Live Nation’s pandemic recovery continued in 2022 as it returned to profitability for the first time since 2019. Amid fears of government intervention in the business after the company’s well-publicized ticketing issues, most notably with Taylor Swift’s concert tour, and a growing push for ticketing reform, Live Nation’s stock trended slightly upwards in after-hours trading Thursday following the entertainment giant’s 2022 earnings release. The end-of-year report reflected what was essentially its first full year of normal operations since the onset of the pandemic.
Fueled by a revival of its concert business and international growth, Live Nation, which also owns Ticketmaster and Jay-Z’s Roc Nation, reported $16.7 billion in revenue for the full fiscal year, a 44% increase from 2019 ($11.6 billion). All three of the concert operator’s business units—concerts, ticketing and sponsorships—were decimated in 2020 and struggled to recover in 2021, but 2022’s numbers represent a return to financial normal.
The stock (NYSE: LYV) closed Thursday at $76.49 after gaining 1.36% on the day.
More than 121 million fans attended events in 2022, a 24% increase from 2019’s concert attendance of 98 million. Average revenue per fan was up 20% over the same span, but 2022 wasn’t all smooth sailing for Live Nation, which now finds itself facing legal questions and regulatory pressures that could eventually impact Ticketmaster’s dozens of sport partners.
The company’s final quarter included a pair of high-profile ticketing scandals. Tickets for Taylor Swift’s 2023 Eras Tour went on sale in November on Ticketmaster and were met with what the company described as “historically unprecedented” demand as a record 2.4 million tickets were sold the first day they were available for presale. The interest crashed the provider’s website and forced Ticketmaster to cancel the general on-sale date for the pop icon’s tour due to insufficient remaining inventory.
Less than a month later, hundreds of Bad Bunny fans with tickets purchased through Ticketmaster were then denied entry to his sold-out concert in Mexico City. Ticketmaster Mexico attributed the confusion to an “unprecedented” number of false tickets that overwhelmed its systems and resulted in many legitimate ticketholders being denied entry to the stadium. The company now faces millions in fines from the Mexican government.
Swift’s fans, for their part, are now suing Ticketmaster and Live Nation for charges including deception, fraud, price fixing and violations of antitrust law. The Department of Justice is also investigating the conglomerate amid the antitrust scrutiny. A bipartisan group of lawmakers now are taking a closer look at what some see as Live Nation, specifically Ticketmaster’s, ticketing and live events monopoly. As of the end of 2022, Live Nation owns, operates or leases 172 entertainment venues throughout North America and another 99 internationally.
In February, Live Nation hired veteran antitrust lawyer Dan Wall. But in its earnings report, the company said it “remains in constant conversation with the Department of Justice’s monitors, and do not believe there have been any violations.”
There’s also a wave of consumer and regulatory support for all-inclusive ticketing, which would give the consumer a single upfront cost for the ticket as well as any applicable service fees and taxes, as well as increasing scrutiny on primary ticketing and ticketing practices more broadly. In his state of the union address earlier this year, President Biden called for Congress to limit ticket fees for live entertainment, including concerts and sporting events, and mandate greater transparency, which could alter Ticketmaster’s business model.
Live Nation indicated its own support for all-in pricing and ticketing reform but didn’t seem optimistic about lowering ticket prices, which it said is largely out of its control. Artists and teams set prices and many opt for dynamic pricing to respond to consumer demand. The service fees, Live Nation executives explained, are set and a majority also kept by venues, not by the ticket seller, which is Ticketmaster, in this case—that goes for sports teams with ownership or operating rights to their venues, too.
“[Service fees are] a version of the amount of money that goes to the venue for the services they provide, Ticketmaster for the services they provide,” Joe Berchtold, Live Nation Entertainment’s President and CFO, said in Thursday’s earnings call. “The venue sets the fees and the venues’ costs have been going up [so] service fees have been going up. I think it would be a very unique situation where you would tell the building what their fees could be, I think it’s more likely you go to all-in pricing, where they see the total cost upfront, transparently.”
Limiting fees to lower prices, therefore, could force venues or operators to find other ways to offset the diminished revenue.
Ticketmaster serves as the official ticketing partner of several major sports leagues including the NFL, NBA, NHL, the PGA Tour, PLL, College Football Playoff as well as dozens of teams and universities across the country. Any legislation or legal ruling that changes the subsidiary’s ticketing approach or regulates fees could have ramifications for those partners.