Live Nation Year-End Operating Income, Revenue, Cash Flow Up, Net Loss At $91 Million
February 26, 2015 at 2:33 PM (PT)
LIVE NATION's 2014 year-end financial results show adjusted operating income up 10% to $555 million, revenue up 6% to $6.9 billion, and free cash flow up 9% to $327 million. After non-cash charges, LIVE NATION shareholders were still hit with a net loss of $91 million, compared with a loss of $43.4 million in 2013 and a Q4 loss of $186.5 million. Year-end normalized operating income was up 7% to $161 million, including non-cash charges, leaving operating income at $7 million for 2014. Normalized net income was $22 million, while free cash flow up 9% to $327 million.
Technology continues to transform ticketing as ticket sales continue their rapid shift to mobile, with 35% growth in 2014 to 18% of total ticket sales, leading to higher fan engagement, conversion and a better purchase flow.
LIVE NATION concert revenue rose 5% to $4.73 billion, promoting 22 of the Top 25 global tours, expanding their worldwide footprint in the PHILIPPINES, THAILAND, TAIWAN and INDONESIA, while also building its portfolio of marquee NORTH AMERICA festival assets with the acquisition of AUSTIN CITY LIMITSD and LOLLAPALOOZA festivals and brands.
The ARTIST NATION management business grew AOI by 50%, including U2, MADONNA, LADY GAGA, MILEY CIRUS, BRITNEY SPEARS, NICKI MINAJ, LIL WAYNE and ALICIA KEYS as these artists chose to tour with LIVE NATION for over 700 shows in 2014, more than double the number in 2012.
Both sponsorhips and advertising continue double-digit growth, with a 10% increase in AOI for the year in its highest-margin business at over 70% of revenue. As part of this, online advertising AOI grew even faster, at 15%. Fan network traffic increased by 17%, for a total of over one billion visitors throughout the year. LIVE NATION also monetized its content through a deal with YAHOO! to distribute a streaming concert every day, which has driven increased interest by advertisers to its online platform, spurring the growing profitability of the business. A deal with VICE is also driving advertising with high quality live music-related video offerings that will continue to expand and drive advertising growth, along with new stragetic sponsors such as PEPSI, HILTON and SAP, among the approximately 60 companies that pay over $1 million each year for sponsorship and advertising, accounting for over $200 million in spending, along with an additional 700 companies that also advertise on the platform, generating a collective $300 million in revenue.
TICKETMASTER's new products helped drive a 7% increase in the gross transaction value of primary tickets to $23 billion, and a 55% increase in secondary gross transaction value, with over $1 billion since its launch in the fall of 2013. The number of events activated in 2014 increased 500% to 10,000 integrated events listed on TICKETMASTER. Secondary growth for concerts showed a 350% year-on-year GTV increase. TICKETMASTER enjoyed the second biggest day in its over 30-year history last FRIDAY, selling over one million tickets.
"We are confident that our business model, and its scale, provide ongoing growth potential," commented President/CEO MICHAEL RAPINO. "There remain continued opportunities to consolidate the global concerts business, and we will use that scale to drive fan monetization, advertising and ticketing. Since 2012 we have grown revenue by 18%, AOI by 20% and cash flow by 31%. Looking forward, we see this growth as sustainable and repeatable given the breadth of levers and trends currently working for us."