Let’s get this over with. Live Nation, which makes a living on live events, saw revenue plunge 98% last quarter to $74 million and swung to a loss of $588 million from a profit of $176 million the year before. It was the first full COVID-19 quarter and the company was expected to bleed red ink.
CEO Michael Rapino can only look ahead. And he did as the company reported financial results for the three months ended in June. He said he expects live events to “return at scale in the summer of 2021,” with ticket sales ramping up in the quarters leading up to summer shows.
He noted that 86% of fans opted to keep tickets for rescheduled shows and that two-thirds of fans are keeping tickets for canceled festivals so they can go to next year’s show. The company cited strong early ticket sales for festivals in the U.K. next summer, for example, with Download and Isle of Wight pacing well ahead of last year.
DraftKings Shares Slump On News Of IRS Daily Fantasy Tax, Spotty Q2 Financials
Between tickets held by fans for rescheduled shows and festival sales, the company, which owns Ticketmaster, said it’s already sold 19 million tickets to more than four thousand concerts and festivals scheduled for 2021, “creating a strong baseload of demand that is pacing well ahead of this point last year.”
Can Live Nation last that long? Rapino says yes. “Over the past three months, our top priority has been strengthening our financial position to ensure that we have the liquidity and flexibility to get through an extended period with no live events.”
The company cited an $800 million cost reduction target and a $1.4 billion cash management program target in 2020. And it said that at the end of the second quarter, it had total cash and cash equivalents of $3.3 billion. The company’s gross cash burn rate – the amount it spends in a month – is about $185 million per month. And it recently amended its credit agreement with lenders to suspend elements of its debt covenant until the end of next year if it needs to.
“The company believes this level of liquidity and our associated burn rates, along with our credit actions, provide it with the ability to fund operations until the expected return of concerts at scale in the summer of 2021, preceded by ticket sales earlier in the year.”
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.