Good morning, everyone. My name is Peter Henderson. I am the covering analyst of Live Nation Entertainment, and I'm very pleased to have Joe Berchtold with us this morning, the president and CFO of Live Nation. A lot to discuss, so let's get into it. So the live entertainment industry is benefiting from secular shifts towards experiences. Just, you know, wondering, how has Live Nation positioned itself to capture these tailwinds over the longer term?
Yeah, I think the first thing that we did 20 years ago is we really declared ourselves a global company when most people were focused on either single countries or fairly narrow regions. So we certainly saw, with the disruption in recorded music and the fact that artists were losing that revenue stream, that the live experience was going to be important from their standpoint, right? So from the supply standpoint, they were going to need to be out on the road to earn their living. And then that was also, frankly, the start of what we've seen as a pretty consistent macro trend of shifts of spend by consumers from goods into experiences. So we looked at ourselves as operating on a global stage, very focused on how can we work with artists to get them out.
I'd say that we quickly learned, wow, there really is just this global latent demand that exists for artists. At this point, our focus is figuring out what is every pocket of that latent demand. Clearly, the disruption in recorded music that caused the artists to not get the revenue stream anymore is the same technology that has enabled all the DSPs to stream the music globally. It's ultimately the same technology that has TikTok and Instagram providing social platforms for discovery and engagement with artists. That has shifted demand considerably from major markets, major cities where record companies were focused on their distribution, to being fully democratized on a global basis.
So as we saw both that demand trend, along with our focus on serving the artists and bringing them globally, we pretty quickly saw that we could make a substantial market in just bringing these two together. And that's led us to now 50-odd countries where we're operating in, gone from 40-ish million fans in 2010 to 160 or so million this year. So dramatic increase. And we see hundreds of millions of more fans out there that if we can just figure out how to unlock by bringing the artists to them, that there's great runway for continued growth.
Just, I guess, digging a little bit more into that, global expansion, as you mentioned, has certainly been a major pillar of your strategy. International revenue is growing faster than domestic revenue. Can you just sort of outline the priorities for the next growth legs internationally, and what is the right mix of owned venues, JVs, promoter partnerships to balance that risk and that return?
Yeah, I don't think we think about it as risk and return. I mean, we are in the risk business. We are in the business every year of $14-$15 billion this year of writing risk for artists to go out on the road. We guarantee their performance. We give them certainty for them to plan the show and then upside from that certainty. But in many respects, we are undertakers of that risk. And that's a core piece of our value proposition to the artist is they're going to know, I'm going to go out for 100 shows. I've got $50 million of guaranteed revenue that can help pay for the band, the production, the preparation, being out on the road, and then ultimately the money that I get to keep and take home.
So that's a core piece to how it is we've driven the growth is by being very willing to undertake that risk. So as we look at markets, we're not looking at from the standpoint when we want to grow of how do we share risk. We're looking at from the standpoint of where can we get the local knowledge that we can use to then better inform our global understanding of the business? Because there's always going to be some local nuances. And again, it's why we've got 20 offices in the U.S. and we have offices in 50 countries is because we understand that being on the ground, you're going to have a much better understanding of not just the local music, but even what type of demand there is for different genres globally, different artists globally. So we're looking to figure out who can we work with.
Usually, you're trying to find a promoter in that market. Promoters generally are going to come with a festival or a club or an amphitheater, some other piece of business. And so you want to go in and partner with them. You generally structure in a way that you want to keep them motivated to grow the business. You want to have enough ownership of it that we're motivated to use our platform and connect our platform to really drive the growth in that business. And I mean, we've had a number of success stories ranging in Germany, working with Marek Lieberberg, acquiring him as really just the promoter over the past decade, building that up to where it's the number two market in Europe for us now because we've together built that OCESA.
So we've talked a lot about Soberón, Alejandro and his team there, an absolute A asset. That working together and by bringing our content and bringing our ticketing, some of our sponsorship capabilities, we've been able to help them accelerate that growth to where that business has tripled in four or five years. So we have found it to be a very successful. Again, whether it's not so much about, oh, I know I want to have this mix of this is a JV versus this is an acquisition. It's who are the right people in that market? Usually, there aren't 10 options. You have one or two options you got to figure out. We took a long time with Japan. We've talked about Japan wanting to get in Japan for a long time.
Took us a long time to figure out that HIP and Kaori are the right partners, the right people, structure the right deal. Now we're off to the races with them. But you just have to take the time to find the right partner to set you up so you can bring your platform to bear.
Sure. And I guess recently you accelerated your OCESA deal, increasing your stake to 75%. I think it closed last week. That further solidifies your position in the fastest, or sorry, excuse me, fast-growing market in Mexico, I think the third largest concert market now.
Yeah, I think that's right. Yeah, yeah.
Incredible. But beyond OCESA, then what additional investments are planned for markets down in Latin America or South America, places like Brazil or Colombia? And how do you think about just the economic volatility of that region as well?
We're very long-term focused. So every market will have currency ups and downs in general, some level of volatility. I mean, I talk about economic volatility. I think every quarter for the last 12 quarters, I've been asked what's going to happen in the U.S. when the consumer goes away. You guys are too far over, right? And so for the same 12 quarters, we've said things are going fine. So one of the benefits of being very global is you have some of that diversity of the economy as well as diversity in other forms. So I don't think we spend a lot of time saying, oh, Latin America can be volatile. Yeah, it can be volatile, but it's probably not going to have the same volatility at the same time as Asia, as Europe, as the U.S. So that doesn't slow us down.
We see Latin America as a large market of very music-oriented, music-loving fan, lots of great indigenous content, lots of music from all the countries throughout Latin America, Mexico, and huge desire for international artists. So we'll continue to look for some local partners in any of the markets there that make sense to accelerate our growth. We will certainly, I know we'll talk more about venues, but we'll certainly be looking at venue opportunities, whether it's opportunities to acquire or to build new venues to help us have the infrastructure we want to bring that supply and demand together. There are times where you want to either create or improve the infrastructure to help you do that more effectively. So that's an absolute high priority. We have a team focused just on that.
Yeah. So I mean, I guess sort of thinking about it broader, but what percentage of your overall AOI could be international by, say, 2028? And what is the gating item there? Is it artist supply? I mean, as you mentioned, there's lots of artists, indigenous. Is it venue footprint? Is it the infrastructure of the countries?
Yeah. Well, I mean, we're certainly moving that way. This year, I think, will be the first year that we have more fans outside the U.S. than in the U.S. So we don't quite report North America as U.S. and Canada. So some of our external numbers don't quite jive with that, but probably should do U.S. and do Canada separately these days. But so this will be the first year that that happens. Now, if you look at our AOI, our revenue, that's gone in the past decade from probably 75% U.S. 60-ish%. If you ask, when are you going to have half-year concerts profitability by 2028? I'd say there's certainly, that would be very realistic depending on the pace of some of our venues. We have more venues in the U.S. that are very profitable with our amps and theaters and clubs here.
So that's going to weigh you a bit to the U.S., even though you have more international fans. You obviously have an incredibly successful ticketing business here that is of a scale and profitability that's not as quickly getting replicated internationally. You don't have the same sports leagues and all the other components put aside concerts. So I think we're on our way. I don't know if it's five years, 10 years, but it would certainly be our aspiration to be more international than U.S. because that's where most of the fans are.
Yeah, sure, sure. So I mean, as Live Nation continues to deliver very strong AOI growth, how are you sort of thinking about the sustainability of that trajectory over the next several years? And as part of that, I guess, if compounding double-digit growth that you and Michael have spoken about is the North Star, what does that path look like and which priorities will you lean in on the most?
Yeah, I think, trying to answer backward to forward. In terms of the priorities, we obviously lay out every fall. Here are the set of initiatives. Here are the six or seven initiatives that we're going to focus on over the next several years that we think can deliver double-digit growth, and I think if you look over the past 10, 12 years, we've been incredibly consistent. It's evolved a bit, but we don't show up and go, "Oh, this year we're going into, we're buying Bitcoin." We're pretty consistent in terms of what we do, mainly evolve a bit as we plant some seeds and those things come to bear. The two that we're talking the most about right now are our venue strategy and international, and there's a high degree of overlap between those two.
But on the venue side, we've seen that, A, we can just make a lot more money on a per-fan basis when they're in our venues. We think we're pretty good at operating them and have some natural advantages in being the operator of a venue relative to some other potential owners. And three, which I talked about a bit before, it's helpful in some locations to give us a better infrastructure to bring supply and demand together. Now, in terms of the sustainability, I think one of the benefits that we have is that diversification. Ultimately, while we're a global company, it's all very local. Your decision to go see Oasis last weekend, right, is a very local decision. My decision to go see Lainey Wilson last week in LA was a very local decision. And then take that and replicate that in hundreds of cities in 50 countries.
I'm not dependent on a blockbuster working this summer, right? I'm not dependent on this one drug successfully going through trial. I've got 50,000 different events that are taking place every year. You'll have some normal distribution curve of outcomes that we have teams focusing on each and every one of those 50,000 events, and they're being judged by those, so I think it's that diversification gives us a lot of strength in our sustainability.
Yeah, for sure, for sure. So I mean, I guess a lot of positive trends, a lot of it, I guess, is underpinned by demand, overall demand from the consumer. How do you think about sort of the next leg of demand? I mean, do you think more shows, more seats, higher monetization per fan? How do you think about demand from here?
Yeah, first and foremost, our view is we want to bring more artists and more fans together. If we can bring more artists and more fans together, I'm very confident we can unlock other good things to happen. So it's why we always start every one of our growth strategies with, okay, we're at 70 million fans. We want to get to 100 million fans. We're at 100 million fans. We want to get to 150. We're at 150. We want to get to 200 million fans. If we can do that, then we can figure out what are the other ways that we can monetize that. Well, some of the people will be in venues. We can do some things for ticketing. We can do some things for sponsorship and so on. So we've got a multitude of levers.
Ultimately, you want to continue to grow your fan count because that drives the other pieces of the success.
Yeah. So I guess moving more near term, you said 2025 is pacing towards double-digit AOI growth, record-deferred revenue, ticket sales pacing ahead of last year. What is the single biggest driver, if you had to pick one, of upside to the outlook for the second half of 2025? Volume, pricing, international?
Yeah. I think, again, first and foremost, we've talked a lot about this. It's an incredible stadium year. We've got a lot of great activity. The stadiums have been selling great. 40% of our stadium shows, 95% sold through in the first few weeks of the on-sale. Overall, I think our large venue, amphitheaters, arenas, stadiums, that activity of probably up 10% fan count. That's what's really driving our concerts growth this year. Just a phenomenal year in terms of how we've set that up. So in terms of upside, it's how do these shows close out? How do people continue to spend when they get to the venue? Are there a few more tours that we might drop in at the latter part of the year? And then as we move in towards planning for 2026, it's really timing at the end of the day.
But what on-sales do we have in 2025 versus 2026? We're shifting around, but that obviously impacts each year's economics. And we just try to guide everybody by the time we get to November to get a feel for how much of the activity is occurring Q4 versus Q1.
Yeah. So speaking of 2026, I think supply trends show that like 40%-50% of global stadiums are already booked. So what early indicators are you seeing in sort of artist supply and demand elasticity? And how might the FIFA events, the World Cup's going to be in North America next year, impact your stadium strategy?
I think it's impacted our stadium strategy by our getting out early, by our saying, "We know we're going to have constraints. There are 16 stadiums. They're going to lose a few months. So let's get out early to make sure we're really booking to either start early or end late in those markets. How can we get the availability? How can we get this stuff booked?" So we're well ahead of where we were expecting to be. Six months ago, I was a lot more concerned than I am today. We made good progress. We still have a long ways to go. I expect growth to be more. Again, we're still 40%-50% in stadiums, less in arenas and amps at this point.
But the hope would be that we have stadiums growth internationally, but then look towards the U.S. more on the arena and the amphitheater side for helping drive the business next year would be the mix I would expect.
Yeah. And you guys are going to have these, I mean, this is just part and parcel with the industry, right? You got the Olympics last year.
Yeah, no, exactly. Yeah. Olympics in 2028. Yeah, there's always some constraint that you're managing against. But no, we feel good. We don't really have shows on sale yet. So most of our demand indicators are around still right now, how are some of the things that are going on sale for later in the year and early next year doing, how are shows closing, how are people spending on site? All those indicators continue to look good. So we don't see any issues there.
That's good. Great. So I guess coming back to Venue Nation, talked a little bit about it, but maybe digging a little bit deeper. How do you think about investing that next dollar? And sort of what are the trade-offs that you contemplate as you consider buying versus building and partnering? And I guess also as part of that, what are you seeing from competition at this point? Whether or not it's AEG or PE firms or?
Yeah. I mean, you always have competition for everything you do, which is fine. Deeply competitive concert business, deeply competitive ticketing business. Our expectations on the venue side will be exactly the same. So it's our job to figure out in pieces and in total, how do we both create a strategy and then execute the strategy in a way that delivers value for our shareholders? You don't necessarily have a whole range of options when you go into a market. If you decide, "I want to go and I want to be in Paris," well, you don't have eight vacant lots and four people that want to sell their buildings, right? You go in and you say, "Okay, here, is there a build opportunity? Is there an acquisition? Does that person selling want to stay in and be a partner?
Do they want to sell out?" So each market you're looking at, you've usually got just a couple of different options. So you're trying to figure out in that market with the options you have, is there a structure that you can come up with that's attractive? The good thing is there's so many cities out there that really need that infrastructure or have that opportunity for us outside of the U.S. where you have the billion-dollar arenas, multi-billion-dollar stadiums. You get to the other markets, you're talking about infrastructure that often needs some investment because it hasn't had it in a while, or you're going to get something that's more focused on music at a much lower cost. There's just a lot of opportunities. So we don't have to be in London, right? We don't have to be in any single city.
We can say, "Oh, okay, let's go be in Lisbon instead. Let's be in Helsinki. Let's pick the market. Let's be in Cardiff because London doesn't work. We can't get something built and there's already the O2. Let's go to Cardiff because the local that I talked about earlier, right? If I can get an arena someplace and still put in 50 shows and have 100 nights busy, well, then I can make those economics work and it's attractive for us.
Yeah. I mean, obviously brilliant strategy. And just curious, how does the venue ownership change your sort of tour routing leverage? And also the economics versus third-party venues. And just, I guess, help us think through the uplift when an artist runs through your footprint versus third-party.
Yeah. I would never say we have leverage with artists. I mean, ultimately, the artist is making every final decision. So our job is to do a great job serving artists. And if we can do that, then they give us the opportunity to work with them and figure out a few ways to make a few dollars here and there. For us, and we've talked before, you have two to three times the profitability on a per-fan basis when they go through your venue because you get the beer money, you get the parking money, you get the venue side of the service fee, you get all those other revenue streams that come with being a venue.
And because we have a lot of artists that we work with, we have a lot of shows that we put on, if we pick market, we're not picking markets that the artist says, "Why the heck am I there?" Right? We're picking markets that are major markets in major cities that are very logical that we can show artists they have a strong fan base in. They're going to be delighted because it lets them continue to have more places to successfully tour and successfully have that same sort of growth for their show that they need to have in order to go to those markets. So again, I don't see it as any level of conflict or anything else with the artists. We are creating more places where the artists can go and make money. And that's great.
Totally. So, I guess turning to Ticketmaster, we talked about a little bit earlier, but how are you approaching sort of international expansion there and technological innovation just to maintain your leadership? And also how do you think about sort of navigating the regulatory landscapes in different countries and just overall enhancing value for the fans and partners alike?
Yeah. First of all, it's obviously a global addressable market. Any place that has a concert that has a show is ultimately going to need to be ticketed. We think that Ticketmaster is the best platform in the world for selling tickets, selling concert tickets in particular, providing a lot of services to the artist team in terms of marketing, pricing, and analytics and other areas. So we think it's a great platform. It's an interesting business also in that I think on one hand, everybody sees it as just it's an incredibly simple business. I just want to go on the marketplace and buy a ticket. Just like I want to go on Amazon or Walmart.com and buy a pair of shoes and have them delivered tomorrow. Why is this complicated?
There's not the understanding of what goes on behind the scenes, whether it's in sports, where you have one set of dynamics where tickets are effectively managed via brokers and put on the secondary market to disaggregate season tickets, or in the primary market where you have brokers, some just being right there with fans, some cheating to get more tickets, and the tickets go on the secondary, and why are they on the secondary? So all of that combined with the inherent, particularly in music, level of passion and commitment you have with fans combined with an era of superstars that more people want to go to than you have tickets.
All of that, put it in a pot and mix it up, creates a lot of noise and consternation and unhappiness. And when people are unhappy, they complain. And when politicians get complaints, they want to be perceived as acting.
So they're going to spend time acting. So I don't take it as anything that's really about us at the end of the day. I think it's about the industry. I think we're seeing some things now. Obviously, the executive order that came out. There is an increased desire for more transparency and more understanding, maybe some clearer rules on how people should behave. We don't have all of that yet. The Fair Ticketing Act that's sitting in Congress, I think, would be helpful. We'll see what comes out of the executive order that might be helpful. I think the more transparency, the better for the industry. And we've certainly seen over the past couple of years, we've tried to play our part in terms of creating more transparency. We led with all-in pricing well before it became regulated. We've supported a lot of other reforms.
I think the next couple of years, I think the transparency is inevitable. You're seeing it being discussed not just in the U.S., but in the U.K. and other places. That'll ultimately be good for the fans. It'll be good for the artists. It'll be good for everybody in the system.
Yeah. Ultimately, you just want a clear set of rules. I mean.
Exactly. Yeah.
Okay, so I mean, thinking sort of with ticketing, what innovations and new technologies are you most excited about in the live event space and ticketing? And how are you leveraging AI right now to drive those results?
Yeah. I think that AI for us, I wouldn't say that it started to really change things yet. We talked about this a little before. I am absolutely convinced that AI will be transformational for a number of businesses, ourselves included. I think seven years from now, there will be massive changes. What I don't know is the pace of some of those changes over the next seven years. It's clearly going to reduce costs. It's going to reduce costs on our technology team of building our systems and adding and creating new products. It's going to reduce the costs of customer service and fan support. It's going to reduce the cost of all of our infrastructure that we have that supports the venues with that venue ERP system.
Today, every show, every one of those 50,000 concerts, plus all the other tens of thousands sporting events and Disney on Ice and Harlem Globetrotters, everything else, every one of those shows, every venue is getting built one at a time, so you can just, it's not hard to imagine the tools you're going to have that are going to immensely automate that and reduce the cost for both the venue side as well as our side, so all of that will be in place, and then on the effectiveness side, the marketing, the pricing, the targeting to the fan of the offer, all of that, I think, will ultimately, I think, create a much more personalized interaction with the fan and what they want to have as opposed to what right now is still that 9:00 A.M. Saturday morning, 100,000-person rush to try to buy those Olivia Rodrigo tickets.
So again, I think a lot of that will transform. I think we tend to underestimate the level of impact that's going to exist over time, and we overestimate the amount of impact that will happen in the next 12 months. So rather than trying to fall into that same trap myself, I would say every one of those things that I talked about, we have initiatives driving forward. I generally don't go out and talk about how great the results are until we're far enough along that we have confidence in what we're going to deliver and what time frame.
That's great. That's great. So I guess shifting gears to sponsorship. Sponsorship is pacing up double digits. It's been a great area of growth for you guys over the years now. 95% committed for this year, I believe. Which verticals are driving that? What is sort of the multi-year retention that you guys are having on those? And how much runway remains on naming rights, in-venue digital, those things?
Yeah. I mean, just very tactically this year versus last year, we've had strong growth in financial services, travel, entertainment, technology verticals. If you step back and look a little more broader trend over the past five or six years, what you're really seeing is that the on-site, the festival sponsorship, and what we call venue or on-site at the venues we operate, along with the access, the pre-sales and such, those pieces of the business, those we would call verticals of our business, have all more than doubled. There's just an absolute focus on brands saying, "How do I tangibly reach a fan?" All the sponsorship that we do is really predominantly focused on how does the brand add value to that fan experience. It's more than just putting the name up.
Even if you're getting the name and title, your discussions are also, but then how do we bring that to life? That's great that I have the name and title. How do you really bring that to life and turn that into some value for the fans? Because if you deliver value for the fans, then they're going to embrace the brands and see it's very positive. We've done a lot of research that fans are very open to the brand interactions if they see them delivering some value in the experience for them. So in terms of runway, this obviously ties back into our venue strategy. So your runway is tremendous as you add fans and as you add venues, you're adding the most valuable assets you can by giving brands greater scale and the opportunity to reach those fans.
And in advertising, it's one of the scale begets success because advertisers generally want to have reach. So if you can give them a platform that gives them more reach, that makes it substantially more attractive.
So a few minutes left, the obligatory DOJ question. So I'm not going to ask you, obviously, to litigate it here, but the trial is set for March. How are you planning for various potential outcomes, whether or not that's continuation of status quo, some sort of behavioral remedies, etc.? How are you thinking through it, I guess, at this point? Obviously, there was a decision last night favorable to Google. Any thoughts on that?
Yeah. I read your note this morning. Still, everybody's still digesting it, I think. I start with, we run our businesses on a very decentralized basis. So there is nothing that we're doing, scheming behind the scenes about some integration connectedness that we'd say, "Oh my God, we can't continue to operate in that web in the same way." We run our businesses very decentralized. We spend time on DOJ, regulatory issues more broadly. A handful of us at corporate, we do our best to keep the businesses focused on running the business. Everything that we've told our teams at Ticketmaster on the concert side, the venue side is, "You guys keep running. You guys are running your business. You guys should not be worried for one minute about any of that. You guys just go out and compete hard in very competitive businesses.
Do your best, and we'll deal with that." We've said that most of the things that we think are of the greatest concern around exclusivity, length of exclusivity, these are not things that are ultimately drivers of our success. Exclusivity in ticketing is driven by how venues, certainly in the U.S., how venues seek to monetize their rights. So the question isn't, "Are we doing anything bad by forcing exclusivity?" Because we're not forcing it. We're not demanding it. That's what they're auctioning off. So if they're told that they can't auction off exclusivity, then fine, we'll adjust. As I said earlier, I think we got the best platform in the world. We've had clients that are non-exclusive. The vast majority of the time, even when they're non-exclusive, they put all their tickets through our platform because it's the best platform to sell tickets.
So I wouldn't say that it's impacting really how the business is operating at all at this point.
Yeah. Good. Good. So I guess one last question, a few minutes left. Capital allocation. So obviously, Venue Nation strategy is very important, but just what is sort of the target leverage range as you go through this current cycle? And obviously, I know there's a lot of inputs to think about there. And then beyond that, what conditions would you prioritize buybacks over sort of this new venue development strategy? I mean, it seems as though it'd be very limited considering how much success you are having, but just what scenario would drive buybacks?
Yeah. I think that the venue opportunities, whether it's building them or acquiring them, is absolutely the greatest shareholder value creation, given the returns that we're generating on that initiative. I think that we're focused on using, first and foremost, the cash that we generate as a business, and then we look at our balance sheet and as we grow our AOI, what kind of increased capacity we have that naturally grows with the business, and I think if we really hit a dry period and we were unable to close deals to acquire venues and unable to get them out of the ground, and you start building up too much excess cash or delever too greatly, then certainly you look at what are we going to do with all that cash?
The plans we have in place and that we've laid out, we laid out last November in terms of cash to be deployed over the next several years. If we're successful in driving as much venue activity as we hope we are, then that's where the cash will go for the next several years.
Yeah. And I mean, I guess the venue opportunity, you're currently focused, I guess, on sort of Europe and maybe South America, but then there's opportunities even, let's say, maybe 10 years down the line or something like that, places like India or.
Yeah. I know. Exactly. Right now, well, Asia would be the one, right? So across Asia, Latin America, Europe in particular, we just launched one in Salt Lake City the other day, a 6,000-capacity theater. So we've said there's a lot of opportunities in the U.S. That's kind of 5,000-6,000-capacity theater, often in conjunction with sports owners who are looking to build out around their arenas or stadiums and build more of an entertainment complex. So yeah, we think there's all that in the near term. And then you get into India, Africa, and the next horizons. And there's certainly more cities that I think ultimately in the next 10-15 years, they could take a venue than we have on the list today, just because you want to prioritize and work from what you have most active today.
Thank you. This has been a great discussion, really. Thank you for your time. Appreciate it. Thanks, Joe.
Thanks, Peter.