Live Nation Entertainment, Inc. Q4 FY2025 earnings call

• Sponsorship: AOI over 70% booked and running double digits ahead, expected double-digit growth. • Ticketing: Not expecting much growth this year with some headwinds on secondary. • Concerts: Robust demand on supply-demand dynamics, large venues, AMPs, arenas, stadiums all showing growth. • Venue Nation: Preopening costs ramping up in 2026, with international being a large focus and not looking to buy venue management companies as a regular strategy. • DOJ ruling: Pleasantly surprised by dismissal of promotion and booking as monopoly, taking away breakup of company argument and making case harder for FTC. • Secondary market: Took steps to restrict brokers, reducing tickets listed by brokers on platform, and artists gaining more control over tickets. • Demand side: Strong consistent demand across regions, venues, and consumer segments, 75% of tickets under $100, artists aware of keeping tickets affordable. • Distribution: Superstar stuff has own reach, other shows use various distribution partners to reach customers.

Sponsorship expected to continue double-digit growth, AOI over 70% booked and running double digits ahead. Ticketing not expecting much growth this year with some headwinds on secondary. Concerts expected double-digit growth with robust demand on supply-demand dynamics. Venue Nation has preopening expenses ramping up in 2026 with a ramp-up in costs, with international being a large focus for Venue Nation opportunity.

• Anticipates double-digit AOI growth in 2026. • Sponsorship expected to continue double-digit growth. • Concerts expected double-digit solid growth with robust demand on supply-demand dynamics. • Venue Nation has a ramp-up in costs with expectation of steady state and growth over time.

• Risks related to forward-looking statements subject to uncertainties that could cause actual results to differ, including those related to company's anticipated financial performance, business prospects, etc. • Potential impact of FTC actions and secondary market legislation on the business. • Risks associated with Venue Nation preopening expenses and ramp-up. • Impact of DOJ and FTC rulings on the company's structure and operations.

Q: Maybe to kick it off on the outlook for Joe. I wanted to see if you'd be willing to talk a little bit more about the building blocks to the outlook for double-digit AOI growth in 2026. Just curious if you could talk a little bit more about the puts and takes investors should be keeping in mind as they thinks through segment contribution this year. And ultimately, just at a high level, what's giving you confidence as you sit here today looking at the business, ahead for the next 12 months or so to guide for double-digit growth despite some of the headwinds. I think we're seeing Ticketmaster and then some of the preopening expense at Venue Nation on the back of some investment there, just the confidence in the double-digit guide despite some of those factors?

A: Sure. Happy to give you that guidance. So let's just take it by division. So sponsorship straightforward, expected to continue to be up double digits. AOI this year were over 70% booked and running double digits ahead. So I think we've got a pretty good visibility into the pipeline there to give us that confidence. On ticketing, I'd say we're not expecting a lot out of it this year. We've got some underlying mid-single-digit growth we've got some onetime headwinds on secondary and we'll let somebody else ask the question on that, we go into more detail on it. But -- so we're not expecting a lot there even with some underlying health and improvement on the fundamentals. And then it really comes down to concerts, getting some double-digit solid growth out of that, which, as we look to our supply-demand dynamics, we lay a lot of them out in the earnings release on the demand side, where we continue to see extremely robust demand on all aspects of the business globally. On the supply side, we gave你that the large venues were up. AMPs are up versus '24 and '25. We got about 80% of our shows booked. So we're optimistic that we can maintain staying ahead of '24 and '25. Arenas are up double digits in terms of our show count and now, which is largely U.S. driven. Last year, it was really international driven. This year, you got more U.S. driven. And then stadiums were up double digits. We've managed because of the forward planning to get the U.S. to be up a bit, but it's really driven by international being well up on stadiums even after a banner growth last year. U.K. and Europe, in particular, really seeing strong growth in our stadium business.

Q: Maybe switching gears to the DOJ. Yesterday, the judge partially granted your motion on the summary judgment dismissing claims that you're a monopoly and promotion and booking. I guess you're still going to proceed to trial on Venue-facing ticketing and [ AMPs ] time. But can you tell us your opinion on what the dismissal means for a potential breakup of the company and other structural or behavioral remedies?

A: Thanks, Brandon. Yes, we were obviously very pleasantly surprised. We never expected to get much of anything on that ruling, but pleasantly surprised that they're seeing the facts laid out on the table. As you said, the first thing that they determined was that the promotion and booking services are not a monopoly. It's not an accurate market definition, which in our minds, really takes away the breakup of the company argument because the breakup of the company argument was founded on some notion of mutually reinforcing monopolies. And they just found that the promotion and booking side isn't. So we think that, that is critical element takes away that edge risk that some folks had. And then the other key thing that they decided was that the national consumer monopoly market was also dismissed. And so what that means on a practical basis is they need to demonstrate that Ticketmaster's so-called monopoly harms the venues, not that they can just say it harm's fans, which would be a more emotional topic. So we think that also makes the case somewhat more difficult for them. So we're very pleased with yesterday.

Q: Maybe switching agencies to the FTC. It's been several months, since the FTC hoopla started and you took a bunch of steps aimed at bad secondary market behavior. You reiterated in your answer to Stephen's question that it's having a real impact on Ticketmaster's secondary business. But can you tell us your view of the impact that your initiatives are having on the broader industry? And then maybe in the wake of the Senate hearing and the secondary price cap legislation that we're seeing. How you see the future of the secondary industry playing out in general?

A: Sure, I'll take the first part and I'll let Michael take the back part. In terms of what we're doing, I would put it in 2 buckets, what we're doing. 1 is -- as it relates to allowing brokers to sell tickets on our platform, we took some immediate action shortly after the FTC lawsuit that dramatically restricts the brokers, who have tickets from selling them on our platform, limiting them to 1 broker account per tax ID and the number of tickets being sold needing to stay within the limits. So the impact of that has been to substantially reduce roughly cut in half the number of tickets that are being listed by brokers for concerts on our platform. Now we think a lot of those are still being sold on the other platforms at this point, pending them taking similar steps. But the -- but we're also taking additional steps to stop the scalpers from getting the tickets in the first place. So我们have ramped up our efforts starting with account creation and using identity verification more in account creation. We are increasing the use of various tools, including identity verification for artist sign up and for queues to try to give real fans a better chance than the brokers in terms of buying the tickets we're increasing our use of face value exchange. All of these tools, we think, have been effective in helping shrink the overall industry and keeping the artists with more control over tickets and their relationship with their fans. I don't know, Michael, if you want to comment on legislation.

Q: I guess, first for Joe, it'd be kind of helpful if you could dig in a bit more on the demand side of what you're seeing in terms of the indicators you could parse that by regions or venues or consumer segments, that would be helpful. And then for Michael, you've been quite active in arena acquisitions in Europe over the past few months. So I wanted to see if you can speak a bit more to the playbook there in terms of kind of the investments you're making into those venues and then just how it plays into your broader goals across the continent.

A: Sure. On the demand side, we're continuing to see very strong consistent demand. We gave你on the earnings release, a number of specific points on just the volume of fans that are showing up for artists how tremendously popular they continue to be. It also flows through to festivals. We continue to see strength of demand at the club and theater level. I think, the thing that to continue to remind ourselves to continue to remind you guys is, if you look at the U.S., 75% of the tickets are under $100. Artists are acutely aware of the need to have all of their fans be able to afford to buy a ticket, maybe not the front row, but to buy a ticket and they're very focused on keeping it affordable. So we're not seeing any pullback, any issues whatsoever in demand for any budget conscious fans. Sorry, Michael, you're on mute, if you want to...

Q: 2, if I could. On ticketing GTV growth, I know there was some lighter sports and third-party activity in the first half of the year. But curious how that subcategory grew in the second half of the year and just any kind of forward indications of how those kind of 2 areas of the ticketing business are pacing looking ahead of the '26. And then separately, Spotify, the other week reported facilitating about $1 billion, and I think it was over $1 billion in ticket purchase activity through the platform. I'm curious your thoughts on -- do you think that integration is growing the industry overall? Or is it just shifting the point of discovery. Any kind of feedback on how you view that integration and it's success would be helpful.

A: Yes. Just on Ticketmaster in terms of the GTV. So we ended the year with GTV growing about 6%, which was driven by concerts, really fully 9% increase in concerts with a 1% decline in sports and other third party. So as we look to this year, we expect to see that probably accelerate a bit. I think we'll see some come back on the other pieces over the course of the year. You need to see it play out, but we feel good about the runway that Ticketmaster's on an operational basis. We didn't think the majority of it will come from concerts, but it won't be overwhelming as it was this year.

Q: 2 for Michael or Joe, please. First, I appreciate the extra disclosure on Venue Nation. Just given the preopening costs ramping up in '26, can you help us think about the overall ramp and trajectory for Venue Nation on a total portfolio AOI basis to reach that run rate in '28 and '29, that你called out? And then separately, when you think about the longer-term Venue Nation opportunity, how big of a contributor is international versus U.S. when you're thinking about that going forward?

A: So just first on the specific numbers. So this is the first time we've given你the exact numbers, but I think we've been talking about this concept for a while, which is you've got a bit of a ramp-up costs as we build out Venue Nation and some of those ramp-up costs are going to be large as a percentage of the benefit in your first few years. So you're seeing that $25 million cost this year, ramping up to -- sorry, last year, ramping up to $50 million this year. I don't expect it to continue increasing at that level as we get to more of a steady state. And then we start to get the full mature, when the buildings have been open 2 to 3 years. So I would expect we give你the fan count for both buildings that we opened last year in buildings that we're opening this year and how that is going to a steady state. We've given你the profitability per fan in different forms. I mean you can probably model out how you see the increases. But and then look at that in the context of the Investor Day and what we gave你over the multiyear in terms of the Venue Nation potential. So that should help you triangulate on the rate of increase.

Q: I had a few more on Venue Nation. First, Joe, to follow-up on what你just said, when we do use all the helpful detail you provided at the Investor Day and try to triangulate the rate of increase in the Venue Nation AOI. It really looks like this year 2026 could be an inflection year. And when you look at the AOI, the fan count build and revenue and AOI. It seems like it could accelerate further in 2027 and 2028. I know you don't provide specific guidance, but is that just the right framework to perhaps think about what's going on underneath the hood with not just Venue Nation and concerts, but maybe on a consolidated basis as well? And second, the acquisition of ForumNet Group in Italy was interesting. I know the heart of the deal was centered on their arena -- but there are 2 other venues in their portfolio as well. So I want to see if acquiring companies that operate in multiple venues could play a more prominent role in scaling Venue Nation going forward? Or was that more of a one-off?

A: Yes. And just in terms of the ramp, I think you will see an acceleration that you would naturally have if every set of venues that you get, if you build one, there's probably a 3-ish year to run rate when你buy them maybe a 2-year to run rate. So as we build that base, you're going to naturally get the benefit of all the pieces. I mean, just to give you a little bit of context. So if you look at how we envision building our owner/operated fan count this year, I'd say it's kind of 20% from venues we opened in '25 about 1/3 from venues we opened in '26 and about half organic. So if you think about that playing out as you add new venues, yes,你're going to accelerate your rate of increase because you just have more pieces that you're adding into that funnel. So I would absolutely expect each year to help grow that base of fans in our operated venues.

Q: Great. Just a follow-up on the demand side. Can you provide a bit more color on the recent down sale activity and sell-through rates, how they stack up advanced last year into the summer pipeline? And maybe a bit more color on consumers' willingness to pay up against higher ticket prices for the World Cup that we're seeing now?

A: Yes, in terms of the on sales, we're seeing consistent performance with overall demand sell-through levels as we were seeing last year. Obviously, every tour is a little different. We gave你a few at the very high end in the release with Harry Styles and BTS and Bruno Mars showing levels of demand higher than we've ever seen before. But in general, we're still seeing front to back the ticket selling across all the different sizes of venues. And then we're obviously -- we're not involved in FIFA at all. We're not involved in selling their tickets, so we can't really opine on what they're doing. What we do know is for the concerts, the artists are very acutely aware of who their fans are and how to manage that relationship with them and how to manage the brand. And as I said earlier, they're making sure they're pricing their tickets. So all their fans can get in the building and the front of house, where -- they think it's going to end up being somebody buying on secondary, if the brokers take them to get a big arbitrage, they'll take more of that money for themselves. So I think你're continuing to see that same macro story play out.

Q: Yes. So I mean, it seems like you're seeing a great international momentum across all regions. But I'm just curious, where you're seeing the best momentum -- is it in Europe, LatAm, Asia Pacific, and sort of what's the mix shift implication for margins和capital needs based on that? And then what's the biggest constraint internationally right now? Is it venues, local partners, regulation or for talent routing? And I have a follow-up.

A: Yes. We're seeing all the countries equally have the appetite for that live show. So whether it's Sao Paulo or Milan, the major cities around the world all want to have superstar.

Q: Great. And then I guess when you -- when Ticketmaster, venue chooses Ticketmaster today, what are the top 2 or 3 differentiators that are consistently closing the deal for you guys? Is it the fact that you have the best technology? Is it the fact that你're investing tremendously in fraud tools or bot prevention. Just curious what your feedback is on why venues choose你so frequently?

A: Yes. I think #1 reason why they choose us is because we just sell more tickets. Empirically a promoter or a manager would tell you, they look at the shows on the tour, the Ticketmaster ones are most effective at helping them sell the most tickets. Getting the highest grosses from their show. So what they can do in terms of using our distribution, using our marketing capabilities in terms of using our pricing tools to make sure they understand what's the right level to get to all the fans. So that's the #1 reason. And then depending on the marketplace in the U.S., where it's more mature, it's going to be more economics driven. In other markets that are less mature, some of the other software tools on the venue level are going to matter more. But selling tickets is the overriding that #1 factor.