MUMBAI: Live Nation released financial results for the three months ended June 30, 2009 today.
“During the first six months of 2009, we sold 16.3 million tickets which exceeded our plan by more than one million tickets,” said Michael Rapino, President and Chief Executive Officer of Live Nation. “Highlighting the underlying strength of our business, our ticket sales going into the peak summer concert season surged, as reflected in our record level of deferred revenue. We are putting fans in seats as a result of our strong concert line-up and our value priced promotions. Our ‘No Service Fee’ promotions have been a huge success, generating nearly 500,000 ticket sales in the second quarter, with most of the benefits expected to play out in the third quarter. These promotions are highly effective for Live Nation as they are increasing awareness around our concert season. We believe that any reduction in margin that we sacrifice on the ticket purchase will be more than made up for in incremental ticket sales and additional on-site spending. We have now proven that we can motivate the casual fan to come to concerts, thereby growing our core business and reducing our historic 40% unsold inventory levels.”
“The year-over-year variation in our North American Music financial results during the quarter was in line with our internal expectations as we move toward what we expect will be a strong third quarter concert season,” Rapino continued. “We had never planned on exceeding our record results from 2008 in North American Music, but instead planned to grow our overall adjusted operating income through robust International growth. Our North American strategy was centered on increasing profits per show through cost management and incremental ticket sales on reduced show counts in 2009 in an effort to reduce our capital risk profile. We believe that the combination of these trends point to a robust third quarter and support our positive outlook for 2009, continuing our trend of annual adjusted operating income growth in order to increase free cash and reduce long-term debt.”
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Highlights:
Reported revenue of $1.1 billion reflects a decline of $86.3 million due to foreign currency exchange movements. Revenue on a constant currency basis was up 2% over the prior year.
International Music continued to show strength with increased margins in the second quarter driven by higher promotion activity and improved festival results.
Deferred revenue as of June 30, 2009 was $894.1 million as compared to a balance of $782.3 million as of June 30, 2008.
Through our Ticketing segment, we have sold 7.6 million tickets globally since the beginning of 2009, including 4.3 million tickets sold in the second quarter of 2009.
Successfully launched our “No Service Fee Wednesday” promotion, selling nearly 500,000 tickets to our shows in North America in the second quarter.
Our LiveNation.com network was ranked 7th by Nielsen NetView among the most-visited domestic music websites, with 4.3 million unique visitors in June 2009.
We continue the process of seeking regulatory approval for our pending merger with Ticketmaster Entertainment, Inc. and we currently expect that this transaction will be completed in the fourth quarter of 2009. For the second quarter of 2009, we incurred $14.9 million of acquisition expenses for this transaction. These costs are now required to be expensed under new accounting rules in 2009 and therefore reduced our operating income for the period.
