- Associated Press - Thursday, July 15, 2010

LOS ANGELES (AP) - Investors sold off shares in Live Nation Entertainment Inc. on Thursday, despite the concert promotion and ticket-selling giant’s bid to overcome a rash of negative press about a weak summer concert season.

Live Nation took its case directly to Wall Street analysts, but midway through the meeting, its shares plummeted more than 16 percent, wiping out some $322 million in market value. The stock recovered somewhat to end the day with an 11 percent decline, down $1.24 at $10.19.

The company said its adjusted operating income for 2010 is expected to be $405 million, down from $445 million last year, despite the benefits of its merger with Ticketmaster Entertainment. Earnings could fall to $365 million if things get worse, the company said.

Chief Executive Michael Rapino said he noticed the reaction of analysts and investors attending the New York presentation as the company shared its earnings outlook. “We had a real buzz kill,” he said.

Executive Chairman Irving Azoff, who presented via video conference, chided investors for the sell-off, at one point looking off camera and calling the stock “ridiculously cheap,” and said investors would be “shortsighted” to sell.

The executives emphasized that Live Nation is doing better than the overall industry, which has been hurt by a series of tour cancellations.

Live Nation sold 4 percent fewer tickets in the first six months of the year compared to last year. For the Top 100 bands in the industry as a whole, the drop was 12 percent.

The company’s gross ticket revenue was down 9 percent to $822 million for the first six months. That compared to a 17 percent decline to $966 million for the Top 100 tours, according to tracking firm Pollstar.

It said industry ticket volumes could fall 15 percent in the second half, even as it struggles to fill its summer amphitheaters by using steep discounts.

U2’s postponement of its tour until next year will cost the company $6 million this year, although it should make it up next year on the rescheduled tour.

Other acts, such as Rihanna, The Eagles, Simon and Garfunkel, The Jonas Brothers and Limp Bizkit have also canceled or postponed tour dates.

The company said that while the most popular acts continue to sell out, less popular ones are having trouble.

“It’s not a U2 or a Lady Gaga problem,” said Jason Garner, the chief executive of Live Nation’s global music group. “There’s that middle segment of the bands … that’s trying to have that same $50 or $60 price that Jay-Z has. They’re getting nipped in the bud.”

More artists are going out on tour to make money because recorded music sales continue to fall. That’s creating a glut of acts whose tickets are priced too high for this economy, said Pollstar editor-in-chief Gary Bongiovanni.

“Prices have to come down to a level that the public will accept,” he said.

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