Live Nation Entertainment Reports Fourth Quarter And Full Year 2016 Results

LOS ANGELES, Feb. 23, 2017 /PRNewswire/ --

Full Year 2016 - A Record Year for Live Nation

• Revenue Up 15% to $8.4 Billion
• Operating Income Up 48% to $195 Million
• Free Cash Flow Up 5% to $352 Million
• AOI Up 12% to $646 Million at Constant Currency
• Live Nation Concerts Attendance of 71 Million, Up 12%
• Sponsorship & Advertising Revenue Up 13%
• Ticketmaster Fee-Bearing GTV Up 16% at Constant Currency
• Secondary GTV Up 26% at Constant Currency

Live Nation Entertainment (NYSE: LYV) today released financial results for the three and twelve months ended December 31, 2016. 

Live Nation delivered its sixth consecutive year of record results across revenue, adjusted operating income, or AOI, and free cash flow, and also delivered operating income growth in 2016.  For the year, revenue was up 15%, operating income was up 48%, and free cash flow was up 5%, all as reported, and AOI was up 12% at constant currency.  Our core divisions - concerts, ticketing and advertising - each delivered their strongest operating income and AOI results in the history of the company.

We continue to see the tremendous power of live events, with strong global consumer demand.  Live is a truly unique entertainment form - it cannot be duplicated.  It is elevated, not threatened, by technology and is borderless.  Fans around the world can now discover, follow, share and embrace artists, creating greater demand for live shows.  We believe the live business will continue to have strong growth for years to come as fans globally drive demand, artists are motivated to tour, and technology drives conversion.

Concerts Market Share Growth Accelerated in 2016

Live Nation continued to grow its global market share, adding over 7 million fans globally in 2016 for a total of over 71 million fans, driving revenue up 18%, operating income up 88%, and more than doubling concerts AOI.  We built on our global leadership position in every part of our business, with double-digit fan growth in both North America and internationally, and across stadiums, amphitheaters, festivals, theaters and clubs.

We continued expanding our global footprint in 2016 as we added promoting offices in Germany, South Africa, and Israel, taking us to 40 countries worldwide.  Across all our markets, we invested $4.4 billion to put on 26 thousand shows, with Live Nation now by far the largest financial supporter of artists in music.

Fans more than ever find the live experience, from club shows to arenas to festivals, a top entertainment choice and the best way to celebrate their favorite artists and share the experience with other fans.  This, combined with an ongoing shift of consumer spending toward experiences, is helping drive a structural increase in demand for concerts globally.  And in addition to fan growth, with this demand we are also seeing an increasing willingness by fans to spend more for tickets to the show and once they are there.

Average ticket prices for our shows increased by 5% in 2016, with high single- to double-digit growth at amphitheaters, arenas and stadiums.  These increases were driven largely by higher pricing for the best tickets, as artists more effectively captured the true value from their shows.

Once at the show, average per fan spending grew as well.  At our amphitheaters, spending grew by 9% to over $22 as we added more high-end products, improved the quality of our food and beverage offering and increased our points of sale.

Our growth is continuing into 2017, a further sign of the tremendous fan demand for our concerts and the success of our global growth strategy.  Ticket sales are up double digits year-on-year through February 17^th, driven by sales for arena and stadium shows, and we are confident we will again see strong growth in fan demand across our business this year.

Advertising Continued Strong Growth in 2016

We grew our high-margin sponsorship & advertising revenue by 13%, operating income by 4%, both as reported, and AOI by 10% at constant currency in 2016, with our 71 million onsite fans providing a unique advertising platform for our sponsors, which we then extend through online advertising.

In 2016, our top strategic sponsors were a key driver of our growth as our 50 plus sponsors that spend over $1 million per year with us collectively spent $245 million to reach our fans, up 20% from last year.

Sponsorship at our festivals, connecting brands with those onsite millennial fans, continued to grow as we increased festival sponsorship contribution margin by 18% at constant currency and festival sponsorship contribution margin per fan by 12% at like-for-like festivals for the year.

At the same time, we continue to amplify our onsite advertising with our online reach.  In 2016, we generated over 4 billion views across Live Nation sites and platform partners including Snapchat, Facebook and YouTube, providing our brand partners with further scale and reach.

We expect continued advertising growth at historical levels in 2017, with over 70% of our budgeted advertising revenue for the year already contracted, and pacing double digits ahead of last year at this time.

Ticketmaster Extends Global Leadership in Ticketing

In 2016, Ticketmaster continued growing its global leadership in ticketing, with fee-bearing gross transaction value, or GTV, up 16% and overall GTV up 11% to $28 billion at constant currency while delivering 480 million tickets to fans in 28 countries.  This drove our 11% increase in ticketing revenue, 10% increase in operating income, both as reported, and 6% growth in AOI at constant currency.

Our secondary ticketing GTV growth of 26% in 2016, at constant currency, was driven by the premise that we should safely and transparently provide all options to fans at Ticketmaster, which has been embraced by ticket buyers.  Overall, the Ticketmaster platform continues to demonstrate its effectiveness in selling tickets to fans, with 6 of the top 10 sales months ever occurring in 2016, and conversion rates up across both online and mobile platforms.

Our recent investments in Ticketmaster's enterprise platform and open API now allow clients to sell tickets on partner sites, driving the sale of over 10 million tickets in 2016.  This has further deepened our relationship with teams and artists who are looking for enhanced reach with sites such as Spotify, Bandsintown, Facebook, Groupon and Costco, and more in progress.


With the combination of a stronger than ever ticketing destination at Ticketmaster and increasingly broad distribution, Ticketmaster is better positioned than ever to continue growing its global leadership position in ticketing.  This success is continuing into 2017, as ticket sales are up 9% through February 17^th, positioning us for continued growth.  

2017 Growth Drivers

As I have noted, the key leading indicators for each of our businesses are up year-on-year into February, pointing to continued strong growth in 2017.  We plan on holding more concerts for more fans in more countries than ever before.  We expect to sell more advertising, both onsite and online.  And through continued product innovation and expanded distribution at Ticketmaster, we plan on selling more tickets and driving increased conversion.

Our success in 2016 reaffirms that Live Nation has created an unparalleled live platform, bringing 550 million fans in 40 countries to those unrivaled 2-hour events each year.  The live business continues to have a strong growth opportunity with artists touring as their primary source of income and using concerts as the best way to engage and connect with their fans.

For Live Nation, we believe this sets us up well as our scale and breadth continue to grow and we drive increased value with our business model of higher profits per show, more advertising and increased ticket sales.  All of this creates tremendous runway for Live Nation to continue delivering the level of growth we have demonstrated over the last several years.

Michael Rapino
President and Chief Executive Officer
Live Nation Entertainment, Inc.

The company will webcast a teleconference today at 5:00 p.m. Eastern Time to discuss its financial performance.  Interested parties should visit the "Events & Webcasts" section of the company's website at investors.livenationentertainment.com to listen to the webcast.  Supplemental statistical and financial information to be provided on the call, if any, will be available under the Reports section at the same link.  A replay of the webcast will also be available on the Live Nation website.

About Live Nation Entertainment:

Live Nation Entertainment, Inc. (NYSE: LYV) is the world's leading live entertainment company comprised of global market leaders: Ticketmaster, Live Nation Concerts, Live Nation Media & Sponsorship and Artist Nation Management.  For additional information, visit investors.livenationentertainment.com.  

Forward-Looking Statements, Non-GAAP Financial Measures and Reconciliations:

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements regarding the growth prospects of live events and the related strength of global consumer demand, artist touring frequencies and onsite spending by fans, both in 2017 and beyond; expected advertising growth at a historic level in 2017; Ticketmaster's global ticketing leadership position and growth potential; the company's anticipated growth in 2017 at levels consistent with recent years, and related plans to hold more concerts, sell more advertising and sell more tickets with increased conversion in 2017; and the expected growth in the company's scale and breadth as it executes on its business model.  Live Nation wishes to caution you that there are some known and unknown factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, including but not limited to operational challenges in achieving strategic objectives and executing on the company's plans, the risk that the company's markets do not evolve as anticipated, the potential impact of any economic slowdown and operational challenges associated with selling tickets and staging events.

Live Nation refers you to the documents it files from time to time with the U.S. Securities and Exchange Commission, or SEC, specifically the section titled "Item 1A. Risk Factors" of the company's most recent Annual Report filed on Form 10-K, and Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K, which contain and identify other important factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date on which they are made. All subsequent written and oral forward-looking statements by or concerning Live Nation are expressly qualified in their entirety by the cautionary statements above. Live Nation does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided herein.

Adjusted Operating Income (Loss), or AOI, is a non-GAAP financial measure that the company defines as operating income (loss) before acquisition expenses (including transaction costs, changes in the fair value of accrued acquisition-related contingent consideration obligations, and acquisition-related severance and compensation), depreciation and amortization (including goodwill impairment), loss (gain) on disposal of operating assets and certain stock-based compensation expense. The company uses AOI to evaluate the performance of its operating segments. The company believes that information about AOI assists investors by allowing them to evaluate changes in the operating results of the portfolio of the businesses separate from non-operational factors that affect net income, thus providing insights into both operations and the other factors that affect reported results. AOI is not calculated or presented in accordance with GAAP.  A limitation of the use of AOI as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in the company's business. Accordingly, AOI should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP.  Furthermore, this measure may vary among other companies; thus, AOI as presented herein may not be comparable to similarly titled measures of other companies.

Constant Currency is a non-GAAP financial measure. The company calculates currency impacts as the difference between current period activity translated using the current period's currency exchange rates and the comparable prior period's currency exchange rates. The company presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations.

Free Cash Flow is a non-GAAP financial measure that the company defines as AOI less maintenance capital expenditures, less net cash interest expense, less cash taxes, less net distributions to noncontrolling interest partners, plus distributions from investments in nonconsolidated affiliates net of contributions. The company uses free cash flow, among other measures, to evaluate the ability of its operations to generate cash that is available for purposes other than maintenance capital expenditures. The company believes that information about free cash flow provides investors with an important perspective on the cash available to service debt and make acquisitions. Free cash flow is not calculated or presented in accordance with GAAP. A limitation of the use of free cash flow as a performance measure is that it does not necessarily represent funds available for operations and is not necessarily a measure of the company's ability to fund its cash needs. Accordingly, free cash flow should be considered in addition to, and not as a substitute for, operating income (loss) and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, free cash flow as presented herein may not be comparable to similarly titled measures of other companies.

Free Cash is a non-GAAP financial measure that the company defines as cash and cash equivalents less ticketing-related client funds, less event-related deferred revenue, less accrued expenses due to artists and cash collected on behalf of others, plus event-related prepaids. The company uses free cash as a proxy for how much cash it has available to, among other things, optionally repay debt balances, make acquisitions and fund revenue generating capital expenditures. Free cash is not calculated or presented in accordance with GAAP. A limitation of the use of free cash as a performance measure is that it does not necessarily represent funds available from operations and it is not necessarily a measure of our ability to fund our cash needs. Accordingly, free cash should be considered in addition to, and not as a substitute for, cash and cash equivalents and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, free cash as presented herein may not be comparable to similarly titled measures of other companies.

SOURCE Live Nation Entertainment