Good afternoon. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to Live Nation’s Third Quarter 2023 Earnings Call. And I would now like to turn the call over to Amy Yong, Head of Investor Relations. You may begin your conference.

Good afternoon. And welcome to the Live Nation third quarter 2023 earnings conference call. Joining us today is our President and CEO, Michael Rapino; and our President and CFO, Joe Berchtold. We will start with prepared remarks from Michael and then we will take your questions. Before we begin, we would like to remind you that this afternoon’s call will contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company’s anticipated financial performance, business prospects, new developments and similar matters. Please refer to Live Nation’s SEC filings, including the risk factors and cautionary statements included in our most recent filings on Forms 10-K, 10-Q and 8-K for a description of risks and uncertainties that could impact the actual results. Live Nation will also refer to some non-GAAP measures on this call. In accordance with the SEC Regulation G, Live Nation have provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in the earnings release or website supplement, which also contains other financial or statistical information to be discussed on this call. The release reconciliation and website supplement can be found under the Financial Information section on Live Nation’s website. And with that, I will now turn it over to our President and CEO, Michael Rapino.

Thank you for joining us. As you can see from our results, the structural tailwinds behind our business are accelerating faster than ever and as a fan demand truly globalizes and artist were able throw more broadly than ever, this is still in an unprecedented global desire for concerts. This is happening at all levels with both casual and diehard fans and from small clubs to massive stadium events. We will start the conversation today in the next week a deeper into our results how these trends are setting up the industry for ongoing growth. Joe, anything to add.

Thanks, Michael, and good afternoon, everyone. Only thing for me to add is that given the investor presentations next week we’ll keep today’s call more brief than usual. So, with that, I will -- I think, we’re ready to take questions. Operator?

Thank you. [Operator Instructions] And the first question comes from the line of Brandon Ross with LightShed Partners. Please proceed with your question.

Hey. Thanks. Just to start-off, since you guys last reported there’s been at least two major articles on the DOJ investigation into your company, as well as some movements in both the legislative and executive branches and industry-wide regulation. Can you just give us an update on what you know about the Justice investigation and then separately, the potential impact of the proposed Congressional legislation? Then I have a follow-up.

Sure. Thanks, Brandon. I’ll start first of all just on the legislative, which I think is pretty straightforward. Right now there is an all-in pricing bill by Senators Cantwell and Cruz under consideration. We are fully supportive of there’s a BOTS Act that Senator Blackburn introduced, I mean, you call main, which we’re also fully supportive of, and in general, everything we’re hearing legislatively are things that I think are pretty consistent with what we outlined in the FAIR Ticketing Act and things that we would definitely be supportive of. On the DOJ and the article that came out yesterday. I think, not surprisingly, it’s our impression that the DOJ is taking at least the first level look at almost everything that our competitors complain about and from there they look further at some issues and not others and if they tell us they have a problem with something we talked to them about it. But, let me emphasize this, as far as we can tell nobody thinks that the fundamentals that drive our promotions business are unlawful. We pay top dollar to artists and provide them with top-notch tour support and those are good things. I think the article also seems to reinforce that the investigations looking at specific business practices versus our overall business model, which as I’ve said previously, is my impression-based on what I’ve heard. On the specifics, I mean, recall on the agencies getting document retention letters. I think generally anyone the DOJ’s six documents from gets the cover letter like this saying they should retain documents related to the investigation. So all this tells us is they think the agencies have relevant information, which seems pretty obvious given the topics that are being discussed and competitors complain about. Finally, we obviously find it interesting, as I think, you tweeted that the timing of this always seems to come up at earnings. We don’t think there’s any real news right now. Concerning the investigation, we’re completing our document production that they’ve asked for. We haven’t even started depositions and our impression is that the investigation is kind of in its mid-stages at this point. And yeah, we have another new story on the day before earnings which we don’t seem to think a coincidence.

Okay. And getting to the business, your forward-looking metrics and especially the Q3 ticketing results point to real continued strength for your business. But there’s a lot of trepidation now about consumer weakness, especially after some weak guidance from others in the experienced economy. I know Bookings just said, some negative things just now. Is there anything in real-time that you’re seeing at all to suggest fall-off in trends at Ticketmaster. I know like the arenas of the world will continue to sell, but are the Tuesday’s in Pittsburgh still holding up and like really especially for Ticketmaster, as you look forward?

Sure. We’re seeing no issues. Let me give you that in the two piece. I think you asked about, first of all, Q3 and then call it October. So Q3 was very strong volume quarter. So it was really driven by ticket volume $90 million fee-bearing tickets that we sold in the quarter, which --and the growth came from both North America and internationally. So we’re seeing that the demand consistent globally. 90% of the growth came from Concerts, which again tells you that the fans are looking to go to the Concerts. The one thing, I would note on Q3 is just a reminder, the last year, we had an unusual concentration of client renewal expenses, which are normally spread out over the second half, but largely came together last year. But really the quarter was about the tremendous volume and tremendous fan demand that flowed through Ticketmaster. Looking then more specifically at just October. If we looked at our Ticketmaster platform for the month of October, ticket sales were again up year-on year relative to last year. They were up double digits in North America. So we’re seeing no sign of weaknesses. Another metric that we look at is as we look at just for our U.S. Concerts division we track every week, year-on year sales and again over the past five weeks since the end of the quarter, those sales continue to be up double digits. So we’re seeing no weakness at all. We gave you the leading indicators for show commitments for next year and we’ll get into a more, but feeling good about everything that we’re putting on-sale.

Thank you.

And Brandon just for more color. Yes.

Yeah.

I have weekly booking calls with over the 40 Presidents around the world. When we talk both from clubs to stadiums and festivals. And we have not seen anything taper off in any sense or on-sales for next year, whether it’s an early festival across the pond or was there, let’s say, a festival -- a club tour playing in Pittsburgh on a Tuesday, as you say, or maybe the blink-182 who toured last year, now is back on tour again this year playing Pittsburgh just to Cleveland on Wednesday and any pullback in any way from a club to a stadium tour from Malan to Argentina right now. The consumer supply-demand seems to be consistent across the globe small to big.

Thanks very much.

And the next question comes from the line of Stephen Laszczyk with Goldman Sachs. Please proceed with your question.

Great. Thank you. Joe, there has been a lot of focus on how the Concert segment profitability would shake out this quarter and just given the mix shift towards stadium shows in the slate this year and maybe offsetting that some dynamics around having a more matched revenue and expense structure compared to last year. I was hoping you could help us unpack some of those dynamics and maybe size some of those factors. Just as we think about Concerts profitability this quarter, I think, it would be helpful to contextualize this year and then look forward to next year?

Sure. I think, let me start by just noting that, year-to-date our Concert margins are up year-on year and for the full year, I expect margin expansion of at least 50 basis points relative to last year, so making good progress verging on halfway back towards the 2019 levels and that’s despite growth for the overall year that will be definitely skewed to third-party venues driven heavily by stadiums. If we look at the quarter. I think if we look at Q3, about 47% of our fans were in arenas or stadiums, which is pretty good proxy for third-party buildings. The comparable last year for that number was 42%. So we had a lot more fans mix in arenas or stadiums this year. Those two buildings accounted for about 75% of the 7.5 million fans that we added in the quarter. And that does two things, as we’ve talked about in the past. It drives our AOI up, because we’re making money on these fans and negatively impacts margins. So that’s why you’ll see the quarter-to-quarter fluctuations. We don’t worry a lot about, but I think, if you take the overall combination of high growth and third-party buildings shifts the mix towards more third-party buildings and make substantial progress in our margins for the full year, I think we’re pretty happy as we look at the totality of that.

Great. Thanks for that. And then maybe one for Michael. You’re coming up on lapping the launch of two fairly significant tours in Taylor Swift and Beyonce. I think there’s some concern that those tours will be hard to replicate as we look ahead to next year. I was wondering if you could talk a little bit more about how impactful these tours worry to your business this current year and maybe looking ahead how the slate for 2024 is shaping up and you sort of the opportunity to compensate for some of the notable tours year-over-year? Thank you.

Yeah. Thank you. Well, I’m sorry, I’ve seen this written, but we didn’t promote the Taylor tour. So I don’t have that comparable to worry about in 2024. Beyonce was our tour wildly successful. But when we look at any artist across Ticketmaster Live Nation, no artists is going to account for more than 1% of the tickets. So no one tour will ever hurt us year-over-year, it’s about our macro portfolio of artists and tours. And we have a very good pipe as we’ve been saying for next year. We think next year -- crazy to say, but sitting here looking at this year that we’re looking at double-digit growth over this year, next year on ticket sales and our stadiums are gaining a lot of steam. So we’re very confident. We’re going to have big record-breaking tours on the road next year as Bad Bunny just went up again and more to come announced -- more to be announced. So we are very confident that well Ticketmaster Live Nation are going to have big strong years next year with a pipe full that we will overcome this year’s numbers.

Thank you.

And the next question comes from the line of David Karnovsky with JPMorgan. Please proceed with your question.

Hey. Thank you. Maybe following-up on ticketing. It looks like your revenue growth well outpaced GTV growth, so interested to understand how non-service fee revenue might have helped in the quarter? And then, Michael, I don’t know if you can say anything on the Mastercard agreement to today -- from today and I don’t know, what other opportunities you see for sponsorship deals to kind of cover your international footprint?

Yeah. Sure. I’ll start just on the ticketing. Absolutely, Ticketmaster continues to benefit from the non-service fee revenue sources it has. On the upsells and other services that itself to fans, as well as increasing array of services that it’s providing to venues and promoters are all good sources that are helping us increase the profitability per ticket that we’re selling.

And Mastercard, we’re thrilled to have him onboard. We’ve been working over the last couple of years to have a great diversity across our partners on the payment side. Thankfully, we didn’t take any of the easy crypto money at the time. We worked hard to make sure we had a stable of great partners. Today looking at Citibank, PayPal and now Mastercard for international rounds out our global portfolio in that category at an overall economics surpassing we historically had. So very, very happy to have them onboard, big part of our business and continue to show strong growth in our sponsorship side and sponsors lined-up to be part of this Live boom.

Thanks.

And the next question comes from the line of Ashton Welles with Evercore ISI. Please proceed with your question.

Thank you. I think you guys are on track to add 6 million fans or so this year at your owned and operated venues. Is this sort of the right run rate to think about going forward or could this step up in coming years?

This is an area that we’re absolutely focused on continuing to add venues. So the hope is that we continue to build on that number. I think it will probably not be linear year-to-year as we add to our portfolio, but it’s an area that we’re very focused on building as that tends to be our highest profit, highest margin fan that we serve.

And the next question comes from the line of David Joyce with Seaport Research. Please proceed with your question.

Thank you. A couple of related questions, the ticketing revenue particularly blew away our estimate. So I was wondering how much of that is for 2023 events and how much for 2024, and then similarly with deferred revenue being up 39%. I know that some of that is due to the function of when the shows go on sales. That’s not an indicator of what the revenue growth would be. But how much of that would be due to venue mix or the tour type for 2023 shows versus 2024. In other words, how do we use these metrics on an apples-to-apples basis to help with our outlook for 2024? Thanks.

Sure. So, first of all, at this point, through Q3, we’ve not sold a ton of tickets for 2024. That’s why we focus more on what the show bookings are. So we have sold -- and we sold more tickets this year, which is part of what goes into the deferred revenue, I will come back to you. But we’ve sold on the order of I think 18 million tickets for shows next year. So relatively small portion of what we’re ultimately sell. So that’s not the driver of our Ticketmaster results for Q3. To a very great extent, it’s more of the other factors that I talked about. And then, deferred revenue is up, because, yes, we have sold more tickets for the shows next year. We’ve also sold more tickets for the shows that are occurring in Q4 and it’s our expectation that because of that pipeline and because as Michael noted, it’s turned into a pretty solid period for stadiums, as well as arenas. We expect to see that deferred revenue number continuing to grow for the next seven months, eight months.

Understood. I appreciate it.

Ladies and gentlemen, at this time, we have reached the end of the question-and-answer session. I would like to turn the floor back over to Michael for any closing comments.

Thank you, everyone. We look forward to seeing you in New York next week, we’re excited about where we are as an industry and we look-forward to taking you through details next Thursday. Thank you.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.