IN AN effort to weather the Covid-19 storm, Live Nation Entertainment (LNE) increased the value of its bonds sale to $1.2 billion, days after stating it would be worth $800 million.
In its latest bout of fund-raising (see below) and follows last month’s announcement of a $500m cost-cutting exercise. The addition of the notes, which ae due for repayment in 2027, brings LNE’s long-term debt to $4.85bn.
Accounts for the first quarter (Q1) of the year show long-term debt climbed 11.6 per cent to $3.65bn, compared with $3.271bn at 31 December 2019, which itself included a $500m increase that year.
LNE reported revenues of $1.37bn in Q1, down 21 per cent year-on-year, and an adjusted operating loss of $20.5 million.
The company began suspending forthcoming shows from 13 March as a result of the Covid-19 pandemic, meaning it had no events for almost three weeks of the quarter.
Q1 revenue from concerts was down 25 per cent, to $993.4m, with event numbers down from 8,207 in the same quarter last year to 7,067. Ticketing revenue was $284.3m, down 16 per cent year-on-year, and attendance fell from 14.9 to 10.4m during the same period.
LNE says 80 per cent of its shows impacted by the virus outbreak have been rescheduled with president/CEO Michael Rapino reporting that 90 per cent of subsidiary Ticketmaster customers have opted to keep tickets for postponed shows, rather than request a refund.
“[That] is the clearest demonstration of pent-up demand that will enable us to quickly start concerts back up,” he says.
LNE’s short-term debt fell from $37.795m at the end of last year to $36.036m at the close of Q1, with the overall total of short- and long-term debt at $3.687bn.
Its event-related deferred revenue was $2bn as of 31 March, compared to $1.8bn at the same point last year. On 31 March LNE had $3.3bn in cash and cash equivalents, including $842 million in advance ticket sales.
In April LNE announced a $500m cost cutting exercise, just weeks later the Public Investment Fund, controlled by Saudi Arabia’s Crown Prince Mohammed Bin Salman, acquired a 5.7 per cent stake in the company on the open market.
Meanwhile, LNE has had a credit rating downgraded by research firm S&P Global Ratings, from from BB- to B+. S&P said the change resulted from their being “substantial risk that delayed live music event scheduling and poor event attendance could cause credit metrics to remain weak”.