Monday, March 05, 2007

Live Nation Earning Call Report

So this call was brief and to the point. They are still operating at a loss, but a much narrower loss. They've acquired a lot of very valuable properties in the past year and while there were expenses involved in the purchases, they were one time costs, so the losses were brief investments which should (hopefully!) bring more profits (and get them out of the red) soon.

OK, enough money stuff.......
Burning Questions Answered!!

What’s been sold? What markets are they pulling out of?

Over the last year, Michael Rapino has brought singular focus to this company. The focus is MUSIC! The sports division was sold off, as well as a number of theater properties. By the end of the year most of their theater properties will be gone. They have been selling venues in smaller markets, but they didn't make much mention of where they are pulling out next. They did--however--mention that for tax reasons they would be unable to sell Boston Opera House, Hilton Theater, and a number of UK theater properties this year, so those will be hanging around for at least a few more quarters.

They also plan to hold on to the motor sports division--for the time being. Though Rapino did say that they would reevaluate the motor sports holding after the theater sale.

What’s been acquired? What markets are they entering?

In the last few quarters, Live Nation acquired Trunk, House of Blues, Concert Promotion International, and Music Today in order to expand their work in the global music business. The acquisition of CPI was the most notable and profitable acquisition making them the number one promoter in Canada and bringing in billions in revenue. In addition, they announced last week that they were expanding the French and Spanish markets with the Gamerco purchase.

What is their mission now (they were looking for a clarity of mission last we checked)?

MUSIC, MUSIC, AND MO MUSIC. As Rapino mentioned in the Credit Suisse presentation, they want to monetize every aspect of the live experience from the minute you go online to buy the ticket to the moment you peel away from the parking garage, your car full of artists' swag (Trunk LTD), and your car slapped full of the artist's bumper stickers.

Where are they with House of Blues acquisition?
All set! They are looking to expand the brand internationally!

Where are they on the online store with Music Today?
No mention.

What's up with food/beverage deals? Ticketing deals?
It looks like they will be renegotiating with Aramark. They don't want to be in the food and beverage business but "they would like to increase their margin." AS for Ticketmaster, it didn't sound so promising. Live Nation definitely wants a more direct relationship with the artist. It "will be a longer process to see if Ticketmaster and us can have a great future together and meet each other’s needs.”

Anything else interesting?

* They seem really excited about the Ozzfest deal and are interested to see whether it might work as a new model. They are looking for artists that are willing to share the (ever-expanding) backend, so that they can reduce their upfront expenses.

* Guidance-wise, the company is concerned about the summer season. “Doesn’t look like the superstar lineup is on the road….At this point it is fairly early in the year.." Rapino said. However they are very excited about The Police tour

* The booking strategy for ampitheaters will change this year, but to what? I dunno yet, but those things have GOT to stop losing money hand over fist

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