August 18, 2022
Live Nation Postponing All Concerts Indefinitely — Stock Plunge Continues

Live Nation has taken several steps to enhance its liquidity and ability to overcome the financial difficulties of the COVID-19 coronavirus pandemic, including securing an emergency $120 million loan, cutting costs, and, on the part of CEO Michael Rapino, foregoing a base salary altogether.

Live Nation described each of its COVID-19 coping strategies in a recent Securities and Exchange Commission (SEC) filing.  As part of an amended credit agreement with an existing lender, Live Nation has gained $120 million in additional debt-spending capacity; if so obliged, Live Nation can boost the credit line to $150 million, provided that the process is initiated before May 9th.

Factoring for this new sum, the leading concert promotion giant has $940 million in available credit and roughly $1.84 billion in total liquid capital, after accounting for $914 million in free cash. This substantial liquidity may enable Live Nation to more easily weather COVID-19-related fiscal troubles and operational concerns, compared to other concert organizers.

It’s also worth noting that the company has $2 billion more on the books as deferred revenue (expected income for services or products that will be delivered in the future). Still, traditionally, these funds are considered assets only after the corresponding work is performed.

To help his company through the coronavirus pandemic, CEO Michael Rapino has temporarily ceased drawing his $3 million annual base salary (though historically, the stock has comprised the lion’s share of CEO Rapino’s multimillion-dollar compensation).

Finally, Live Nation indicated that it would explore cost-cutting measures, including rent renegotiations, hiring freezes, furloughs, and more. The company hasn’t yet made cuts to any of its approximately 9,000 employees in response to the coronavirus crisis.

Live Nation has postponed each of its upcoming concerts because of the coronavirus pandemic.  Last week, we reported that the live industry sphere could experience losses of nearly $9 billion if shows are unable to resume in 2020.  It all depends upon when event promoters can continue normal operations, a question that remains unanswered.

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