Add
LYV to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| LYV > SEC Filings for LYV > Form 10-Q on 7-May-2009 | All Recent SEC Filings |
7-May-2009
Quarterly Report
"Live Nation" (which may be referred to as "we", "us" or "our") means Live Nation, Inc. and its subsidiaries, or one of our segments or subsidiaries, as the context requires. You should read the following discussion of our financial condition and results of operations together with the unaudited consolidated financial statements and notes to the financial statements included elsewhere in this quarterly report.
Certain statements contained in this quarterly report (or otherwise made by us or on our behalf from time to time in other reports, filings with the Securities and Exchange Commission, or the SEC, news releases, conferences, internet postings or otherwise) that are not statements of historical fact constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, notwithstanding that such statements are not specifically identified. Forward-looking statements include, but are not limited to, statements about our financial position, business strategy, competitive position, potential growth opportunities, potential operating performance improvements, the effects of competition, the effects of future legislation or regulations and plans and objectives of our management for future operations. We have based our forward-looking statements on our beliefs and assumptions based on information available to us at the time the statements are made. Use of the words "may," "should," "continue," "plan," "potential," "anticipate," "believe," "estimate," "expect," "intend," "outlook," "could," "target," "project," "seek," "predict," or variations of such words and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.
Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those set forth under Item 1A.-Risk Factors in our 2008 Form 10-K, as well as other factors described herein or in our annual, quarterly and other reports we file with the SEC (collectively, "cautionary statements"). Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the applicable cautionary statements. We do not intend to update these forward-looking statements, except as required by applicable law.
Executive Overview
Our mission is to maximize the revenue generated by the live concert experience driven by serving three clients-artists, fans and sponsors. The highlights for each of our segments for the first quarter of 2009 were:
North American Music
• In North American Music, we are executing our 2009 plan of reducing our overall show count by eliminating our least profitable shows thereby increasing our average per show profitability. In the first quarter, this strategy resulted in a 10% increase in average show profitability driven by:
• a $10.48 increase in revenue per fan;
• a 27% increase in on-site, non-ticket revenue; and
• a reduced show count of 1,898 events compared to 2,081 events in the first quarter of 2008, with total attendance of 3.7 million compared to 4.7 million in 2008.
• In February 2009, we opened our new House of Blues club in Boston, bringing our total number of House of Blues clubs to twelve.
International Music
• We believe that we have delivered a strong show line-up for 2009 in International Music as demonstrated by a 30% increase over the first quarter of 2008 to a total of 856 promoted events.
• Our attendance increased by over 0.3 million fans over the prior year. Strong arena events included Cirque du Soleil, Tina Turner, Oasis and AC/DC.
• We have sold over 649,000 tickets for our summer outdoor festivals, as of the end of the first quarter. Ticket sales for major festivals such as Reading, Leeds and T in the Park are already sold out or are currently expected to sell out soon.
• We added to our international venue portfolio through the acquisition of an additional Academy Music Holdings Limited Group, or AMG, venue in Glasgow, Scotland.
Ticketing
• In December 2008, we launched our new ticketing platform to sell tickets to events at most of our owned and/or operated venues in North America. We began selling tickets in some international cities in October 2008. Through this ticketing system, we now have control over our customer data and are able to create enhanced ticket-based concert products. We believe this will also allow us to capitalize on new distribution channels and expand our sponsorship opportunities.
• Since launching our new ticketing platform, we have sold 4.4 million tickets globally, including 4.2 million tickets sold in the first quarter of 2009.
• Of these total tickets, 2.7 million have been sold primarily for North American Music events in our owned and/or operated venues (excluding tickets sold at the box office directly). Although we are currently selling tickets for events in future quarters, the ticket service charges are recognized as revenue upon completion of the event. Selling, general and administrative expenses are recognized as they are incurred. As a result of overhead costs incurred to support ticket sales in the first quarter of 2009, this segment experienced an increased year over year operating loss.
Other Information
• As of March 31, 2009, we have 304 local, national and international corporate sponsors. Some of our new sponsorship arrangements in 2009 include JTI, Anheuser-Busch and Comcast.
• We continue the process of seeking regulatory approval for our pending merger with Ticketmaster Entertainment, Inc., which we announced in February 2009. We remain confident that this transaction will be completed in the second half of 2009.
Our Separation from Clear Channel
We were formed through acquisitions of various entertainment businesses and assets by our predecessors. On August 1, 2000, Clear Channel Communications, Inc., or Clear Channel, acquired our entertainment business. On August 2, 2005, we were incorporated in our current form as a Delaware corporation to own substantially all of the entertainment business of Clear Channel. On December 21, 2005, the separation of the business previously conducted by Clear Channel's live entertainment segment and sports representation business and the distribution by Clear Channel of all of our common stock to its shareholders was completed in a tax free spin-off. Following our separation from Clear Channel, we became a separate publicly traded company on the New York Stock Exchange trading under the symbol "LYV".
Segment Overview
Our reportable segments are North American Music, International Music and Ticketing. In addition, we have United Kingdom theatrical venue operations and other businesses which are included under other operations. Prior to 2009, we reported an Artist Nation segment, which is now reported in the North American Music and International Music segments. This change has been made to be consistent with the way we are now managing the business. Our business formerly reported as Artist Nation includes the promotion and/or production of global tours and also provides other services to artists. These artist relationships tend to be long-term and typically involve multiple revenue streams for an artist. We enter into these relationships in order to fill the distribution platform of our businesses with recurring events, both domestically and internationally. This is not a separate part of these businesses but is just one more facet of our North American Music and International Music segments. Therefore, we are now allocating these activities based on where the profits for service to these artists are being generated.
The segment results for all periods presented have been reclassified to conform to the current year presentation.
North American Music
Our North American Music segment principally involves the promotion of live music events in our owned and/or operated venues and in rented third-party venues and the operation and management of music venues primarily in the United States and Canada, as well as providing various services to artists. While our North American Music segment operates year-round, we experience higher revenue during the second and third quarters due to the seasonal nature of shows at our outdoor amphitheaters, which primarily occur May through September.
To judge the health of our North American Music segment, we primarily monitor the number of confirmed events in our network of owned and/or operated and third-party venues, talent fees, average paid attendance and advance ticket sales. In addition, at our owned and/or operated venues, we monitor attendance, ancillary revenue per fan, premium seat sales and corporate sponsorship sales.
International Music
Our International Music segment principally involves the promotion of live music events in our owned and/or operated venues and in rented third-party venues, the operation and management of music venues and the production of music festivals outside of North America. While our International Music segment operates year-round, we experience higher revenue during the second and third quarters due to the seasonal nature of our international festivals, which primarily occur June through August.
To judge the health of our International Music segment, we primarily monitor the number of confirmed events in our network of owned and/or operated and third-party venues, talent fees, average paid attendance and advance ticket sales. In addition, at our owned and/or operated venues, we monitor attendance and ancillary revenue per fan. Because this business is conducted in foreign markets, we look at the operating results from our foreign operations on a constant dollar basis.
Ticketing
Our Ticketing segment manages our digital platform and the new Live Nation ticketing platform which was launched in December 2008. This segment is involved in managing our internal ticketing operations and online distribution activities, including the ongoing enhancement of our primary website, www.livenation.com.
To judge the health of our Ticketing segment, we primarily review the number of tickets sold through our ticketing operations, the percentage of visitors to our website that buy tickets, the number of unique visitors to our websites and the overall number of customers in our database.
|
|