Music superstars BTS and Harry Styles are hitting the road this fall, while The Weeknd and Billie Eilish have concerts planned for 2022. Live music is back — and that’s great news for Live Nation (LYV).
Shares of Live Nation, a concert promoter, venue operator and the owner of Ticketmaster, are up nearly 40% this year and trading near an all-time high.
The company is still expected to post a loss for 2021. But investors are likely already looking ahead to next year, when the concert business should be mostly back to normal.
Indeed, Live Nation said in its latest earnings release in August that the pipeline of shows for 2022 is up double digits from pre-pandemic levels in 2019 — and that many major acts have decided to extend current tours into 2023 and 2024 to meet pent-up demand.
“The momentum for the return to live events has been building every month,” Live Nation said in a press release, “with ticket sales and concert attendance pacing faster than expected, underscoring the strength and resiliency of the concert business and live events in general.”
Analysts are forecasting that Live Nation will report nearly $5 billion in revenue this year, a 165% jump from 2020. And for next year, they expect the company will return to profitability and post sales of $12.6 billion.
It’s great news for the company and also a vindication of the strategy by billionaire investor John Malone, whose company Liberty Media (FWONA), owns a more than 30% stake in Live Nation.
Liberty also has a 78% position in satellite radio giant and Pandora streaming service owner Sirius XM (SIRI). The company also launched a blank check special purpose acquisition company (SPAC) named Liberty Media Acquisition Corp earlier this year that may target deals in the music business.
Malone has made a big bet on the music industry, and live events in particular. And it’s paying off. Liberty’s stock for Sirius XM (LSXMK), which tracks the performance of the satellite service as well as Liberty’s ownership stake in Live Nation, is up more than 12% this year.
Liberty has also tried over the years to take control of radio company iHeartMedia (IHRT), whose shares have soared nearly 70% so far in 2021. (Liberty has owned a small stake in the company’s class-A shares in the past.)
It’s increasingly clear that even though many music fans enjoy subscription services from Spotify (SPOT) or Apple (AAPL), traditional radio isn’t dead. So it’s possible Liberty will try to make another run at iHeartMedia.
Meanwhile, Live Nation, which was not immediately available to comment for this story, may have to tread carefully if it doesn’t want to come under more scrutiny from lawmakers and regulators in Washington.
Some members of Congress have been going after Live Nation for the past few years, arguing that it has a monopoly on all aspects of the concert business.
“We write in support of strong antitrust enforcement by the Biden Administration, including the live event ticket sales marketplace,” said five Democratic House members in an April letter to Attorney General Merrick Garland and the Federal Trade Commission.
“The evidence is overwhelming that the 2010 merger between the world’s largest concert promoter, Live Nation, and the biggest ticket provider, Ticketmaster, has strangled competition in live entertainment ticketing and harmed consumers and must be revisited,” the legislators added.
Live Nation’s surging stock shows investors aren’t too concerned about a crackdown: Shares are up nearly 275% in the past five years.
