Live events like concerts, baseball games and car races will remain a healthy and viable business over the long term despite the 2020 impact of COVID-19, in the view of Liberty Media chairman and billionaire media sage John Malone.
“The thesis of live events is still a good one,” Malone said at his company’s annual meeting, held virtually and streamed online Thursday morning. “There will be a health solution here, not a structural solution, that will return these events. Human beings are gregarious by nature. Here in Florida, the bars are open and they’re pretty packed.”
Malone — an early leader of the modern telecommunications revolution with his first company, cable operator TCI — runs Liberty as a holding company with assets across many verticals. Under Liberty’s corporate umbrella are a frequently shifting, sometimes confusing group of tracking stocks that have over the years included whole or part ownership of many media and entertainment concerns. Its current portfolio includes the Atlanta Braves; Formula One Group; Live Nation; SiriusXM Holdings and iHeartMedia.
Malone offered his insights Thursday as businesses across many sectors — but especially in areas of entertainment involving large gatherings of people — continue to suffer the effects of the pandemic. While many states have seen some businesses reopen this month and there is widespread optimism for the second half of the year, much of the societal and business landscape remains shrouded in uncertainty.
“Everybody’s been scrambling to improve their balance sheets so they don’t have liquidity problems,” Malone noted. Live Nation raised $1.2 billion through the debt markets in recent weeks.
Gate receipts and merchandise won’t be essential, he argued, so even lower-capacity events or sports without fans would enable the business model to work on some level given revenue from TV and digital rights.
“Our original thesis of live events representing the best place to be on content, for TV or digital, remains intact,” Malone said. “Unfortunately, we’ve had this pandemic. I personally believe there will be a therapy or vaccine sooner rather than later that will get us back closer to normal.”
Greg Maffei, CEO of Liberty Media and chairman of Live Nation, said the question of consumer behavior as the pandemic passes is a “great unknown.” The company is adopting a “cautious attitude,” he said, but executives believe they can “build businesses that operate in a post-COVID world. … There will be ways to have live events. Will they be as scaled and profitable as historically? I think that remains to be seen.”
Fewer than 10% of Live Nation customers have asked for refunds for ticket purchases, Maffei noted, and few Braves ticketholders have bailed on the baseball season.
“There is demand for live events,” Maffei said. “The question will be what we can do in the world of vaccines and therapeutics and social distancing to make those work for everybody involved.”
On an earnings call with Wall Street analysts earlier this month, Live Nation CEO Michael Rapino said he’s optimistic the live event business will bounce back soon. He said he anticipates experimenting over the summer in smaller venues in more open states and countries, edging back by 2021 toward something resembling the concert industry as it used to exist. He said a large survey conducted by the company indicates that would-be concertgoers will return if they feel secure that the environment is clean and safe — and there is lots of hand sanitizer available.
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