Live Nation Entertainment, Inc. Announces its Business Response to the 2019-20 Coronavirus Pandemic


(Los Angeles, CA) Live Nation Entertainment, Inc., since being founded in 2010, does the following.  The aforementioned business promotes, operates and manages event ticket sales for live entertainment.  The previously said; is for the United States of America, and, for foreign countries around the world.  As part of its business model, Live Nation Entertainment, Inc. owns and operates entertainment venues.  Additionally, it also manages a music artist’s career.  However, recent times have not been easy times, for the aforementioned business.  In fact, the 2019-20 Coronavirus Pandemic hit hard.  The hard hit is due to the fact that, the event stoppage of the middle of March 2020 canceled, or, postponed entertainment events.  On the schedule for Live Nation Entertainment, Inc., at the time of the stoppage, were more than 45 million sold event tickets.  Interestingly, these sold event tickets represented a reduction of 2% in sales, compared to the previous year.  Additionally, these sold event tickets did not take into account, approximately 3.1 million additional event tickets.  The latter, were for canceled or re-scheduled shows, well into the year 2021.  Recently, Live Nation Entertainment, Inc. announced that, it now has a business response to the 2019-20 Coronavirus Pandemic.  Specifically, the aforementioned business revealed that, it has completed the following response measures.  The completed response measures are an amendment to an existing credit agreement, a new revolving credit facility, cost reduction efforts and cash money management efforts.  The cumulative effect of the previous is how; Live Nation Entertainment, Inc. expects to survive the 2019-20 Coronavirus Pandemic.
            Survival efforts for the 2019-20 Coronavirus Pandemic, according to Live Nation Entertainment, Inc., are now part of the business model.  Briefly; the aforementioned business is reporting an amended debt covenant, $120 million USD raised as part of an additional revolver capacity and $3.8 billion USD in total liquidity.  However and returning to, March 2020’s event stoppage, the aforementioned event impacted approximately 8,000 entertainment events.  These 8,000 entertainment events, accounted for approximately 15 million sold event tickets.  Interestingly, 7,000 entertainment events were immediately postponed.  These postponed entertainment events, accounted for approximately 14 million event tickets, and, a percentage of 90%.  The remaining 10% of the entertainment events were canceled.  These canceled entertainment events, accounted for approximately 1.6 million event tickets.  The impact on the business is a loss, for the first business quarter of the year 2020.  Additionally, the impact on the business is a drop in the adjusted operating income (A.O.I.).  Overall, Live Nation Entertainment, Inc. is reporting a 20% decrease, for the first business quarter 2020.
            Continuing with, the business impact of March 2020’s event stoppage, the aforementioned phenomenon created uncertainty.  Additionally, this type of uncertainty required several initiatives.  The goal of the initiatives included reducing fixed costs, and, conserving cash money.  The reduction of fixed costs included the implementation of salary reductions overall, executive level salaries being reduced by up to 50% and the chief executive officer forgoing 100% of his or her salary.  The latter, is also being called, the salary reduction program.  The salary reduction program is planned to have a life span, and, salaries will return to normal when the salary reduction program ends.  The conservation of cash money included a hiring freeze, a reduction in outside contractor use, a rent re-negotiation effort, furloughs, a reduction in business expenditures and the elimination of other types of discretionary spending.  Examples of other types of discretionary spending include travel, entertainment, repairs, maintenance and marketing.  Overall, Live Nation Entertainment, Inc. is targeting approximately $500 million USD in cost reductions, for the remainder of the year 2020.  Additionally, this business is also targeting approximately $800 million USD in cost reductions, for the year 2021.  Live Nation Entertainment, Inc. did report that; it plans to receive payroll support, which is provided for under the Employee Retention Credit that is part of the 2020 Coronavirus Aid, Relief and Economic Security (C.A.R.E.S.) Act.
            Returning to; Live Nation’s response measures, the aforementioned and as previously said, are the following.  The completed response measures are an amendment to an existing credit agreement, a new revolving credit facility, cost reduction efforts and cash money management efforts.  However, what highlights everything is Live Nation’s new revolving credit facility.  Live Nation’s new incremental revolving credit facility is as follows.  $120 million USD is now established, this means that, Live Nation’s undrawn debt capacity has been extended.  Due to the previously said, $940 million USD is the new available debt capacity.  The $940 million dollar debt capacity breaks down in the following way; $400 million USD in undrawn term loan A capacity, and, $540 million in revolver capacity.  As part of this announcement, Live Nation Entertainment, Inc. revealed the following.  As of February 29th, 2020, the total cash and cash equivalents balance was, $3.3 billion USD.  This amount breaks down in the following way; $914 million USD of free cash money, and, $2.0 billion USD of event related deferred revenue.  The previously said, and when it is combined with, the new revolving credit facility ($940 million) results in $3.8 billion USD in total liquidity. 

Live Nation’s Reconciliation of Free Cash
to Cash and Cash Equivalents
($ in millions)
      February 29, 2020
    Cash and cash equivalents
$3,266.7
Client cash
(764.4)
    Deferred revenue — event-related
(2,015.1)
Accrued artist fees
(66.8)
Collections on behalf of others
(49.4)
Prepaid expenses — event-related
543.4
    Free cash                                                                          
$914.4

            To end, Live Nation Entertainment, Inc. (NYSE:  LYV) did release a press statement.  Michael Rapino is the President and the Chief Executive Officer of Live Nation Entertainment, Inc.  Through a press statement, Mr. Rapino said the following.  “The live entertainment industry has delivered incredible global growth for over 20 years, which speaks to the great passion and resilience of fan demand.  With this additional liquidity, the flexibility in our debt covenants, and cost-cutting efforts, we believe that Live Nation has the financial strength to weather this difficult time.  We will be ready to ramp back up quickly and once again connect audiences to artists at the concerts they are looking forward to.”  As previously stated, Live Nation Entertainment, Inc. recently announced that, it now has a business response to the 2019-20 Coronavirus Pandemic.  Specifically, the aforementioned business revealed that, it has completed the following response measures.  The completed response measures are an amendment to an existing credit agreement, a new revolving credit facility, cost reduction efforts and cash money management efforts.  The cumulative effect of the previous is how; Live Nation Entertainment, Inc. expects to survive the 2019-20 Coronavirus Pandemic.  Lastly and briefly; the aforementioned business is reporting an amended debt covenant, $120 million USD raised as part of an additional revolver capacity and $3.8 billion USD in total liquidity. 

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Written from Press Release
Registered Writer with
PR Newswire Association, LLC
R-Berumen28
04/17/2020


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