season is off to a good start, but don't set your cigarette lighter too high just yet.
That was the message from Live Nation Entertainment Inc., the country's largest concert promoter, which reported a 17.4% increase in its first quarter revenue and a narrower loss thanks to growth in its ticketing and festivals businesses.
The Beverly Hills live event conglomerate posted sales of $849.4 million in the quarter ended March 31, up from $723.4 million a year ago. The company lost $54.3 million, or 27 cents a share, down from a $123-million loss, or 83 cents a share, a year earlier. That loss included $77.5 million in write-offs related to Live Nation's 2010 merger with Ticketmaster and other factors.
The improvements were driven by Live Nation's concerts business, which accounted for more than half of the company's revenue. Thanks to strong ticket sales by Lady Gaga, U2, Prince and others, its concerts division saw a 10.1% uptick in revenue to $449.3 million, from $408.1 million a year ago. Its ticketing business, which includes Ticketmaster, TicketWeb and TicketsNow, grew 41.7% to $296.3 million, from $209.1 million last year.
But Live Nation Chief Executive Michael Rapino cautioned against projecting those gains into the rest of the concert season, which peaks during the second half of the summer.
"Even though the numbers look good for the first quarter, we think it will normalize ... and maybe even eat into our early leads," Rapino told analysts in a conference call. "This year, the good stuff went out early. Now, we're in the thick of the season, and we're starting to see some softness" among lesser-known second- and third-tier performers.
Part of the uncertainty stems from an economy that continues to stagnate. Irving Azoff, Live Nation's executive chairman, also pointed to soaring gas prices, which eats into the bottom line of tour acts as well as the discretionary income of potential concert goers.
"We can better predict what's going on if we knew what gas prices are going to be," Azoff told an analyst who asked about the company's projections for the next few quarters.
One factor that has contributed, albeit in a minuscule fashion, to Live Nation's profits is Charlie Sheen, whose personal drama temporarily fueled ticket sales for the actor's live stage show, "Violent Torpedo of Truth," which is produced by Live Nation.
Asked by an analyst whether Sheen's tour helped the company's bottom line, Rapino answered, "We absolutely did. It's rock 'n roll, and we're not the moral cops, but we did deliver to the bottom line for the company."
-- Alex Pham
Photo: Lady Gaga cuts loose. Credit: Rick Diamond/Getty Images