Okay, great. We'll get started. We are happy to have back from Live Nation, Joe Berchtold, President and CFO. Joe, thanks for being back.
Oh, thanks.
Before we get into the kind of now and macro, it'd be great for you to refresh us on kind of how you see the dynamics driving the supply and demand side of concerts and how that kind of underlies your confidence in the future.
Yeah, I think for us, we always start with global, global, global. Global supply, global demand. The incredible thing about our business, it's always great to start your business model with strong structural tailwinds. If you look at what's happened over the past 20 years, the business has gone truly global in its demand profile. The digitization of distribution, taking it out of control of the historical label distribution and putting it in the Spotifys and Apple Musics. Music is going everywhere globally. You pair that with the social media platforms and you have fans everywhere learning about artists, consuming their music and becoming real fans. Now it's really a matter of how do you bring those global artists everywhere in the world? It obviously starts with a lot of the U.S., a lot of the international artists.
Now you're seeing artists that would have historically been regional are now themselves going global. The past couple of days, Bad Bunny has put 30 stadiums on sale, Asia and Europe. There's a Latin artist who's very successfully toured in the U.S. over the last few years, but now put 30 stadiums on sale, sold over 1 million tickets, 98% sell-through in the first two days. Again, we're blessed. We have that global demand. Our job now is to figure out, okay, how do we just help make a market in that? How do we help bring that supply globally, working with our regional partners to identify what artists can go where? That's a multi-year runway just to continue doing that.
Okay, so maybe following up on that, right, at your Investor Day, I think you put out a target of 200 million fans. That would be 50 million of growth on 2024. I think you said that's only about 10% of the potentially available future market. When you look at that longer-term opportunity, how much of that is realized by kind of the natural forces of supply and demand you just spoke to versus kind of the innovations that are needed at the level of the promoter, the venue, the artist?
Yeah, I think that it really is the demand is there. The question is, how do you satisfy that demand? In some cases, it's simply bringing Bad Bunny to more markets. It also ties back to our venue strategy, which is in many cases, the infrastructure doesn't exist. It's not so much innovation as it is we need better arena, stadium infrastructure in place so that when we bring the artists there, they can have the right experience, fans can have the right experience, we can deliver premium differentiated experience. The buildings are modern enough that they can gross for the artists to drive their incentive to want to tour there. When we look outside of the U.S., we see the demand. We can tour them in many cases.
We think we can accelerate that and broaden it by continuing to push a venue strategy that gives more modern, high-quality arenas for those artists to be touring in.
Got it. Maybe just staying on international, LATAM has been a notable success story going back to the start with the Rock City acquisition and then scaling up through additional promoters. How do you think about applying this playbook in more regions, maybe such as APAC, where you recently acquired HIP in Japan?
Yeah, I think this has been our long-term playback. I think since 2019, about two-thirds of the growth we've had in our fan base have come from the international markets. I think you can go back even further and look at what we did in Germany 10 years ago. We've used that case study before, went in, got a foothold, partnered with Marek Lieberberg, built up his business, bringing our international artists there, building a sponsorship business, a ticketing business, and then starting in Brazil, but then moving quickly to OCESA in Latin America. We've taken our Latin America business from 2 million fans to 16 million fans over the past five years, working with them. Now we're looking more at Asia and Japan. I think we're currently estimating about a 200 million fan TAM in Asia, and we're about 5% of that.
We have just scratched the surface. HIP will be, I think, more like Germany than OCESA in the sense that OCESA was a full stack mini Live Nation. What HIP gives us, it gives us that foothold in access to the market, access to the venues that you need a local partner with in Japan. Before, we were co-promoting shows. We were sharing the economics. We did not have a huge incentive to really drive a lot of volume to Japan. We would do it where it made sense from a touring standpoint. Now, because we have this HIP acquisition, now we have the full incentive. We will start by driving volume of shows into Japan. We will work with our partners there, find and develop local J-pop artists.
We'll look for venue opportunities, build out venues across different markets in Japan, build sponsorship, look for entry to ticketing, and that'll drive the overall business in Japan over the next several years.
With those examples you gave, right, with Germany and Latin America, usually the ticketing operations come a few years right after you've built up a certain amount of scale.
Right, right. Yeah, so Germany, we had a presence, but what you do is you use the fact that you have the concerts you're promoting to drive the ticketing business. You particularly use the presales, right? Because that Bad Bunny presale, wherever it is, whatever platform it's on, particularly the presale, they're going to find it. We use that successfully in Germany to really build up the Ticketmaster business there. I think the strategy would be similar in Japan that we use our concerts position to drive the ticketing business.
Maybe moving to more recent trends. You recently disclosed, I think, 95 million tickets sold for Live Nation concerts year- to- date, up double digits. Usually, we have an extra week between earnings and this conference, but is there any update here? You know, Joe, anything you'd highlight that would give you added comfort over the macro?
Yeah, we'll get into a number of pieces here, but we're at 100 million tickets now. As you said, only have a week, but it's been a pretty good week. That now puts us at a position, just for context, in 2019, we sold 98 million tickets in the full year. We are sitting here now mid-May, and we've already surpassed that. When you look at, again, the macro, there's no doubt that that global demand is there. Again, the majority of growth has come from international. Over the past several years, the majority of growth will come from international this year. Keep reminding ourselves it's a big world out there. We are continuing to see strength throughout. We're seeing strength in our on-sales. I just gave the Bad Bunny example. We're seeing strength in our festivals.
We'll get into the on-sale, but all the data points there have been continued to look good. We are doing a number of things to be aware of the macro. You're not going to see a big price push this year because everybody's aware this is just logically not the year you're going to go out on the edge on that, but consistent, very strong demand.
Got it. Maybe touching on that. We'll ask most of the companies over the course of the conference, you know, how they might execute in a potential economic downturn. You know, how do you think about the tools available? You just touched on one, but on the concerts and ticketing side to kind of maintain that high utilization. Then on the cost side, right, how does the recent experience of the pandemic and flexing down the entire expense structure inform your view of margins?
Yeah, I think first of all, our first lever is pricing. As I said, we've been very conscious this year. If you look at the stadiums, you look at the arenas, you're not seeing in aggregate big pricing increases. What everybody is very focused on, we've used these examples before, how do you make sure the back of the house, the pricing in the back of the house, your get-in price stays very accessible to all your fans? Our get-in price on average is in the mid to high $30s. It has grown slower than inflation since 2019 because that's where we want to make sure that's where you're going to see the risk, right? On the other hand, they're saying, but I'll take some more money in the front of the house because I know it's there. I look at the secondary market.
I know I can get a bit more money there. On total, I'll still get as much money, but I'm going to be more specific in terms of how I price the house. Through the course of the on-sale, I always have price as a lever, right? Most of our so-called dynamic pricing is actually I'm reducing the price of tickets that haven't sold yet because I see that the market clearing price, I'm not quite there. By definition, you can never raise the price of a ticket you've already sold. That is why most of your dynamic pricing is actually lowering the price. On the cost side, that's a muscle that we developed pretty well during COVID. We had to take all of our costs out. We structurally took a couple of hundred million of costs out.
We are looking a lot this year at how do we make sure we get through this year very lean. The worst case is you're now cleaning out three or four years of what some things they've built back up. Forcing ourselves to go back through. Absolutely, if we need to take costs out, we're very prepared to do that.
Now, I would think on the front end, right, there's still just given that supply and demand imbalance. When you look at the kind of secondary market, you can observe it in real time, just a lot of room to kind of lean into that provided the artist want to.
No, absolutely. We always remind ourselves that that also is the first, it's the first wall in any slowdown, right? You'll see the compression between the secondary and the primary. We know that we are reasonably priced today because secondary continues to be priced for the best seats well above what the primary pricing is. That's our first line of defense. One of the many things that we look at to gauge is demand coming down or being affected at all. We haven't seen that play out in pricing on the secondary.
Got it. Your release at earnings noted full sellouts for some upcoming major festivals. How do you see the health of that market just within the context of the trade press putting a lot of scrutiny on Coachella, their sell-through, kind of the percent of fans buying through Buy Now Pay Later, right? Have you seen a change in purchasing patterns for your own events beyond just sort of a natural adoption of that?
Yeah, the press seldom writes the article about the good news. I think if I start with the macro, 150-odd festivals we have, this year will be better than last year. Demand in aggregate, global, very strong. We expect to have a very good festival year, again, better than last year. No degradation of demand. I'll give you a very specific example. We had the on-sale for Austin City Limits last week. We sold over 400,000 tickets over the first weekend, sold out all of our three-day GA tickets within the first 48 hours, best on-sale since I think they said 2016. Tremendous demand for a huge festival, two weekends in Austin. No sign of any issues whatsoever. Buy Now, Pay Later. B uy Now the installments, Buy Now, Pay Later. That's been around for a very long time.
Again, globally for us on festivals, on average, usually 30%-60% of fans use it. I looked at seven festivals we've had playoff in the U.S. Five are down a bit, a couple are up a bit. I think that I think the press on that is wildly overstated. I do not think that there's any real change, again, in the macro in terms of consumer behavior with the Buy Now, Pay Later.
Got it. Maybe looking a bit further out. In 2026, we will see the FIFA World Cup across 16 stadiums in North America. There is a positive benefit in that you ticket a number of these locations, but the event is arguably disruptive to available concert nights. How should investors view this as impacting kind of your touring flow and maybe the venue mix next year?
Yeah, so my expectation for next year is certainly in the U.S., it'll be more of an amphitheater and arena-driven year because of that. Internationally, we'll see extremely high stadium volume. We're already booking up a lot of stadiums for next year. I would expect continued strong, even growth in the stadiums next year. I think we'll also see more greenfield sites that we focus on. If you look at what we've done in Toronto, we didn't have the availability in Toronto for the volume of stadium shows, the Coldplays, Oasis, and others that we knew were coming through. We built a temporary stadium there. We'll do 15 shows, 700,000 fans. That's an opportunity for us next year. We're already looking at where else in the U.S. we can do that.
We'll probably see a bit more similar semi-residency, even at the stadium level, similar to what Beyoncé is doing. Pick a few cities, do a large number of stadiums. We'll see some more of that activity. Every year it throws us a different curveball. It was the Olympics last year. Next year it's World Cup. It's our job to be planning now to figure out how do we continue to drive the volume of shows on a global basis.
Is the way too early 2027 question? North America stadium flow would then come back.
Probably, yeah. Yeah. And then you got Olympics in LA in 2028. So yes, every year is something different. Maybe 2027 will be the simpler year.
Got it. Okay. Maybe shifting gears to Venue Nation, you're guiding to double-digit fan growth at your operated venues in 2025. You've talked to four venues opening during the year, but can you also refresh us as to what you opened last year, how the early returns look for those locations, and sort of what are some of the learnings as you scale up CapEx?
Yeah. I guess our biggest couple of ones last year, I'm not going to remember them all, were the massive remodel of Foro Sol, now Estadio GNP in Mexico City, which has been a home run. That building is, I think it might be the largest music-driven venue in the world, over 2 million fans this year attending shows. Home run in terms of the return, more premium. You'll get that theme a lot here when we talk about our venues. Better overall experience, better concessions, making, again, a lot of reduced friction for fans to get what they want to get. Jones Beach was the other big one that we opened last year. I think you and others have been out there and seen just complete transformation in terms of what that fan experience can be.
Again, in totality, we're delivering the returns, the 20%+ returns that we set out on average to deliver for that portfolio. We're opening several amphitheaters this year. We also acquired Lisbon, an amphitheater arena there. We took over the lease in Helsinki. We're building the building in the Foro Sol type building in Colombia. We got a lot of venues going in. We'll continue to focus on what is the fan experience to give them options and particularly on the premium to give them the ability to spend the money they want to spend. We're not slowing down at all, continuing to look for more opportunities. We announced, I think it was this morning or last night, I've lost track. We're putting in a new 5,000 capacity theater in Atlanta as part of a major development there.
Every owner in the U.S. of a sports team that's, again, announced in D.C. last week, every owner of a major sports team that wants to have their new building is not just building a building anymore, right? They're building an entertainment district around it. Every conversation, we are now getting the call immediately when they decide we're putting in that entertainment district. We're having the conversation early to figure out what is the right venue for that market that it needs. How do we design the venue? How do we design the access to the venue? We're in those conversations early. I think that's probably the biggest set of opportunities in the U.S. is work with these owners on these sports districts and build the portfolio of large theaters around the country that we'll be able to tour through.
I'm curious, abroad, you mentioned Lisbon. That's such a unique arena for Live Nation. You don't have a lot of those types of venues. What's kind of the playbook there?
I think that'll be more what we're looking to do internationally, whether we're building them or buying them. Buying them, you're often buying an arena that's been around for a while, probably hasn't had a lot of capital invested in it, needs a refurbishment, needs premium, is probably not quite able to gross what the artist could gross here in the U.S. at one of the NBA arenas. We need to do some work so that they're equally motivated to be going to Europe as they are to go to the U.S. Helsinki would be another one that we took over a long-term lease on, coming out of that one being shut down for a few years because of some of the embargoes there. No, arenas are number one, I would say, in the European market.
Arenas in some of these buildings like we're building down in Colombia for South America and for some of the Asian markets are huge opportunities.
Got it. For 2025, you provided an expectation for flattish margins at concerts. I expect the increased O&O footprint plays a part in that, but how should we think about your embedded expectation for on-site spend this year? I know the sample size is really small. We just talked about it. How's that look so far?
Yeah, we now have 25. On earnings call, I talked, we had 11 shows playoff. Now we've had 25 shows. So we're up to about 2% of our shows. All the signs are good. Per cap spending is up overall. Ancillary revenue per fan is up. It's across all the pieces, the parking, the upsell, the food and beverage, all of that is up, which I take just that's good news, right? I mean, if it were down, we'd all be highly concerned, reading a lot into it. We're up. It's great. Again, as I said, it's only 2%. At the same time, all of our indoor numbers are up. We're seeing no issues is how I'd characterize it. We've got a new team running the amphitheaters. They're doing a great job. Really thinking about how do we tailor the experiences more?
We put in new digital concessions, which lets us think about what's the right concessions to have for this show. It's going to be different from a country show versus a K-pop show with a lot of kids versus an urban show. Just what the products that they want to buy may be different. You have different numbers of points of sale. You have a lot of Olipop at the K-pop show, right? You got a lot of beer at the country show. You are just thinking a little differently about how is it, what do you market? How do you think about the food? How do you think about the beverage? How do you think about your alcohol strategy? How do you do that on a differentiated basis for what that show is? Also, how do you think about being flexible with your premium?
What is that premium experience for those different sorts of events? Out of the gates, it's looking good. We'll continue to monitor it, but we're feeling good going into the summer now.
Okay. When we've visited your venues in the past, we've always kind of been struck by the level of customer segmentation, especially at the festivals and kind of delivering those high-end experiences to those who want to pay for it. How do you think about the kind of incremental opportunity on hospitality?
Yeah, we continue to benchmark ourselves against the best. Some of the arenas that have, if you look at the new arenas, they've certainly continued to innovate. You got Intuit out in LA . They've done a fantastic job thinking about a lot of different use cases. We shamelessly look at what they're doing and say, how can we take those ideas and apply them in our amphitheaters or at our festivals? We got a world-class team, the guys at C3 on the festival side. Every year, they're trying something new at a few of the festivals. They're rolling some things out. They're getting rid of things that didn't work, that have had their day. They're always trying new products. I think we'll continue to be very aggressive in testing things, innovating, rolling them out. As I said, early reports this year are all good on the numbers.
Great. Just shifting gears. On the Ticketmaster side, you noted through mid-April volume in GTV up 5% and 10% respectively. It would be great to hear an update. Within these stats, I know there is some nuance between concerts for Live, concerts for competing promoters, and then non-concerts. Maybe just following up on that, for events like Sports and Family, can you walk through for investors what tracked differently relative to your supply expectation at the start of the year?
Yeah, I think some of that was taken not quite how I expected. I was trying to make a point about the strength of the Live Nation Concerts. I think the read-through was a little different. On the sports side, what happened in Q1 is last year Q1, you had Copa America tournament. You also had a number of soccer teams from Europe coming over to the U.S. and doing promotional tours. You had some very specific soccer events going on Q1 last year that were not going on this year. That was the majority of what was going on in sports.
If we look out over the rest of this year, if I look at sports, arts, family, everything non-concerts, I think we expect those numbers to be growing in the second half, probably flattish for Q2 from a Ticketmaster perspective, but growing for the second half, not quite catching up to some of what we lost in Q1, but no underlying supply or demand issues growing into the second half. A similar story for the non-Live Nation concerts. It was down for reasons that we talked about, just not the same level of touring activity in Q1. We will see that start to come back in Q2 and then into the second half, e xpect to see that be growing as well. Good back half of the year in all of that and nothing to read through in terms of any real supply-demand dynamics.
Right. With sports, the supply issue is nothing you've seen on a per event basis.
Right.
Got it. All right. You just touched upon this a little bit, but maybe we just drill in more. An acceleration in ticketing growth in the back half. I know there are some other factors. There is an FX headwind at ticketing in Q2. There is some on-sale timing. Maybe just touch on the international mix. There is an allocation model that is different in the U.S., how that hits the accounting.
Yeah. No, we're not simple. So yeah, we said it on the call, FX, I don't know, I guess it depends on the hour what the dollar is doing. As the dollar has come back a bit, it's looking better for the second half in terms of the FX impact. Q2, we still have a chunk of FX. If you just look at cycling through what was going on last year, you still have some Q2 exposure, majority of which will play out on the ticketing side. Internationally, growth of stadiums is a factor in terms of increased deferral for international markets. The other thing you have, a couple of other things. One is that really almost all of our arena growth this year is in the international markets. That also speaks to an increase in terms of the deferred revenue that takes place on those shows.
If you look at the timing of our arena and amphitheater shows, you have about 200 shows that took place in Q2 of last year taking place in Q3 of this year, which is about 2 million fans. You just have a different timing this year on some of that activity. I think driven in part because you have so much stadium activity that is starting to roll through in Q2. Some of that other activity is just a little later in the year, which impacts Ticketmaster. Again, the way we look at it, we do not overly stress about the quarter to quarter. I know everybody is building models. It wants to try to get those right. That is fine. Those will be the factors that will just impact some of the Q2, Q3 timing this year.
Just so we can touch upon it so everyone understands, with the deferrals, right, in Europe, it's an allocation model for ticketing.
Right. In Europe, for any shows that we sell tickets, and generally speaking, the venue controls half the tickets, the promoter controls half the tickets. If it is tickets sold for one of our shows, that revenue and profitability is deferred until the event takes place. When we sell a bunch of stadiums early on, we do not get to count that money. When we sell the arenas that are now in Q3 instead of Q2, we count that money at Ticketmaster in Q3 instead of Q2.
Got it. Sponsorship is an area that kind of performs for live so regularly that you tend not to get asked about it too much at the end of these Q&As. At least one new facet of value creation here is you using your kind of venue footprint to help emerging consumer brands scale in return for equity. Liquid Death is probably the most notable example of that I can think of. How should investors view the long-term value of this model given the inherent kind of lack of visibility they have into it outside of monetization events?
Yeah. We think that first and foremost, our job is to think like owners. So how do we value maximize? And then we worry about the exactness of the metrics and how to communicate it and how to get people comfortable with that. These things are still the exception. The vast, vast majority of what our sponsorship brand partnership team does is take big checks from companies that want to get tied into our platform, whether it's on-site or online. That will continue to be the focus. Where there are opportunities where we see an emerging product that we can help make successful, we want to make sure we're sharing in the true economics of that success and not just taking a small check from a startup because that's all they can afford. Liquid Death is a great example of that.
We announced the other day Jolene Coffee that we're doing. We will continue to have a handful of those, a few of them each year probably. When they work like they do with Liquid Death, you will see a nice pickup when that gets liquidated. It is going to continue to be how can we make the most out of the platform while also delivering a great experience for our fans, right? We could have taken Liquid Death. We could have taken the check from a traditional water company. We thought that we could create more value for our shareholders, a better experience for the fans by having the Liquid Death can and just be more relevant by taking that path. We look through it through all of those lenses.
All right. I asked you about the exception, but sponsorship, I think you said committed to up double digits, right?
Yeah. Yeah. It's the little engine that can. It continues to, that team, Russell and those guys continue to do a great job of, again, globally working with brands to figure out what's the best way to get connected with those music fans. Again, when you have 150+ million music fans that you're working with every year, it's such a unique scale opportunity for brands to have that direct connection with fans. There's too much that's done over the airwaves or a very tactical direct advertising. This lets them work with us, figure out how they can enhance the fan experience, make a real connection. We've done lots of research.
Fans give brands permission to be there, and it creates an improved perception of the brand when they add some value, whether you're at a festival or an amphitheater in any way, getting tickets because you're a member at T-Mobile or Citi or anything else. It creates that great brand perception. Russell and the team continue to find new ways to deliver that.
Okay, great. I want to touch upon regulatory, but maybe I'll frame it slightly differently. When I read the DOJ complaint or some of the letters from politicians who have been critical, there's a real disconnect, right, between how they view the state of the industry and the experience I think you believe Live Nation is providing. How do you think about the steps that you can execute to better highlight the company's role? On the ticketing side, what can Ticketmaster do to improve the kind of fan experience, recognizing there's just an inherent supply-demand challenge?
Yeah. I think the piece that will underlie everything is the concept of transparency. As you said, I don't have a front row that's a mile wide at $25 a ticket. The best thing that we can do as the next step is just create a lot of transparency. We've advocated for a lot of reforms. A lot of those reforms are about increased transparency and ending deceptive practices that particularly take place in the secondary market. I think it's one of the great things we've seen with the executive order. That executive order is really targeted at the secondary market and saying, this is the White House saying, let us understand what's really going on in the secondary. What are all the deceptive practices? How do we put an end to that?
Some of the things in the ticketing bill that's currently underway about reinforced protection with the BOTS Act, about ending spec selling, getting rid of deceptive URLs are all about transparency. I think for our part, continuing to improve on the transparency of the on-sale process. I think it's a lot better now than it was a year, a year and a half ago where through the queue, we're doing a lot more communication. You come to a high-demand on-sale, we're going to tell you where are you in the queue. It may suck to be 60,000, but it's better than me not telling you and making you wait three hours, and then you find out. We're telling you what's the range of prices that you're going to pay while you're in the queue so you're not surprised. We're going to give you all-in pricing now.
We've been doing it with our venues that we can control for, I guess, the past year and a half or so. Now it's the mandate all-in everywhere in the U.S. More and more be focused on let's try to give the fans as good of an experience as possible, recognizing the inherent limits on how many tickets there are and the fact that those tickets are going to be priced to represent the value they have. I don't think anybody's defensive about that. We have to recognize they were underpriced for a long time. Like everything else in society, that evolves and that corrects itself.
If we can provide the right transparency, I think that hopefully at least it gets to the point of it's just seen as a utility, as a service that is provided efficiently and doesn't have an agenda and is not trying to do anything nefarious.
Great. All right. We're about out of time, Joe. Thanks for being here.
All right. Thank you.