Good afternoon. My name is John and I'll be your conference operator today. At this time, I would like to welcome everyone to Live Nation's Third Quarter 2024 Earnings Call. I would now like to turn the call over to Ms. Yong. Thank you, Ms. Yong. You may begin your conference.

Good afternoon and welcome to the Live Nation third quarter 2024 earnings conference call. Joining us today is our President and CEO, Michael Rapino; and our President and CFO, Joe Berchtold. We would like to remind you that this afternoon's call will contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company's anticipated financial performance, business prospects, new developments, and similar matters. Please refer to Live Nation's SEC filings, including the risk factors and cautionary statements included in the company's most recent filings on Forms 10-K, 10-Q, 8-K for a description of risks and uncertainties that could impact the actual results. Live Nation will also refer to some non-GAAP measures on this call. In accordance with the SEC Regulation G, Live Nation has provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in our earnings release. The release reconciliation can be found under the Financial Information section on Live Nation's website. With that I'll turn it over to Joe for brief remarks.

Thank you, everyone, for joining our quarterly conference call. I think we'll go right into questions on the release. And as everybody knows, we have our investor presentation coming up Wednesday and then again on Thursday.

Hi. Thanks for the questions. First, you gave a lot of very positive forward-looking indicators in the release. I was hoping you could help us think about how that's eventually going to flow through the P&L. And I guess on the Ticketmaster side, it's been a tough year. Assume that outlook on stadiums is going to reverse that trend, but how will that look over Q4, Q1 and next year from a timing perspective? And then on Concerts, it was a big margin year. Can that continue next year in addition to the obvious topline growth that the indicators are showing?

Thanks, Brandon. This is Joe. I'll start and then Michael can add. Starting with Ticketmaster and starting with Q4, as we noted for October first quarter of the month, Ticketmaster sales were up 15% year-on-year. Concerts, they're up 23%. So, we're expecting that great stadium and arena pipeline to start to manifest itself in Q4 and deliver a very strong Q4 in Ticketmaster. Next week alone we have over 200 stadium and arena shows going on sale. So, we're in a period of unprecedented level of activity for Ticketmaster in Q4. And then that will continue into Q1 and through next year. We expect next year's Ticketmaster to look more like '23 where you've got that great volume of stadium activity that you get with the on-sale, but then you also get some of the deferred events that you have in Europe that you recognize as the events play off. So, a strong Q4 and strong next year for Ticketmaster. Concerts, obviously, next year, expectations strong for continued AOI growth, having growth in arenas and amphitheaters from our baseline of this year. Added to that, more like '23 or beyond in stadiums should result in very strong revenue growth, very strong AOI growth. I think it's probably a bit early to know the exact mix of all those venues for margins, but overall, both strong revenue and AOI growth for the Concert business.

Okay. And a lot of investors think that the recent developments are going to be a very good thing for you. I'm sure you've studied it very closely. Just wanted to hear your thoughts on how there might be an approach to antitrust and the associated remedies. Do you think they will favor structural or behavioral? And then separately, from a timing perspective, when do you think you'll next have an opportunity to get to the table with the DOJ? Thanks.

Thanks. Yes, I think it's still very early in the transition process. So, we're hesitant to say too much, but absolutely, we are hopeful that we'll see a return to the more traditional antitrust approach where the agencies have generally tried to find ways to solve problems they see with targeted remedies that minimize government intervention in the marketplace. And without getting into the specifics, at least some parts of the case, we believe reflect a much more interventionist philosophy today than you'd expect of a Republican administration. Obviously, the request to break up Live Nation and Ticketmaster would be an example of that highly interventionist approach. So, we'll obviously be ready to engage as soon as they are. They need to get through the appointments and get things settled on their end, but we'd certainly be hopeful that we could start engaging with them early next year.

Thank you.

Hi. Thank you. Just two from me. First, on the revision to 2023 financials. Can you walk through what triggered that and what the notable changes are? And I didn't see it in the release, but you have an updated '23 AOI and free cash flow. And then second, you called out for Q4 a possible mid-teens FX impact to NOI due to Latin America. Can you just refresh us on the general mix of Latin America versus other regions in the fourth quarter? And then any early view on how to think about FX into '25? Thanks.

Sure. So, first on the revisions to the financials. For context, we had a non-cash, non-operating tax adjustment that we had to make. This relates to when we purchased Ocessa and a difference between statutory and US GAAP accounting on some non-consolidated investments. So, it was just on the US side. We paid the taxes in Mexico, but we missed it in the US. It was not material to our '20 or '23 numbers, but working through with the auditors, we made the decision that it made sense to restate those numbers. So, again, a one-time non-cash non-material adjustment to those numbers. In terms of the FX impact, we had previously talked about Q4 this year looking strong in Latin America, which it still does. All the operating metrics we've been talking about in terms of both the supply and demand profile are looking good. We've also just seen a downturn in the FX on the Latin American markets over the past several weeks. And because we had a disproportionate amount of growth in the numbers coming from those markets this fourth quarter, we just wanted to flag that, therefore that has a disproportionate impact on our AOI and NOI for the quarter. We don't look at it as being material when you step back and consider the full year '25 and the magnitude of activity that we're going to have. It's more just a Q4 modeling point for people to be aware of, and we'll see how the FX plays out over time and we'll update you. But I don't think it's a material issue for '25 at this point. It's really just more a '24 consideration, which tends to be our lowest activity quarter. So, when you have your lowest activity quarter and you have where your growth is coming from get impacted by FX, this can just start to swing things around.

Thank you.

Hi. Great. Thanks for taking the questions. Two, if I could. Maybe first for Michael, you called out in Sponsorship the number of strategic partners increasing by 20% this year. I'm curious, looking out to '25, how you would encourage us to think about the Sponsorship business next year. Are there any verticals of the business where you see maybe outsized opportunities for execution where you could replicate this performance? And then second for Joe, on the Concert segment AOI in Q4, you called out some of the on-sales coming in over the next couple of weeks here. I'd be curious if you could help us think about how much marketing spend could be associated with those on-sales and maybe any color on just how to think about 4Q Concert segment AOI. Thank you.

Thank you, Stephen. On the Concert and Sponsorship side, again, we'll be giving more guidance this week as we get to our Investor Day. But Sponsorship has continually been our star for the last decade or so, with multiple years of double-digit growth. We look at this business still very strong, very different than maybe some of the advertising challenges other companies face. We see overall companies spending more money on-site and experiential, moving dollars into that segment. And anytime that happens, that's good for our business. We tend to rise with that. So, we look at '25 and onward as continual AOI growth that we've been able to deliver in the past in Sponsorship. One of the foundational drivers of that is our globalization. And every time we do more shows around the world, we provide ourselves with more opportunities and more sponsors. So, when you're doing all these Latin American shows, when you're doing shows now in India, the Middle East, Singapore, and expanding our Australian business, it just provides us with more and more inventory to open new borders and new relationships. So, as our global pipeline continues to grow, so will our Sponsorship and we'll see continued growth.

And Stephen, as it relates to Concert in Q4, obviously, Q4 in Concerts is a peculiar situation because, in some regards, right, the more we're ramping up for a great next year, the more that impacts our AOI. So, I think, as we're standing here, we'd expect a double-digit increase in our advertising expenditure that we have to write off at the end of the year. We're certainly ramping up activity and personnel to be prepared to handle the tremendous volume of shows that we're planning for next year. But I think even with all that, as we're looking at the numbers now, as again as the broad context, we do expect our margins for the full year in the Concert business to land around where they were in 2019. I'm not going to worry three or four months from now, plus or minus 10, 15 basis points, but I think that in total, we expect it to come in around where we were in 2019.

Great. Thank you both.

Thank you. On the CapEx increase, I was wondering if you could provide some color on what the pipeline right now looks like for new venue opportunities. And then for the new AMP project, anything further on what changed to pull that forward? I'm assuming that was already in the pipeline as of July, and it's more of just a timing consideration, but any color there? And then to follow up on the Sponsorship question, Michael, growing the number of partners that are generating over $1 million. Can you talk about, is that new sponsors or is it expanding current or existing relationships? And maybe what's allowing you to execute, if it's growing those relationships, what's allowing you to execute so well there? Thanks.

Quickly on Sponsorship, for a few years, we've been saying anytime you can take that regional relationship or that initial relationship with a large brand, form that relationship, and deliver for them, we tend to do well in getting the next opportunity with the CMO to discuss broader programs. So, we continue to grow our current base of sponsors. We tend to have a very good renewal rate and we tend to be able to upgrade them once we've gotten them into the ecosystem and understand their brand needs. So, most of it is coming from our current customer base of about 900 to 1,000 sponsors and growing our current base with them while also obviously expanding outside markets. On real estate, Joe will provide you with the updates. We continue to have a great pipeline. We'll provide more details for you this week in terms of what venues are going to be rolling out into '25 onward and the CapEx returns on that.

Yes. And on the specifics of the CapEx for the quarter, as you know, we often build venues in partnership with others. In this situation, we have a partner we've been discussing for an extended period about doing an amphitheater together. That partner had already invested a fair bit of capital into the project, and it was only recently that we signed the formal agreement. By signing the formal agreement, which gives us controlling interest in the amphitheater, we then need to move all the CapEx onto our books. So, you saw an increase of $50 million of expected CapEx for the year, but you also saw a $30 million increase in the capital coming from other parties. Most of the capital on this project is what a partner has already contributed. So, the net cash that we're putting out is somewhat less than that. In terms of new venues, as we noted in the release, we expect to bring 14 more venues online, either through substantial refurbishments or new builds over the next year and change through the end of '25, accounting for about 8 million incremental fans. As Michael noted, we'll get into more detail on sort of the mid-range planning on venues over the next couple of days.

Got it. That's all helpful. Thanks, guys.

Can you provide some color on what initiatives are resonating most with fans and driving up the per-caps? And where do you think per-caps can go over time? And then just related to that, I mean, how much opportunity remains to implement tiered experiences, and where are you monetizing on super or premium fans the most versus regular or casual fans? Thanks.

Well, I'll give a quick response again. We'll get into more detail this week because those are pretty strategic, broad questions. On the premium fan or super fan, I know I hear other companies talk about it. We've been selling to the super fan for a while; we call them premium fans that we launched a VIP experience at the show. That's kind of been an ongoing skill set we've had forever. Our job every year is to see that market share still underserved. We've used percentages in the past of 2%, 4%, 6% of the show as premium. We believe it can grow up to 20% and more. So, a lot of the refurbishments we're doing at venues focus on transforming regular seats into enhanced experiences for premium audiences at night. Therefore, we believe premium experiences are a significant underpinning to our growth moving forward since they rely on our existing customer base; we always sell out the boxes and the premium inventory first, so we never have difficulty selling that. Thus, we see premium experiences as a fundamental aspect of our CapEx and refurbishments as well as in our new buildings. When building new venues, we mandate that they must have a higher percentage of premium seats and lounges and experiences. Consequently, those venues begin with much better returns.

What initiatives do you think are resonating most with the fans and increasing the per-caps? And where do you think per-caps can go over time?

Most of the successful strategies we've implemented, as I've said before, revolve around enhancing the experiences at our venues. The new venues, particularly the $1 billion arenas, have demonstrated exceptional service, while all our traditional arenas have seen a significant upgrade in food and beverage options. We've transitioned from the traditional food and beverage offerings to a more diverse selection, including higher-end food choices, mocktails, non-alcoholic options, and higher-value offerings in our food and beverage bundles. This ongoing strategy aims to improve our amphitheaters, theaters, and arenas. We've been consistently tracking a $2 per head growth in recent years, which we believe is something we can continue in the future. Hence, our focus is to consistently upgrade the quality and availability of food and beverage offerings, provide more Point of Sale (POS) opportunities, and enhance our premium offering. We believe there still remains ample potential for growth.

Thank you.

Hi, evening. Thanks for taking my questions. Number one, past week or so has brought quite a bit of change. I'm wondering if your thoughts have started to shift or philosophies started to shift around M&A given sort of the changes over the past week? And then I have one quick follow-up please.

No, we haven't, nothing's really changed in the last couple of years, the way we've been moving around the world and building our business. We don't have any sizable M&A targets that we would pursue with or without regulatory changes in the United States. We're satisfied with our current path. You see us acquiring an arena in Austin, or an amphitheater in some unserved areas or a 5,000 seat venue, and similar opportunities worldwide. We are continuously looking in these 100 cities that want quality entertainment, whether it's an amphitheater or a festival or a promoter; we enjoy integrating those into our portfolio and we have a solid pipeline of prospective acquisitions globally. Nothing has changed over the last two years, and I don't foresee any changes going forward.

Okay. Understood. And I just wanted to ask a more general question about the secondary ticketing market, which I recognize is a smaller part and, in some sense, a strategic portion of what you do. But it seems as though every time we have something like a World Series and ticket prices get high, it draws a tremendous amount of attention that sometimes seems a bit misplaced toward you as the biggest player. Are there any strategies or, and maybe this is not the best forum to talk about them, but it's just something that comes to mind that we've written about a bit and I thought I would raise it and see if there's any answer that's appropriate here.

Yes. I think it's, go ahead.

A much broader statement, but yes, we are always a little amused that sports is kind of a badge of honor how expensive those tickets go for, but music, which is priced much lower than sports, seems to get more of the emotional reaction. In the US market, secondary ticketing is largely unregulated. We hope there's a better regulation regarding secondary ticketing over time, particularly concerning issues like the use of bots and speculative selling, among other practices in that market. So, we hope that more and more attention is given to secondary markets. Our hope is that over time improvements to regulations will be put in place to assist consumers.

Got it.

Thanks. Hi, team. A question about Ticketmaster. With all the activism at the DOJ, a question that we've heard a lot in the last year has related to the defensibility of Ticketmaster's competitive position, and one of the pillars of that is technology. I wondered if you could just comment on the investments that Ticketmaster is making in technology, whether it relates to bots or demand-generation or other initiatives that you think are the most important ways Ticketmaster is reinforcing and extending its competitive position technologically?

Sure. Yes. And Peter, as you know, we spend tens of millions of dollars in capital on Ticketmaster. I think first and foremost, we need to continue to innovate the products that we offer to, on the enterprise side to our venues and promoters and others who utilize the platform. Recent years have included significant investments in pricing technology to help everyone understand the market value of the content they're delivering. It certainly also involves the marketing side, developing strong marketing science capabilities to help people market their shows effectively. We have made substantial investments over the past couple of years to continue enhancing our ability to handle the high-demand on-sale periods. We think Ticketmaster currently excels in that domain, and we've observed several recent on-sales where Ticketmaster has been able to deliver a much better experience and sell tickets at volumes that others have struggled to manage. Additionally, we are focusing on consumer-facing technologies, aiming to improve everything from digital ticketing to efforts to mitigate bot usage. It's a broad range of technologies we're investing in, and we want to continue being a leader in innovation.

And at this time, there are no further questions. Now, I'd like to pass the call back over to the Live Nation management team for closing remarks.

Thank you, everybody, and look forward to talking more about our business this week.

And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.