Michael Rapino talks superfans, the secondary ticket market and more on Live Nation’s Q3 earnings call

On By Littum

Live Nation’s leadership team has observed a noticeable difference between sports fans and music fans when it comes to buying tickets, and CEO Michael Rapino summed this up nicely on the company’s third quarter earnings call.

“We’re always kind of amused that sports is kind of a badge of honor — how expensive the tickets (are) — but music, which is much lower than sports, seems to get more of that emotional response,” Rapino told analysts at Monday (November 11).

That price difference has existed for some time. Courtside tickets to an LA Lakers game that runs between 200 USD and $600 each, while around three-quarters of the concert tickets sold by Ticketmaster are lost $100according to a comment Rapino made on a Goldman Sachs conference earlier this year.

Yet it has generally been music audiences who have complained about prices where Ticketmaster has felt the blowback, as in the case of expensive tickets for Bruce Springsteen’s 2023 tour, or more recently complaints about rising ticket prices for Oasis’ 2025 UK tour.

Fans angry at seeing Oasis tickets increase in price in real time – the result of Ticketmaster’s “dynamic pricing model”, which responds to demand – criticized the ticket company online, sparking an investigation into dynamic pricing by the UK Competition and Markets Authority.

“We’re always kind of amused that sports is kind of a badge of honor — how expensive those tickets (are) — but music, which is much lower than sports, seems to get more of that emotional response.”

Michael Rapino, Live Nation

Apparently stung by the criticism, Oasis announced that they would not be using dynamic pricing in sales for the North American leg of their tour.

Live Nation has previously argued that dynamic pricing is a way to cut into the secondary ticket market (i.e. scalpers and dealers) who take advantage of high demand for shows without actually investing anything in making those shows happen.

Rapino has previously argued that dynamic pricing allows artists to capture more of the income from fans willing to pay, rather than having the money go to secondary sellers.

On the earnings call Monday, Rapino reiterated Live Nation’s hopes for stricter regulation of the secondary ticket market, particularly because “America seems to be a market where secondary is free to ride.”

Rapino said he would like stronger regulation to crack down on the bots used by retailers to buy large numbers of tickets from ordinary consumers, as well as speculative sales – the practice of secondary sellers offering tickets they themselves have yet to sell. have not purchased.

“We hope that over time, better regulations will be put in place to help the consumer,” Rapino said.

Rapino’s comments came as the company reported stronger-than-expected profits for the quarter ended Sept. 30, at USD 1.66 share, versus Wall Street estimates of $1.59.

However, the company’s revenue took a hit in the quarter and fell 6% year/year to 7.65 billion dollars. That was largely due to weakness at stadiums this summer, an issue Live Nation flagged in earlier earnings calls. The company says it’s headed for another strong stadium year in 2025, which Live Nation expects will be more like 2023, the year of blockbuster tours from Taylor Swift, Bruce Springsteenand others.

Here are three other things we learned on Live Nation’s latest earnings call:

1. Live Nation is ‘hopeful’ about its antitrust fight under a Trump administration

Live Nation is “hopeful” that the incoming Trump administration will go easy on the company in its ongoing fight against a government antitrust lawsuit.

The US Department of Justice sued Live Nation last May, alleging “monopolization and other unlawful conduct that impedes competition in markets across the live entertainment industry.” The DoJ is seeking a dissolution of Live Nation and its ticketing arm, Ticketmaster. The attorneys general of 39 US states and the District of Columbia have joined the lawsuit.

Asked by an analyst whether a Donald Trump presidency “will be a very good thing for you,” Live Nation’s president and chief financial officer Joe Berchtold said the company is “hesitant” to say much on the issue since “it’s still very early in the transition process.”

Still, the company is “hopeful that we will see a return to the more traditional antitrust approach, where agencies have generally tried to find ways to solve problems they see with targeted solutions that minimize government intervention in the marketplace.”

“Targeted remedies” are generally solutions to anticompetitive practices that are incapable of breaking up a business. One such targeting measure was introduced in 2010 as a condition of the government’s approval of Live Nation’s acquisition of Ticketmaster.

It prohibited Live Nation from doing things like “going after” concert venues for using other ticketing companies or threatening venues. That agreement was set to expire in 2020, but was extended for another five years after the DoJ concluded that Live Nation had violated some aspects of the agreement.

This year’s lawsuit goes much further, asking a federal court to order Live Nation to divest Ticketmaster, a move Live Nation strongly opposed even before the lawsuit was filed. The company has repeatedly argued that the things consumers and politicians are frustrated about are out of Ticketmaster’s hands. The company has said, among other things, that the prices are set by artists and sports teams, and not Ticketmaster.

The lawsuit “accuses Live Nation and Ticketmaster of high service fees, but ignores that Ticketmaster only keeps a modest portion of those fees. In fact, primary ticketing is one of the cheapest digital distributions in the economy,” Live Nation said in a response to the lawsuit.

On the company’s third-quarter earnings call Monday (Nov. 11), Berchtold said the lawsuit reflects a “much more interventionist philosophy today than you would expect from a Republican administration.”

He added that Live Nation will be ready to “engage” with the new administration as soon as the administration itself is ready.

“They have to get through the deals and get things settled on their end, but we certainly hope that we can start engaging with them early next year,” Berchtold said.

2. Live Nation predicts that 20% of concert capacity will eventually go to superfans

Many music companies are talking the talk these days when it comes to better monetizing superfans, but Live Nation claims they’ve been on the road for a long time.

“We’ve been selling to the super fan for a while,” Rapino said, noting that at Live Nation, this segment of customers willing to pay for a better experience is called the “premium fan.”

“It’s kind of been an ongoing skill set that we’ve had forever,” Rapino said.

And he believes there is much more that can be done to expand superfans’ market share of live events. He noted that many of the renovations at Live Nation-owned venues include an increase in the proportion of VIP seats. Rapino believes he can expand the premium segment of concert tickets to 20% of all sales.

“We always sell out of the boxes, sell out of the premium inventory first. We never have a problem selling it,” he says.

“It’s a big part of our CapEx and our (renovation of venues) as well as our new buildings when we build them. We start with this mandate that they have a certain higher percentage of premium seats and lounges and experiences. So those venues start with a much better return.”

3. ‘Ticketmaster is a technology company’

One of the arguments put forward by the US Department of Justice in its antitrust case against Live Nation/Ticketmaster is that the tie-up of these two companies means that “music fans in the United States are deprived of ticketing innovation and forced to use outdated technology while paying more for tickets than fans in other countries.”

Live Nation couldn’t see it more differently. In fact, company management has argued that Ticketmaster became the dominant player in ticketing by developing better technologies than competitors. Thanks to that technology, Ticketmaster is able to “sell tickets at a volume that others haven’t been able to handle,” Rapino said on the earnings call.

He may have been referring to recent ticket sales for Oasis’ world tour next year, which Rapino described last month as “the biggest sale in history” with “the biggest demand in history.”

“Ticketmaster is a technology company. So (we will) continue to develop products on both an enterprise and marketplace basis.”

Michael Rapino, Live Nation

At a recent Bloomberg conference, Rapino said Oasis ticket sales were hit by “multi billion” bots trying to capture tickets for the secondary market.

“We have the best platform in the world. It’s very difficult when you have 10 billion bots hitting your system at (the start of the sale) to steal your tickets… I’m so glad the system didn’t crash. We stopped them. We got it done.”

On the earnings call Monday, Rapino said investments in Ticketmaster’s technology — both on the back end and on the consumer-facing side — will continue.

“We spend tens of millions of dollars of capital on Ticketmaster,” he said. “We continue to innovate the products that we offer – on the enterprise side – to our venues, to promoters, others who use the platform… it’s included a lot around pricing technology to help everyone understand the market value of that content , they deliver.

“It’s certainly on the marketing side as well, developing great marketing science capabilities to help people market their shows, big investments over the last few years to continue to improve our ability to handle the huge demand on sales.”

He added: “Ticketmaster is a technology company. So (we will) continue to develop products on both an enterprise and marketplace basis.”Music business worldwide