Live Nation Entertainment Reports Fourth Quarter & Full Year 2019 Results

In 2019, Live Nation delivered its ninth consecutive year of growth, with revenue up 7%, operating income up 19% and adjusted operating income ("AOI") up 14%. Starting with the core of our business, our concerts fan count was up five million to 98 million globally, driving AOI growth in all of our segments - concerts, sponsorship and ticketing - and demonstrating the effectiveness of our flywheel business model.

Concerts Flywheel Growing

In our Concerts segment, fans continue to find the live experience, from club shows to arenas to festivals, a top entertainment choice and the best way to celebrate their favorite artists and share the experience with other fans. In the U.S., over the past five years consumer spending on live entertainment has grown 7% annually, providing strong structural tailwinds to drive increased demand for concerts globally.

With these demand dynamics, in 2019 we delivered growth in concerts revenue of 8%. This growth was broad-based across our portfolio, with international fan count up 11%, while in North America, arenas, festivals and theaters & clubs contributed to our growth.Globally, festival and theater & club attendance was up double-digits, highlighting the strength of our global footprint and the value of a diversified portfolio of markets, genres and building types that have enabled our consistent growth over the past several years. And across all of the artists we work with, we invested well over $6 billion to promote 40,000 shows in 42 countries, with Live Nation by far the largest financial supporter of artists in music.

Average ticket prices for our amphitheater and arena shows are up double-digits since 2017, while sales of dynamically-priced Platinum tickets were up 66% for the year across 3,000 shows, as artists want more of the best seats in the house sold at market value at the onsale. Even with these increases, concerts remain a great deal for fans relative to other live experiences - our average ticket for a concert at one of our amphitheaters was $46 in 2019 relative to about $75 for an NBA game and over $100 for an NFL game.

Once at the show, average per fan spending grew as well. At our amphitheaters, spending grew by $2.50 to over $29 per head as we improved our product offering, reduced friction with shorter lines, and improved VIP hospitality offerings. This hospitality focus also grew on-site spending at our festivals and theaters & clubs, the result of a better experience for our fans across all our operated venues.

We added 38 new venues in 2019, including six new festivals and 18 new theaters & clubs. As we have gotten better at on-site hospitality over the past several years, this opens up more opportunities for us to operate more buildings where we make more money per fan, which then accelerates the on-site part of our flywheel.

The strength of our business is continuing in 2020, with concert tickets sold through mid-February for 2020 shows up 10% to 38 million, and a pipeline of 4,700 confirmed arena, stadium and amphitheater shows, up 30% from the same time last year. All venue types have strong show count growth, led by North America stadium and arena concerts.

Sponsorship Growth Accelerates

In our high-margin sponsorship business, we grew revenue by 17%, operating income by 17% and AOI by 16% in 2019. Venue sponsorship was a key growth driver in the year, up double-digits globally, with broad growth across amphitheaters, festivals and theaters & clubs.

Festivals had a particularly strong year. With the addition of Rock in Rio to our portfolio of marquee festivals, sponsorship revenue in this segment was up over 50%. Our top strategic sponsors have also been a key driver of our sponsorship segment, with 88 sponsors collectively spending approximately $400 million to reach our fans, and revenue from this group up 19% in the year.

In 2019, we broadened our brand partnership base by leveraging our Power of Live research, with particular success in the lifestyle space working with brands including Revlon, Vans and Clinique, as we demonstrated the importance of their products to concertgoers.

All this reinforces the power of our platform of 98 million fans, and the priority of brands to reach fans during the live experience. With over 70% of budgeted sponsorship net revenue for the year already committed, and despite 2020 being an off year for Rock in Rio in Brazil, we are confident we will deliver continued growth in our sponsorship segment this year.

Ticketmaster Extends Global Leadership

Ticketmaster further built its leadership position in 2019, growing operating income by 15% and AOI by 11%. Much of our growth came through reduced customer acquisition costs across both primary and secondary ticketing and from increased secondary ticketing volume, notably the NFL and other sporting events.

Our international ticketing business drove our growth in fee-bearing tickets and gross transaction value ("GTV"), led by our strong international concerts ticket sales. We now provide ticketing services in 31 countries and in 2019 delivered 115 million tickets internationally, with tremendous opportunity for continued growth on a global basis, particularly in the 15 markets where we promote concerts but do not yet have a substantial ticketing operation. Ticketmaster's recent entry into both the Taiwan and Singapore markets highlights this international expansion opportunity, building on our concerts position in these markets, and growing our ticketing presence to seven countries in Asia as we continue to build out our flywheel across more of our markets.

In North America, our top priority in 2019 was deploying Presence, our secure digital ticketing product, which we see as key in differentiating Ticketmaster and providing venues, teams and artists with the information and tools to maximize their fan relationships. Presence was deployed in over 700 venues by the end of 2019, including over 90% of major sports and Live Nation buildings, operating 50,000 events for over 120 million fans, more than half of whom used digital tickets for entry. We see our deployment in 2020 further accelerating, and we are planning to have Presence in over 1,300 venues by the end of this year, with over 200 million fans expected to attend events at these buildings. At that point, we will cover 100% of major sports and Live Nation buildings, and 90% of all fans in North America Ticketmaster venues, making Ticketmaster by far the global leader in digital ticketing.

Artist-driven initiatives, such as ticketing Pearl Jam's entire tour with SafeTix, enabling their strategy of getting tickets into the hands of their greatest fans, is one demonstration of how digital ticketing is serving content more effectively. At the same time, we continue to scale our global ticketing marketplace, with the fourth quarter being our second-highest fee-bearing GTV quarter ever, selling over 60 million fee-bearing tickets and delivering over $5 billion in fee-bearing GTV.

Ticketmaster continues to lead the ticketing industry, both operationally and in digital ticketing. Looking at 2020, I am confident in Ticketmaster's ability to extend that leadership position globally as we add more customers, ticket more events and expand our digital ticketing footprint.

2020 Outlook

In summary, 2019 was another strong year for Live Nation - building our global concerts business and driving growth in our high-margin venue, sponsorship and ticketing businesses.

Looking at 2020, we believe that our double-digit fan and show count growth so far this year against a backdrop of very high artist activity across all venue types and markets sets up our flywheel to deliver another year of strong global growth.

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