Live Nation has announced cost-reduction plans while the Shubert Organisation has furloughed roughly 30% of its employees and US cinema giant AMC Entertainment is close to filing for bankruptcy. Here we look at how the Covid-19 outbreak has hit the live events and ticketing sector today…
Live Nation chief executive Michael Rapino has announced he will forgo his $3m annual salary as part of measures to cut spending by $500m in 2020 amid severe losses from the live events blackout due to Covid-19.
The live entertainment giant has unveiled a series of financial moves to protect its concert business amid the shutdown, including a new $120m credit facility and a ‘cost-reduction programme,’ which includes Rapino’s 100% pay cut.
Live Nation’s other senior executives will also face up to a 50% reduction in salaries, with president Joe Berchtold now receiving $650,000, down from $1.3m, according to an SEC filing.
Live Nation says further cost reduction efforts will include “hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs, and reduction or elimination of other discretionary spending, including, among other things, travel and entertainment, repairs and maintenance, and marketing”.
The firm expects its revenue for the first quarter of 2020 to be down by approximately 20%. As of March 31, Live Nation reportedly sold over 45 million tickets to shows scheduled for 2020, down just 2% from the same time last year.
Through March, Live Nation has had 8,000 shows impacted by the event stoppage starting in mid-March of this year, with 15 million tickets sold for these shows. Of this, 7,000 shows with 14 million tickets sold were postponed, accounting for 90% of tickets impacted. The remaining 10% of tickets, or 1.6 million, were for shows that were cancelled.
The postponed edition of Coachella Valley Music and Arts Festival in California will reportedly cost the local economy $700m as local restaurants and businesses are feeling the losses.
The festival, which welcomes around 100,000 punters each year, was scheduled to kick off this past weekend and followed by another weekend of the festival from April 17-19. The area was also scheduled to host Stagecoach Music Festival the following weekend.
The Covid-19 outbreak has forced the festivals to delay the events until the autumn, with Coachella now set to take place across two weekends from October 9 to 18, while Stagecoach has been moved to October 23-25.
The Shubert Organisation has furloughed roughly 30% of its employees due to the Covid-19 enforced shutdown of Broadway theatres in New York City, according to Variety.
Those in administrative, sales and marketing positions were impacted by the move, with the theatre firm providing health insurance privileges for three months.
The Shubert Organisation is the largest theatre owner on Broadway and claims to be the country’s oldest professional theatre company. It owns 17 Broadway theatres and two Off-Broadway venues, including the Belasco, the Winter Garden, the Majestic and the Ethel Barrymore.
The company also owns ticketing brands Telecharge and Broadway Inbound.
Broadway League, the industry’s trade organisation, announced that theatres will remain closed until at least June 7. The announcement means that the initial April 13 target for reopening the venues, which have been shut due to the Covid-19 outbreak since March 12, has evaporated.
A total of 41 theatres are located in the district in Manhattan and support nearly 90,000 jobs. Thirty-one productions were cancelled on the opening day of the shutdown alone, with concerns increasing about the financial impact for stakeholders.
AMC Entertainment, which owns 630 cinemas across the US, is reportedly close to filing for bankruptcy due to the impact of Covid-19 on its venues.
According to the New York Post, the theatre chain has been in talks with a law firm to move forward with a Chapter 11 filing.
AMC has seen all its 630 cinemas closed and has furloughed 25,000 employees
Newly launched American football league the XFL has filed for Chapter 11 bankruptcy, just three days after laying off its employees.
The XFL is an eight-team American football league created to fill the void between NFL seasons.
The league, which kicked off in early February, was cancelled in March due to the Covid-19 pandemic and has now filed for bankruptcy protection in Delaware.
The filing lists estimated assets and liabilities of between $10m and $50m.
“Unfortunately, as a new enterprise, we were not insulated from the harsh economic impacts and uncertainties caused by the Covid-19 crisis,” the league said in a statement.
TicketNetwork has announced pay cuts to senior staff and executives above a specific threshold in order to keep the company afloat during the Covid-19 outbreak.
Founder and chief executive Don Vaccaro informed the more than 500 employees of the news in a company-wide email, adding “every single one agreed” on the cuts.
Vaccaro said: “During the next few weeks, our focus as a company is going to be on strategies to come back from this stronger than ever.
“We want to be able to move quicker, reduce expenses, and make the most of the opportunities that await once everybody gets back to business. Many of our competitors are doing things differently in this crisis. But rather than take the easy way by slashing our staff, we are making that a measure of last resort. We believe this approach is going to leave us well positioned to grow for our clients and customers in 2020 and beyond.”