Good day, everyone. And my name is Talari, and I will be your conference facilitator for today.
At this time, I would like
to welcome everyone to Live Nation Entertainment's 4th Quarter and Full Year 2019 Conference Call. Today's conference is being recorded. Before we begin, Live Nation has asked me 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, including in the company's most recent filings on Forms 10 ks, 10 Q and 8 ks for description of risks and uncertainties that could impact the actual results. Live Nation will refer to some non GAAP measures on this call.
In accordance with the SEC Regulation G, Live Nation has provided a full reconciliation the most comparable GAAP measures in their earnings release. The release reconciliation and other financial or statistical information to be discussed on this call can be found under the Financial Information section on Live Nation's website at investors. Livenationentertainment.com. It is now my pleasure to turn the conference over to Michael Rapinoe, President and Chief Executive Officer of Life Nation Entertainment. Please go ahead, sir.
Good afternoon, and welcome to our Q4 and full year 2019 conference call. In 2019, Live Nation delivered its 9th consecutive year of growth with revenue up 7% and AOI up 14%. Starting with the core of our business, our concert fan count was up 5,000,000 to 98,000,000 globally, driving AOI growth in all of our divisions, concert sponsorship and ticketing, demonstrating the effectiveness of our Flywheel business model. In our Concert segment, fans continue to find a 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. In the U.
S, over the past 5 years, consumer spend on live entertainment has grown 7% annually, providing strong structural tailwinds to drive increased demand for concerts globally. With these demand dynamics, in 2019, we delivered growth AOI of 7%. This growth was broad based across our portfolio with international fan count up 11%, while in North America arenas, festivals, theaters and clubs contributed to our growth. Globally, festivals, theaters and club attendance were up double digits, highlighting the strength of our global footprint and the value of a diversified portfolio of markets, genres and building types that have enabled our consistent growth over the past several years. And across all of the artists we work with, we invested well over 6,000,000,000 to promote 40,000 shows in 42 countries, with Live Nation by far the largest financial supporter of artists and music.
Average ticket prices for our amphitheater and arena shows are up double digits since 2017, while sales of dynamically priced platinum tickets are up 66% for the year across 3,000 shows, as artists want more of the best seats in the house sold at face value at the on sale. Even with these increases, concerts remain a great deal for fans relative to other live experiences. Our average ticket price for a concert at any one of our amphitheaters was $46 in 20.19 relative to a $75 NBA game over $100 for an NFL game. Once at the show, average per fan spending grew as well. At our amphitheaters, spending grew by $2.50 to over $29 per head as we improved our product offering, reduced friction with shorter lines and improved VIP hospitality offerings.
The hospitality focus also grew on-site spending at our festivals, theaters and clubs, the result of a better experience for our fans across our operated venues. We added 38 new venues in 2019, including 6 new festivals and 18 new theaters and clubs. As we have gotten better at on-site hospitality over the past several years, this opens up more opportunity for us to operate more buildings where we make more money per fan, which accelerates the on-site monetization part of our flywheel. The strength of our business is continuing with concert tickets sold through mid February for 20 20 shows, up 10% to $38,000,000 and a pipeline of 4,700 confirmed Arena Stadium and Amphitheater shows, up 30% from the same time last year. All venue types have strong show count growth led by North America stadium and arena concerts.
In our high margin sponsorship business, we grew revenue by 17% and AOI by 16% in 2019. Venue sponsorship was key driver in the year, up double digits globally with broad growth across amphitheaters, festivals, theaters and clubs. Festivals had a particularly strong year with the addition of Rock in Rio to our portfolio of marquee festivals. Sponsorship in this segment was up over 50%. Our top strategic sponsors have also been a key driver of our sponsorship segment, with 88 sponsors collectively spending approximately $400,000,000 to reach our fans and revenue from this group up 19% in the year.
In 2019, we broadened our brand partnership base by leveraging our power of live research with particular success in the lifestyle space, working with brands including Revlon, Bonds and Clinique as we demonstrated the importance of their products to concertgoers. All this reinforces the power of our platform of 98,000,000 fans and the priority of brands to reach fans during the live experience. With over 70% of budgeted sponsorship, net revenue for the year committed And despite 2020 being an off year for Rockin Rio in Brazil, we are confident we will deliver continued growth in our sponsorship segment this year. Ticketmaster further built its leadership position in ticketing in 2019, growing AOI by 11%. Most of our growth came through reduced customer acquisition costs across both primary and secondary ticketing and from secondary ticketing volume, notably the NFL and other sporting events.
Our international ticketing business drove our growth in fee bearing tickets and GTV, led by our strong international concert ticket sales. We now provide services in 31 countries and in 2019 delivered 115,000,000 tickets internationally with tremendous opportunity for continued growth on a global basis, particularly in the 15 markets where we promote concerts and don't yet have a substantial ticketing operation. Ticketmaster's recent entry into both the Taiwan and Singapore markets highlights its international expansion opportunity, leveraging our leading concert positions in these markets and now growing our ticketing presence to 7 countries in Asia as we continue to build our flywheel across more of these markets. In North America, our top priority in 2019 was deploying Presence, our secure ticketing digital product, which we see as key in differentiating Ticketmaster and providing venues, teams and artists with the information and tools to maximize their fan relationships. Presence was deployed in over 700 venues by the end of 2019, including over 90% of major sports and Live Nation buildings, operating 50,000 events for over 120,000,000 fans, more than half of whom use digital ticketings for entry.
We see our deployment in 2020 further accelerating and we are planning to have presence in over 1300 venues by the end of the year, with over 200,000,000 fans attending events at these buildings. At that point, we will cover 100% of major sports at Live Nation buildings and 90% of all fans in North American Ticketmaster venues, making Ticketmaster by far the global leader in digital ticketing. Artist driven initiatives such as ticketing Pearl Jam's entire tour with SafeTicks enabled their strategy of getting tickets into the hands of their greatest fans is one demonstration of how digital ticketing is serving content more effectively. At the same time, we continue to scale our global ticketing marketplace with the Q4 being our 2nd highest fee bearing GTV quarter ever, selling over 60,000,000 fee bearing tickets and delivering over $5,000,000,000 in fee bearing GTV. Ticketmaster continues to lead the ticketing industry, both operationally and in digital ticketing.
Looking at 2020, I'm confident in Ticketmaster's ability to extend that leadership position globally as we add more customers, ticket more events and expand our digital ticketing platform. In summary, 2019 was another strong year for Live Nation, building our global concert business and driving growth in our high margin venue, sponsorship and ticketing business. Types and markets sets up our flywheel to deliver another year of strong global growth. With this, I will turn the call over to Joe to take you through additional details.
Thanks, Michael. Looking at our business segments, 1st concerts, as Michael indicated, fan attendance grew 5% to 98,000,000 fans, demonstrating the strength of our global portfolio and with this demand growth highlighting the strong fundamentals underlying our business. Geographically, international had a strong year with growth in stadiums, festivals and theaters and clubs driving 11% band growth. Theaters and clubs globally led band growth for the year with 20% growth to nearly 30,000,000 fans. Festivals also had a strong year with 7 new festivals including Rock in Rio helping deliver 13% fan growth globally.
Our fan attendance is up from 47,000,000 in 2010, closing out the decade by more than doubling our fan base, the key milestone that demonstrates the consistent and resilient growth at the core of our flywheel, creating significant scale over time. Looking specifically at the Q4, while attendance and show count were up, our AOI was lower, heavily driven by an increase in advertising expense related to 2020 shows and increased fixed expense associated with continuing to build our flywheel and operate more venues. Without this higher than projected advertising expense from putting more 2020 shows on sale in 2019, Concerts AOI for the year would have been up double digits. Moving on to sponsorship, in 2019, we again delivered double digit AOI growth, up 16% for the year. International drilled over 70% of this growth with the addition of Rock in Rio helping drive both international and festival sponsorship growth.
For the Q4, revenue was up 25% and AOI was up 26% with growth helped by the 2nd weekend of Rock in Rio Brazil. Our pipeline for 2020 is in good shape demonstrating the strength of concerts flywheel and driving all parts of the business and we expect to continue growing our sponsorship AOI despite not having Rockin' Rio Brazil this year. Finally, Ticketmaster. Global GTV was flat in the quarter, matching 20 eighteen's record 4th quarter, while fee bearing GTV was down 2%. North America fee bearing GTV was flat for the quarter, while international was down 8%, reflecting the geographic shift in 2020 stadiums versus last year.
This volume was up relative to our expectations for the quarter, reflecting both the timing shift and an even stronger 2020 pipeline of concerts than was previously projected. For the Q4, Ticketmaster AOI was up 23% due to a 9% increase in secondary GTV, reduced customer acquisition costs and the benefit from comping against last year's costs related to a 3rd party data breach. These same factors then drove our margin improvement for the quarter. Looking at 2020, we expect a strong concert slate will drive TechEmasters GTV, including a strong Q1 when we'll have most of our stadium and arena on sales. A few more points.
The coronavirus has had a lot of press lately, so I wanted to give some context for us. First, as it relates to China and Asia shows generally, show cancellations have been minimal given our activity levels in China, with 17 shows totaling approximately 75,000 fans. Looking over the next 3 months, our Asia activity is limited with 70 shows and 200,000 fans in the region. 2nd, as it relates to Italy, we have 30 shows booked over the next 3 months with approximately 125,000 fans. Collectively, this accounts for less than 1.5% of 1% of our 100,000,000 plus fans we expect to attend our shows this year.
More broadly, while we expect that there will be further areas of breakout over the next few months, one of our strengths is that we are highly diversified geographically. Thus far, we have seen no pullback in fan demand or ticket buying outside of the specifically affected areas. And overall, our attendance is weighted toward the latter part of this year, with over 70% of our attendance expected from June through the end of the year. Finally, on the Ocessa acquisition, we continue to make progress working with the regulators in Mexico on their review. And at this point, we expect the acquisition to close sometime in the Q2.
With that, I will turn the call over to Kathy to go through more on our financial results.
Thanks, Joe, and good afternoon, everyone. Our key highlights for the Q4 of 2019 are revenue increased by 11% to 2,900,000,000 dollars AOI was $81,000,000 up 18%. As of December 31, our deferred revenue related to future shows was up 10% to $1,200,000,000 compared to $1,100,000,000 last year. Concerts was the primary driver of revenue growth as it increased 12% for more fans and shows. Sponsorship revenue was up 25% as we benefited from the 2nd weekend of Rock in Rio, Brazil.
And ticketing revenue grew 2% as a result of higher secondary ticket volume. AOI was up 18%, driven by growth in sponsorship due to the 4 days of Rock in Rio and improved resale volume and lower operating costs and ticketing. Concerts AOI declined from higher advertising expense for 2020 shows and increased headcount and rent, primarily related to additional venues. As we've noted before, we recognize all show related advertising for future shows at the end of the year, so the higher volume of on sales for 2020 shows increases our year end expenses. Operating loss for the quarter was $83,000,000 compared to a loss of $90,000,000 in the prior year as a result of the higher AOI.
Net loss for the quarter was $160,000,000 compared to a net loss of $148,000,000 in the prior year, driven mainly by higher interest, taxes and non controlling interest expense. For full year 2019, revenue was $11,500,000,000 a 7% increase over 2018. AOI was $943,000,000 up 14%. And free cash flow adjusted was $499,000,000 up 4% over last year, representing 53% of AOI due to timing of distributions to NCI Partners. Revenue growth was primarily driven by concerts, which was up 8% as we saw attendance growth across North America arenas, international stadiums and festivals and theaters and clubs globally.
Sponsorship revenue was also strong with 17% growth driven by Rock in Rio, high demand for our venue on-site sponsorship programs and growth in the number of our strategic sponsors and related spend. All of our segments contributed to our AOI growth. Concerts AOI was up 7% as we grew our fan base and number of shows across arenas, theaters and clubs and festivals, along with improved fan on-site spend at our amphitheaters, festivals and theaters and clubs. Sponsorship AOI grew by 16% and ticketing, our largest AOI contributor, grew 11% from higher revenue and lower operating costs. Operating income was $325,000,000 up 19% over last year, driven by the increase in AOI.
Our net income for the full year was $70,000,000 compared to $60,000,000 in 2018 due to our improved operating results. Net loss per share was $0.02 after $75,000,000 in accretion of redeemable non controlling interest. For 2019, we saw a 2% FX impact on both revenue and AOI. Turning to our balance sheet. As of December 31, we had total cash of $2,500,000,000 including $838,000,000 in ticketing client cash and $936,000,000 in net concert event related cash, leaving free cash of 697,000,000 dollars Net cash provided by operating activities was $470,000,000 compared to $942,000,000 last year due to the timing of payables and ticket sales versus the prior year.
Free cash flow adjusted was $499,000,000 compared to $481,000,000 last year. Our total capital expenditures were $316,000,000 52% of which was spent on revenue generating items. Our total net debt as of December 2019 after our refinancing in October was $3,300,000,000 with a weighted average cost of 4.2%. Our current expectations for 2020 include: in concerts, we expect most of the AOI growth to come in Q3, with some in Q2 and our seasonally quieter Q1 having a bit less activity than last year. In sponsorship, while we expect growth for the year, the Rockin' Rio Brazil Biennial Festival will not occur in 2020.
In ticketing, we currently expect this strong concert slate to drive growth in GTV with higher on sale activity, particularly in Q1. It is too early in the year for us to predict FX impact for 2020. We will provide guidance in future calls as the year develops. All of our guidance is currently at constant currency to 2019. We expect our total capital expenditures to be approximately $375,000,000 with the increase largely driven by revenue generating expenditures.
And we currently expect accretion of non controlling interest to be approximately $55,000,000 for 2020, with about half that in the first quarter and the rest fairly evenly distributed across the remaining quarters. Thank you for joining us today. Operator, we will now open the call for questions.
Thank We'll take our first question from Brandon Ross with Lighthead Partners.
Hi, guys. Thanks for taking the question. May as well address the elephant in the room right off the bat with Corona. And you gave us some really good color on Italy and Asia. Thanks for that.
But I think investors want to understand the potential downside risk if there are broader show cancellations, especially over the summer period. To the extent that an individual show is canceled, can you help us understand what the financial impact would be? I know you guys buy many tours outright. I think you pay artists, what, dollars 8,000,000,000 per year. Are you left holding the bag if shows are canceled?
And then if there are regions that are affected by corona, would you have the flexibility to reroute tours? And finally, you gave really strong leading indicators for 'twenty, obviously shaping up to be a big year without corona. If there is major corona impact, would you anticipate that activity pushing out to 'twenty one? I think that covers most of it.
Sure, Brandon. This is Joe. I'll get started and Michael can jump in. I think the first thing just to put in the right context is, to your latter point, anything that is being talked about is generally being talked about just in terms of timing is not being talked about not doing the shows as we've long discussed. Artists see the touring as the fundamental part of what they do and how they earn their living.
So we're not talking to any artists, they're saying they don't want to touring. It's all exactly where can I go when? So it's just talking about timing. Absolutely, as we look at very specific hotspots, there is certainly flexibility to reroute as need be or to have them come back and hit that area later as opposed to when it was previously planned. In general, we pay the artist when the show occurs.
There's generally force majeure clauses. If for some reason a show were to be canceled, we wouldn't have to pay the artist. But again, we think that that's going to be pretty limited where we don't have some ability to either reroute or reschedule.
And Brandon, a little color on the cancel and the cost. So there would be no cost. We don't pay an artist until they play. If an artist says, if we cancel a show next month in Milan, we don't pay the artist. There's no cost incurred and when the artist replays that show, then we pay the artist.
So these ones are actually the easier ones to manage. I mean, the ones that you always have the more challenge is when the festival gets canceled on the Saturday afternoon when 60,000 people are sitting there. That's when you have some marketing and some sunk costs where it may affect you. When you have a month, 2 months, anytime you're canceling in advance, there's actually no cost incurred yet. The artist isn't at the show.
The people aren't in the venue. You haven't paid the cost. So this is the easiest economic challenge for us is to reroute and reschedule a show, no cost to us. As Joe said, the good news is on a supply demand, the show is not going away, it's just moving to a different quarter. The artists will tour whether they have to jump off this quarter and go in the fall or 'twenty one.
We won't net lose the business. And the other demand part that we're just really impressed with because we always talk about the resilience of the concert band is as of last night, we had a sellout in Australia on a festival that went up. The business is real strong. The consumer still seems to be buying the tickets on a global basis. So supply demand will be there.
We're going to take this cautiously as we watch the markets and we assume a hotspot will flare up and a show will be canceled here and there. But we're confident long term that the show will happen, the revenue will flow and the fan will show up. On a macro on a micro 2020, as I think Joe mentioned, most of our business doesn't start till the middle of June onward. So the next few months we'll have some cancellations I assume here and there and some arenas and clubs. But the heart of our business happens in the summer and we're optimistic.
We hope that it can be handled in the summer months bring us some relief and we'll business as usual. But right now, we're being cautious. We're looking at all markets doing the right thing for the artist. We're playing along with the great demand of this industry.
Great. Thank you for the color.
Next, we'll move to Ben Swinburne with Morgan Stanley.
Hey, good afternoon. I wanted to ask if you could help us think about the leading indicators you gave in your press release and on your opening comments. Particularly tickets sold up 10% for 2020, 30% growth in confirmed shows. I don't think you gave specific guidance financially for 2020, which I understand. But just wondering if you could help put those two numbers into context because they seem quite robust even relative to the growth you just delivered in 2019.
And then secondly, and I apologize for asking more virus macro related stuff, but I'm sure you understand why. On the sponsorship side, can you just help us remind us how much of that business is sort of either annual, multi year relationships versus anything show specific? Just so we can think about if 1 or 2 sizable shows are postponed, if we should see that impact sponsorship as well? Thank you.
On the sponsorship and then I'll no, sponsorship would most of our we always talk in our reports about our annual global strategic partners. So most of our contracts are over the 1 to 3 years, they're longer term. They're not very the ones that matter over multiple events, mostly marketable markets, multiple markets. So we don't have the beautiful part of our business, which is dispersed over 30,000 shows, is we don't have one weekend, one show, one event that's the $20,000,000 big event. It's really dispersed across the globe, across different venues and genres, which is the part that makes us a bit risk adverse.
So we see no sponsorship risk at all. If a show canceled, the sponsor would get the show later, we'll make up for the show. Again, going back to our first point, as long as we're going to deliver net over the next 2 years, the same amount of shows, the growth, the tickets that we've kind of delivered for that sponsorship commitment, then we'll wish you no pullback at all in the long term sponsor. Thanks Mike. We'll talk about the yes, we're headed for a record 2020 business is strong and Joe will give you what he can on how you can model that.
Sure, Ben. As you said, we haven't tried to give you full year guidance for a couple of reasons.
We don't generally try to do that in February, it's a bit early. And secondly, with the uncertainty on the specific timing on the asset to close, it makes it just harder to give you what the overall year looks like. But we absolutely are taking a lot of confidence based on being so far up in terms of the 30% on the show count. The 10% up on the fans, I think both of those are exactly leading indicators. They're not projections of where we're going to end up, but I think they're strong indicators that we'll have pretty good growth this year.
Thank you.
Next, we'll move on to Kohen Naugh with Jefferies.
Hi, good afternoon all. Thanks for taking the question. On OCCESSA, is there anything that you can provide any specifics as to why it's still being held up with the Mexican government? And then just second question is on a more broader level. There was a big transaction that closed in mid February with one of your competitors and the multiple seems pretty high.
And so if we think about the embedded value in the enterprise, if we apply that multiple just for your ticketing segment, it seems like you can get the concerts and sponsorship pretty at a pretty attractive multiple. Can you just talk broadly of how you think about the value embedded in the broader enterprise? Thank you.
So let me take the first one on OCCESSA. I think when we started this several months ago, one of the things that we thought was that because Ocessa had just gone through some reviews by the same government entity that they were very familiar with the business and would be a fairly quick process. As it ended up, this transaction got put with a different team in a different department. So we had to start as little bit more at the basics in terms of the industry. So we weren't able to shortcut it as much as we thought.
There's nothing that at this point based on most recent discussions that give us great concern, just taking a bit longer. In terms of the transaction, look, our view is simply that we focus on building a great business, a Ticketmaster and throughout all of our different pieces. It's up to you guys and the market to specifically value them. We're building this for long term value for our shareholders up and down the flywheel, and we expect that we'll be successful in doing that.
Thanks very much.
We'll move next to Doug Arthur with Huber Research.
Just going back to COVID-nineteen for a second. Joe, I'm wondering if you could I mean, my concern would be on the festival business in Europe, if there was any
kind of wider
spread beyond Italy, obviously. As you said, most of that is in the summer, so it's a ways off. But and I think 5 years ago, growth in other markets. But I'm wondering if you could just sort of size sort of frame the size of that business for you, if there was some kind of slowdown or less attendance or even a cancellations outright of some of these large festivals over on the continent?
Yes. I think that our total festival business would be in the low double digit portion of our total fan base. And I think our largest single festival would probably be roughly 0.5 percent of our fan base. So we're across 100 and change festivals. It's very diversified geographically, diversified time wise over multiple continents.
So if there were to be a situation still as we get into July August and you assume it's located geographically, I would not expect that to be a broad impact in terms of our fan count.
Okay. And then just one little detailed question on the quarter. I kind of asked this question before, but it looks like your event count in North America in the 4th quarter was very high year over year and relative to recent quarters. Is that just this continuation of massive growth in small clubs and theaters?
Yes, with theaters and clubs, that's I think we called out specifically the volume and the growth in my portion on the number of theaters and clubs and the attendance there. So that is what drove most of it in Q4.
And there's no acquisitions in there, right, in North America?
Not of substance. Maybe a club we leased in Philadelphia. Yes. Not an acquisition of San Diego.
Okay. All right. Thank you.
Next, we'll move on to Steven Nicagolo with Cowen.
Hey, good afternoon. Per the company's Investor Day presentation in November, you guys highlighted a $60,000,000 ticketing AOI opportunity from entering in new promoter presence. These markets primarily consisted of Latin American, Asian countries. Just wanted to ask in light of Ticketmaster's recent expansion into Asia, in Taiwan and Singapore, can you just discuss high level the economics of both the Latin America ticketing and Asia ticketing, and how those markets may differ structurally from both the United States and Europe and any incremental challenges in those markets that you
may be facing? Thanks. I
was well prepared. We're in Asia is less than 0.01% and nothing of our business right now. So it's not a strong business for us currently. I think I would have said in Liberty that on a global basis, we have a lot of opportunity left international and we look at we look all across the world from Latin America to South Africa to Asia. We think all those markets in India and etcetera are going to be long term great markets for us that are where we have low market share and are starting to put some shows.
So we're happy we got a flag in the ground in Singapore and Taiwan, small little businesses. We hope to get more flags in the ground over time and we think in 3 to 5 years from now, we hope the Asian business is a big contributor to our overall business as well as Latin America. But those are emerging markets, still very new, lots of upside, but not today don't actually contribute much to the bottom line.
That does conclude our question and answer session at this time. I'll turn the call back to our speakers for any final or additional comments.
Thank you.
Thank you, everyone. That does conclude today's conference call. We do thank you all for your participation.