Show me the Money

At a time when the economy is tanking, most radio stocks are under $1, and record companies’ revenues are declining rapidly, it is quite newsworthy when some company related to the music industry shows strong financial gains. Enter – Live Nation. So far, it appears that Live Nation has hit upon a business plan that is working in these troubling times for the music industry. They have centered their model around the live concert and signing up major artists for 360 deals. They have also expanded their business offerings and are partnering with other concert promoters around the world.

Many critics have pointed to Live Nation’s extravagant multi-million dollar deals with artists such as Jay-Z, Madonna, and U2. Well, according to these numbers, the strategy has traction:

• 3rd Quarter Net Income = $139.9 million, up from $46.1 million same period last year.
• 3rd Quarter Revenues = $1.59 billion, up 9.4% from last year.
• North American Revenues = $864 million (up 9.5%)
• International Revenus = $480.7 million (up 43.8%)
• Put on over 4,800 concerts in 57 countries during the 3rd quarter.
• Live Nation now has 770 sponsors for its various shows.

One thing to note is that these high income numbers also reflect a sale of its motor sports division during this quarter for a price of $167.6 million. Still, all data shows attendance increasing, new bands being signed, and more international expansion. And CEO Michael Rapino said that the economic downturn has not really affected concert attendance. Fans want to see their favorite bands live.

Stay tuned,
Erik
erikrostad.com