Michael Rapino, the president and chief executive of Live Nation, has claimed that the spread of coronavirus would have no cost to the entertainment giant, despite cancellations.
During an earnings call last week, Rapino said that if a show needs to be cancelled for whatever reason, it does not cost the firm much money, as “we don’t pay an artist until they play.”
He added: “When you have a month, two months – anytime you cancel in advance, there’s actually no cost incurred yet, the artist isn’t at the show, the people aren’t in the venue, you haven’t paid the cost.
“So this is – the easiest economic challenge for us is to reroute and reschedule a show no cost to us.”
Rapino acknowledged that the live industry in countries and regions where the outbreak is more widespread would suffer, but does not anticipate any impact on Live Nation’s bottom line.
“Most of our business doesn’t start till the middle of June onwards,” Rapino said. “So the next few months, we’ll have some cancellations, I assume, here and there in some arenas and clubs, but the heart of the business happens this summer.”
In Live Nation’s fourth quarter and 2019 financial report, which was released last week, the firm reported revenue growth of 7% to $11.5bn in 2019, with a 10% rise in ticket sales year-on-year to 38 million.
Ticketmaster, which is owned by the entertainment giant, has seen operating income rise by 15% and AOI by 11%. The firm said much of its growth came through reduced customer acquisition costs across both primary and secondary ticketing and from increased secondary ticketing volume, notably the NFL and other sporting events.
It also noted that its international ticketing business drove growth in fee-bearing tickets and gross transaction value (“GTV”), led by strong international concerts ticket sales.