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