Live Nation Entertainment, Inc. (LYV) Earnings Call Transcript & Summary

Right. Hello, everybody. Hopefully, we're coming through loud and clear. This is Todd Juenger from Bernstein. Most of you -- hopefully, most of you or all of you know me, you may not recognize me. If you see me during COVID, I've tried to clean myself up a little bit today. So I look a little different. I pulled my hair back. I got this coat out of the closet, barely recognize myself, and it doesn't feel natural, but I did this because I get the chance to talk with Michael Rapino today, present CEO of Live Nation, what a perfect time for this conversation. We're so grateful that you took the time, Michael, to join us. [Operator Instructions] And with that, we'll get going because we've got a little less than an hour, and a lot to talk about. So again, just a massive thank you, Michael.

Just to get things rolling, I mean, oh my gosh, what a year, right? So live events were probably the first thing to get shut down. They'll be the last thing to open up. You run a live events company. Maybe you can just walk us through -- we want to look forward not in the past, but what's been going on for the past 15 months, what have you taken that time to do? And where does that leave you sort of now as we reenter hopefully a brighter future?

Thank you, Todd. Appreciate it. And like you, I think this is the first collared shirt I have had on in a year. So I know the feeling of getting back to it. I actually still have shorts on. So at least we're still only half right. I mean, yes, what a year? You didn't learn this in school. We were talking last night about that day back in March, where I had 40 global presidents on the line. And that was the day we say the music stop because it was country-by-country shutting down, just unheard of, obviously. So it was -- as I say, not that you wish it on anyone, but I think it was like any great challenge. It's been a gift in the end. I remember talking to John Malone early when it happened. And he said to me, great CEOs can grow companies and revenue, but another level of a CEO can steer the ship through the storm of this magnitude. And it was a real test. I didn't have some of those muscles, haven't thought through that side of the business, we've been so focused on revenue and growth that overnight, me and my CFO, and Joe had to sit here and say, so what is our monthly burn rate with no revenue. We never modeled that one in life. How long can we go? And so yes, it was a couple of months of craziness. I mean it was a couple of months once we could convince the market that, first of all, the consumer was going to gather again, right? There was a bit of a panic at first. And no one's ever going to go out again. We're going to change our lives. And I always remember Memorial Day weekend a year ago when they were showing those pictures of the partiers and the Ozarks. And that was kind of that weekend when we all went, no, the DNA says we're going to gather. We're going to come back, let alone when we get vaccines. So once we could convince everyone that the human behavior hadn't changed, part of gathering around a fireplace or fire pit and music is in our DNA and it will happen for a long time. Then the second part was, what was our balance sheet. How long could we last with no revenue? And to quote another great John Malone line when I was on the phone with him, he said, "How long can you hold your breath?" And that was the matter -- that wouldn't matter, right? And we had to make sure that we had the balance sheet that we got our fixed cost down on a monthly burn rate that we could sit here for 2-plus years, if that was the problem, whether the storm and be ready to bounce back. So I think in many ways, it was a horrible couple of months of body blows, yes. And did we come out better for it? 100%. It gave us the opportunity once we got through the drama of March and April and May on, okay, we're going to be fine, we're going to come back. The part that was the greatest kind of early boost to us was the refund rate. We had built this model going, okay, no one is going to want to go to a show, they're going to need their money back. We're going to have 70% refunds, and we were sitting a couple of months later at 10% refunds, unheard of in this pandemic. So that was always kind of the stimulus that kept us motivated that said, no, these fans, no matter how tough times are, they want to go see Billie Eilish. And they're holding on to these tickets. These tickets are still important moments of escapism that they're going to want to get to. That was probably the silver lining through all of it kept our motivation. And then as we did, it was somewhere in June when I got on a call with my executive team and said, now, listen, we got the greatest gift. We have 6 months where The Street doesn't expect anything. We can step back and do all of those kind of projects and reassessments and organization tweaks that you couldn't do when you're doing 200 shows a day and run in full steam. So we use the back end of the year to do a lot of reevaluating, who was the management team that we needed for the future. You clearly could see an a pandemic like this, who was willing to step up and who wanted to hide, right? So it was a real test of the leadership team. We made some changes, we amalgamated some divisions, we redefined some of our longer-term missions, we sped up some technology projects. So I would say I kind of combined 3 years of what we wanted to get done in a 6-month period that helped us excel where we think we can continue to be a great growth business.

So if you can quote a few John Malonisms. I'll quote what I think are a few Michael Rapinoisms, I think, at least I'm crediting them to you. So a couple of things, I think, I've heard you say is one, I think, I've heard you describe the new company or the companies exist now is Live Nation 3.0. I'd love to know sort of what that means. I've also heard you -- I think, one of my favorite ones is, I think, I heard you described sort of this period as sort of a year-long company off-site, which, I think, goes with the Live Nation 3.0. I mean it sounds to me, if I put those together, to me, that means you sort of reassessed and you're probably coming forward, we know there's some cost savings, $200 million, I guess, permanent cost savings, so a more efficient organization. I suppose also -- maybe you think it's more effectively designed to meet the future challenges. You sort of were going there already. But look, this notion of the year-long off-site and Live Nation 3.0. So what will be different? How is that going to be reflected in your performance, do you think, as you go forward and for investors' financial performance?

Right. Well, it's -- I think, good news is 15 years later, we have a fairly good track record that says we're going to grow the business. And we're going to continually find ways to evolve the Live business. One of the -- I think, the strengths we have is we have a very small to-do list and a big don't-do list. We've been very focused since I launched this company. We believe that this great pie or the TAM of Live on a global basis is still a really big pie that we have a lot of opportunity left in. And there's a lot of ancillary revenue around that Live pie that we still have untapped. So we don't have to pivot, we don't have to jump other ships. We don't have to go buy other companies. We have a big lane down the middle, if you think of a global business. So if you look at Live Nation, when we launched it, we were a pure-play concert promoter. We were a B2B business, as I would have said to the Board back then. And we were stuck in the middle. The artists made a lot of money, and someone was selling our ticket or owned the customer. So I will give us credit that we were very early, probably because of my background and I said to the Board, we had to become a B2C company. No one in Hollywood is a B2C company. We can't survive as a B2B. We'll get squeezed in the middle. The artist will take more and whoever owns a customer will do well. So that was my first big pivot, if you want to call a pivot, extension of owning the ticket, right? I didn't know I was going to buy Ticketmaster at time. I was obsessed with being in the ticketing, owning my customer data and we left Ticketmaster, which was a huge move at the time. I remind people, Ticketmaster was 80% of my EBITDA back then. We decided we were going to have to leave to own our own data if we couldn't figure out a deal with Ticketmaster given our volume. So when we bought Ticketmaster, merged back in the day, that was our first real big Live Nation 2.0, if you want to call, right? That was -- we became a consumer company. We now had hundreds of millions of tickets that consumers bought directly from us. But I always knew that we were going to be a little ways away from getting the Ticketmaster technology and a lot of the challenges that had fixed. We had a lot of plumbing to get done. So we've done -- we've spent a lot of time on that. I took take Ticketmaster over. I remind people, it was a green screen, closed platform. Today, if you look at Ticketmaster, we did 2 big pivots that were very important. We went mobile, which was not easy for every desktop. And we also opened the platform. So we allowed secondary. We allowed other people to list and post on our site. We now allocate out to other sites, we put tickets in other places. So we opened up the platform, which was really the reason Ticketmaster went from a 5-year decline, when I took it over, to a 5-year record earnings. So that was last -- and that's kind of been the last 5 years, get that platform right, invest in the technology, open up some of the strategies, think about it globally. But one of the pieces we didn't really spend the time on was the consumer part of what I just said, the B2C part. We never really unlock what does the Live Nation brand mean to customer. Our website, our app, have really been a me-too Ticketmaster site. They don't add a lot of value. We haven't unlocked the potential there. I mean, coincidentally, today, we just announced, I hired a new Chief Brand Officer from Pepsi. She's heading up our division which is all about our brand consumer products. VIP is being a small example of that we bought, where we're direct-to-consumer with a streaming proposition. But I would say we have a host of great ideas and products that we have excelled around what we could launch from the consumer perspective from memberships to subscriptions to -- even our liquid death idea, we just -- we launched with the liquid death. That's a perfect example where we would have historically just put a plastic bottle distribution deal in our venues. This case, we said, listen, let's use our distribution power. Let's find a younger company. Let's have a sizable equity position, own that business and distribute it and monetize not just the sale of the water, but the equity and creating value in that business. We weren't thinking those ways before. We have a bunch of those kind of ideas. We have a bunch of consumer-facing ideas that are in the hopper that I think over the next few years, not only will we be the largest in the world and scaling our core business, but I think will be able to own more of a consumer relationship with our scale that adds real value and redefines our brand to the customer.

So I don't want to lose track on that thread. And for sure, I'm going to come back and just explore further with you some specific growth ideas that investors talk about. But before we do that, I got to hit the obvious question. It's already showed up in our Q&A, which is this backlog question. So it must be an exciting energy to be at the world's leading live events company and now events are coming back just within your building. But the obvious question is, geez, isn't there going to be just a massive like traffic jam and this idea of a backlog and how does that get worked through? Does that create any specific bottlenecks? And just how should investors think about what that means for just the way your growth sort of recovers and sustain? So a specific question on the site was also like how many years before you work off the backlog. This idea, right, of like, oh, everybody is going to go out at once, and how do you deal with that, and then what?

Right. Yes. So I think, listen, I want to set up. There's no -- we don't think there's a cliff either. So let's get that set up early. I was with a large artist yesterday who's thinking of going out. And our artists incredible brand managers. They're very smart inventory management, if you want to call it. So they're not going to throw themselves into the wolves, if it doesn't make sense. So we're -- I would say, we're looking at every artist scheduling '22, '23 and '24. No one's dying to go and jump on top of an existing tour or one that they all -- everyone in the industry knows the big ones, which ones are not announced, but which ones are coming. Everyone knows that. So I would say '22 is, obviously, going to be a record year. But those would all be already in the books, well thought out, you wouldn't have decided to play in '22. You're not playing Monday nights in Pittsburgh because that's all you got. You're going to say, "You know what, I'll wait until '23." And I've said it before, though, people always forget, though, that there's a whole building block to this. There's 4 different zones in the world we think about. So you may now decide, as I talked about last night with an artist, that artist may start in '22, but they may start in the Pacific Rim, which really wouldn't have historically done. And then we'll come into America in '23. Some will start in Europe, some will start in Latin America. So you also have more variability that people don't think through that we have -- that we can look at. So to answer the question, you're going to have a robust 3 years to work through the system. Now the good news with that is a tour cycle is about a 3-year model. Every artist says, "I tour 1 year, I take a couple of years off, launch an Album, reboot my system and I come out the third year." So the good news for us is that artist that's coming out in '22, they're going to stay home in '23. They're going to head out in '24 into '24 into '25. So you're kind of already -- you don't get the cliff because the first artists that are backlogged in '22, a little bit of '21, they're going to be coming to the back end when the backlog kind of works its way up. So we do believe we get an over -- an extraordinary hit in '22; a continual '23, '24 climb; and then it reboots itself into that next cycle.

Makes sense. Listen, I think, it's clear to anybody watching that you wake up in the morning thinking about growth, Michael. And so I'd love to talk a little bit about growth. I have a list of just ideas. Some of them may be obvious, some of them may be stupid. I'm probably missing some good ideas that you put forward, but just investors are always thinking about, well, there's sort of a natural rate of growth, which we should maybe talk about that. But then, like, what's -- what are some other levers? So I'd love to explore some of the other levers with you. Maybe we should just start with the natural rate of growth. I mean so your business grows naturally, I think, that's just what is that, it's a function of general growth in touring worldwide, the expansion of your footprint to cover more of that space. Frankly, just natural pricing progression, I guess, in the consumer price of participating in these events and that just naturally grows at some mid-single-digit rate, something like that. Is that unfair?

Yes, exactly. Yes, we've had a good consistent track record of that. If you look at the context globally, this is still -- and it's not perfect math because some of the foreign countries don't report as originally, but somewhere in the $30 million, $40 billion global concert distance pie, right? So you just look at that as big as we are in America, and people talk about our scale. We're still -- are we 30% global market share, 25%, 32%, whatever, there's lots in the room to grow. So -- and this is a global business, which I've always said to investors, the greatest business is this one, and it's low capital, no regulation global, meaning we can shop tomorrow and buy that promoter in Milan, in Cape Town, turn it into Live Nation, put our tours there, add Ticketmaster and sponsorship and you have a vibrant local market, then you start building some amphitheaters or festivals, put a Lollapalooza there or a rolling lab. So the reason we've been on such a global business care is we've been able to get to 40 countries now, 100 offices in 40 countries. Now most of that's organic, right? I don't have to buy a lot of that stuff. Some of it is just partnering with the local promoter because he wants to be part of the Live Nation network, that's Disney to him, that solidifies his relation to his local business. So we still think for the next 5-plus years and years to come, we just show up and keep expanding on a global basis. The artist is expanding globally. So we're going to be there with them. Pricing, this business is still completely underpriced. There's $10 billion, $12 billion in secondary. Lots of pricing available. So every year, you've seen slowly the artist is saying, you know what -- and artists are fabulous brand managers, and they're never going to charge $3,000 for the front row what the market might bear. But tell you what, they're not going to turn to $125 anymore. They're going to say, "Okay, it's $150 this time. It's $175." And we've seen that happen over the last 5 years, you're going to see for the next 5 years. Every artist is going to say, "You know what you're right. I'm going to charge $300 for the front row because I'm an elder artist or I'm going to charge more for platinum or VIP." So pricing, market expansion, our 33% just grows to 35%, 38%, 40%, you're adding more customers. So then the network works, we grow our global scale, pricing goes up, we grab some of that, put more people through our venues, we sell more tickets, we get more ticket fees, put more people through our venues, we have a bigger advertising network, we get bigger sponsors. So we've kind of been able to show that cycle for the last multiple years, and we just have incredible global footprint untapped still. I mean, Latin America, we're still -- we've been dabbling when we get OCESA done, we'll be able to kind of propel that Latin American business, but we have low market and nothing in Latin America, low in India, low in most of Eastern Europe, low in most of Pacific Rim outside of Australia. So lots of opportunity for us to just grow that. That's just if we just keep the train running, keep doing what we do best, we think we can provide great returns and great growth for the shareholders. Now you're right. What we have done time and time again, over the years, is say, "Okay, so what are the areas we can excel at double digits within that?" We think there's some great sponsorship opportunities. We've talked about the digital ticket, which really unlocks -- the digital ticket isn't about being a closed platform, the digital ticket is just about bringing data to a PDF, right? Our biggest opportunity in this entire business is 100 million tickets that Live Nation sells to art shows, but let's forget the 500 million that Ticketmaster sells, but my 100 million tickets, we historically have very low data on that. We don't know who bought the ticket. They bought it, they bought a resale ticket, they gave it -- they resold it, they gave it to their friends, to PDF. The minute this ticket, over the last couple of years, has started to become digital, and we started that before pandemic, and we've seen it now really come to life in the WWE event, the Super Bowl this year, these early events that are digital. You just explode your data pool of who is that customer that's at the event. How do I now talk to Todd when he walks in the Jones Beach amphitheater? Now I have a relationship with you. I didn't really have one before. You might have bought a ticket, you might probably didn't even buy it. Maybe your wife did, maybe your buddy did. I don't know who those 18,000 people in Jones Beach really are. Now I do, right? So now we can -- your mind can go from there, right? Okay. One, I can talk to you, "Hey, I've got a seat upgrade. You're in a crappy seat. Do you want to move to a better seat? Hey, do you want to get a special on the merchandise? Hey, you're at a country show, look Brian's play next week." So we've got a whole bunch of fan-direct tools that we're going to unlock. We think that's a great revenue business. I think if you're the General Manager of my Jones Beach Arena, and your job is to increase per head revenue. And we've just given you this new tool that says, now you can actually talk to your customer. Up until now, open the doors in good luck. Now it's the -- you can talk to them. You can tell them that there's a special on beer and hotdogs in the intermission. So we think it really unlocks our business. The more we have a better, deeper relationship with 100 million fans, whether it's through our data, whether it's on site, through new consumer products, subscription ideas we have, we just think that's a wealth of growth. Forget about what you do for sponsorship because you now get to say, "Listen, Verizon, you're one of our largest sponsors. We now have just better data about your customer. We can target those customers better. We know who 19-, 34-year-old customer you're looking for." We have a better demographics, we have a better profile. We can bring that true audience to life now. And we know where they're going to be on next Thursday at 09:00, we know where they're going to be. And that's a very different model than spraying across digital. So we have a very targeted business for the sponsor we think that is really -- if you unlock the data around those 100 million customers, it feeds every business. We market better, we sell better, we offer better products to them. I could go in other areas, but that would be the foundation to where we would spend -- we spent a lot of time in our data lake, getting our data right, getting all of these data feeds into one central place. So it can be acted on, work with our Ticketmaster, our concept marketers, our venue marketers to build executions so they can access to hit that target. So we think that's probably one of the great B2C opportunities we have.

Yes. So lots to go back and explore there. I'm going to -- just to keep it a little bit of continuity. I had a question I was going to ask later just around the data. It's been something I've actually been spending a lot of my time thinking about because as a media analyst, you said something right on that really resonated to me, which was like in Hollywood, like everybody was a B2B business. Everybody is suddenly becoming a B2C business, whether it be a video streaming or music streaming or video games, even at ALTIS, and people are working on new things. But every company I cover is talking about how much data they now have and how valuable it is and how they're using it. But I'm sure that makes sense to me. But it also seems like, I mean, if you just take sort of music, and I know you're more than music, but you've got the music streamers, the DSPs, saying how much data they have, you've got the artist probably collecting first-person data with their own fan communities and through social media and through video games platforms now and things like that. You've got -- the labels trying to aggregate a whole bunch of data of their own and from others, you've got your -- there just seems like there's so much data. That's great, but it really forces me to think about, well, which of that is more valuable another, how is everybody going to use that? And you just gave some great examples internally of how you can use it with your own venues, with partners. I mean so for investors thinking about what -- how to value this? How is this really going to show up? Is it more about increasing sort of yields and revenues through just sort of having better marketing for your own network? Is that you licensing the data to other people? Should we think of that as a revenue stream? Is it a component of relationships you have that just allow you to have more touring relationships or just stronger economics across the whole -- maybe it's all those things, but really trying to see we all know data is valuable, but trying to think about how valuable to whom is -- I haven't figured that one out.

100%. And in my shop here, trust me, there's 2 words I hate when we use them in presentations is platform and data, right? It's easy when you don't have the answer, just it's a platform, a platform. So I am precision about making this come to life. We don't live in theory. We have to live in -- okay, so is does that reality, when you're a low-margin business like ours. We don't have time to mess around on could-bes. We got to -- when we strike, we got to say there's a well here that we can mine. So 2 things. One, I would say, listen, not to brag, but I always remind people that we really were the first Hollywood company that went direct-to-consumer. And I only say that because we bet the farm back then. People will -- they'll realize when we were renewing with Ticketmaster, we were a public company, they were 70% of my EBITDA. And I had an 18-month window where I had to tell them I wouldn't renew and replace that EBITDA. But I was so obsessed with the Board and our business that if we didn't own the customer, we would not have a long life. So that was a gigantic strategic move for us. And that differentiated us forever. And I didn't know that because I didn't renew and launched our own ticketing company that we would end up bringing Ticketmaster to the table, but I always remember if I had renewed back then and just stayed a B2B business, this chapter is very different. So our obsession with the customer and what you can do with that data and shaking the customer's hand has always been paramount. I always believe this, my #1 client, the artist, only cares about 2 things. He wants distribution and money, right? Who's taking the risk, who's writing the check and who's selling my art? How do I get my art to the customer? And if you have the customer's wallet, they will value you. Or -- so I always do that. So I always wanted to say to artists, "Listen, we know who bought your ticket. We can help you sell more tickets. We have data. We can find other fans that look like your fan that haven't been to your show. We can sell more that as to -- more tickets to your show." So we've always been very, very religious on, okay. So what do we do with this thing called data? And I've used -- I sat in my marketing meetings and said, "Oh, I've heard this company brag about data and I've showed up at the hotel and so what? They got to diet coke in my room, like what does that mean? How does that make me spend more money? I haven't seen it come to life that often." And so you're right. We're pretty religious on those examples we give you. We look at that and say, "First and foremost, we're ultimately an on-site company with those 100 million customers, right?" Our world comes together when they walk in the door, right? So whether it's the festivals, whether it's the venue, wherever they are, that's really our Disneyland, right? Once I get you there, I want to form a relationship with you. I want to upsell you. I want you to have an incredible experience. I want to tell your friends, I want you to put it on Instagram and be my big marketing arm and tell people how great it is to be at Jones Beach and market it. So knowing now who you are in that simplest form, knowing what customers are there, having a relationship with them to go to Jones Beach, you're probably going to come to 3 Jones Beach shows a year. I probably shouldn't make a you sit on an on-site random Saturday morning to come back. I probably should start forming a direct relationship with you. I know you kind of like what music because I now have history with you or you've answered a survey [ you wanted to ]. And so we think that -- because concerts are actually a very local business, although it's a global business. We think having a direct relationship with the customers that they're going to shop in our venues and our festivals on an ongoing basis, we absolutely know when we talk to you, when we've done our surveys, when we've done our test projects, that if I text you, if I get direct to you around that sales cycle, you're going to the show, I hit you during the show or I hit you after the show. Those 3 windows are very valuable selling moments. And you will buy more on the way in, you'll upgrade on the way in, you want to join it while you're there, you're all in poker, pile them high and watch and buy, right? They will -- they want it all when they're there for that experienced moment. And when they leave, they want the set list, they haven't thought they missed the t shirt. They want to go again. So we think the paramount use of data for us is just having that now direct relationship with you, not in an e-mail generic class, but a direct "Todd, hope you enjoyed Luke Bryan. Hey, you're going to Luke Bryan tonight. Did you get an upgrade? Do you need a VIP pass? Did you want to upgrade parking? Hey, Todd, you're here right now." So we think if we accomplished that, just take the PDF to a digital identity and have a relationship of value to that individual that's a concert goer our business per heads on site, our per head per customer increase is where you'll see the tangible bottom-line growth. And that's our -- and we tell investors all the time. Our job is to put scale in our flywheel, get as many shows on a global basis and then monetize those 100 million fans, mostly on site. Obviously, we can do it digitally now, too, but on site, '17, '22, we've got all these different data points that we can grow $2 per head ongoing, and we still have a very low bar compared to the best of the best hospitality, the masters, as I use it, $400 per head. So we have a long way to go to be a better experienced company and provide a better value proposition to you. And if we do that directly with you, add better products, you're going to buy. So that's really where you could see the best kind of come-to-life data. Forget about all, there's a bunch of ways I can target you better and I can sell you tickets and others. But that's the primary core business that we can do a better job on.

Makes sense. Makes sense. So this is probably the old school media analyst in me showing up again, but I know it's in there, but you didn't specifically call out the value of that in terms of your sponsorship and advertising business. You mentioned it a bit before. And this might be because I'm a media analyst, but I'm sitting here watching every day, the traditional forms of big ad-supported mass media to Blue's audience globally especially in the States television. And I think about those 100 million ticket buyers to your events and the data you have on them. So I think advertising, promotion, sponsorship is a single-digit percent of your business of your revenue now. Correct me if I'm wrong, that's -- the market seems starved for the opportunity to reach consumers with their message. It seems like you have a lot of consumers that you know a lot about, you've got them in captive venues for hours at a time, doing something that they love. How should ambassadors think about the potential there and sort of the growth path to that?

Yes. Again, we've consistently delivered double-digit growth on this. And revenue is single, but contribution is high, right? Because sponsorship is a high, high-margin business for us. So what it contributes to our AOI is a significant component and growing. So we've said it historically, we still think, yes, we're under serviced. Our business still -- it's a $2 billion -- if you just wanted to find it is event business, old school event business, forget even other ways you can define it. If we just do a better job of convincing brands, but we're the NFL of music, and we can provide you the most valuable overall relationship, integrated programs, on site, digital, consumer direct, artist imagery, all of those tool -- all those tools in our box that our brand can use, we think we continue to grow at double digits for many years to come. So we think this is a robust business. Our brands -- we kind of saw through the pandemic. Again, talk about renewal rates, did I expect during the pandemic that a whole bunch of brands would have jumped ship and said, "Listen, we're going to cut our event business. We're going to bail on our contract. We're going to move on for a couple of years and buy Facebook ads." And it is amazing that we really lost no customers through the pandemic. They held on through the year. They're still here. We renewed most of them, our renewal rate is on par with history, and we're exciting new ones. So to me, that -- if there's any data point that would show, boy, they must believe that the on-site experience is valuable because they waited around for 12 months, even more than 12 months because this year is not a full year either. So yes. We're seeing incredible -- I think, you nailed it. I think if you're an advertising big brand right now, you're probably confused in general, how do I connect with my customer, not so much just a broadcast to my customer. So you're on your own challenge right now from broadcast to digital to TikTok, what do I do? We are an auction that seems pretty simple in the -- in my big advertising budget, I actually can go talk to this exact segment directly in a very connected manner and bring my brand to them. So you're right. We hear a lot of that from the CMOs. I have these other part of my marketing pie, I really want to make sure I dedicate a piece to you guys because I know you can actually deliver a Thursday in Indianapolis to a core demo that I'm trying to attack and add value directly to them. So why we have over 900 sponsors continually with incredibly high renewal rates is our 600-person sales team is the best at figuring out what you need, whether you're a Verizon, whether your American Express, Hilton, what does your brand need? What can we bring that you need for your brand across our global portfolio? So you're right. I mean this is an advertising-centric business at the core. It's an on-site advertising business. Those are our 2 big, big revenue drivers and profit drivers, high margin. So continue going to be a huge business, huge growth opportunity, double digits.

Great. I wonder there a concept, I know I've heard you mention interviews, and I think even maybe in earnings calls occasionally, I don't want to overplay it, but, I think, I've heard you talk about exploring concepts around sort of membership programs or other ways to have an ongoing relationship rather than a transactional relationship with ticket buyers and of course, investors tend to get pretty interested in the concept of subscriptions or memberships. And I can imagine a lot of ways that could bring benefit to your consumers and artists in the portfolio of businesses. I don't know if you have anything to announce per se, but is there anything -- is that a -- is there anything there in terms of sort of changing that event-going model in some way? Or do you have enough that you can offer consumers something of value in terms of a membership program? Is that a thing? Or are we trying to force something that doesn't really fit?

No. I think the good news about our business is we're also -- we do 8,000 club shows up to stadium shows. So we're a very robust customer base, right? So yes, the average customer that goes to one show a year, it's a little different. But there's, obviously, a customer base that's going to 8 to 12 shows a year. They're much more into music discovery. And I would say, we -- again, we may need help on our PR department around this, but we're already -- have been in membership businesses, right? So in theory, we've been in it, we probably haven't done a good job of expanding it. We think there's opportunity. So seasoned tickets are no different than a membership program, right? You bought into the idea of I'm going to buy a full year for an annual and monthly rate. So we have a whole bunch of membership programs that have existed. We've had local membership programs. We've had pre-sale membership programs. So when we did our work this year, and again, because we had our off-site, and we could sit back and go, "Let's put on the whiteboard. How many memberships do we get going on here? How many different ways do we sell customers fragmented programs?" It is interesting. And you're right, you could look at from an airline admiral club model to a subscription model, can I offer more consistent value across our platform to a VIP room to ongoing access, to shows, to certain bundle of value to live streaming, et cetera. So yes, we think that the urgency or the great business we have is those fans are so passionate about this business, right? So I think we can do a much better job of harnessing and modeling that passion and turning that into products that they'll buy versus maybe have it end up on a secondary site to unlock that passion, right? They're going to spend thousands there. So they'll probably spend more than a premium to be part of a club and get some better benefits ongoing. So I think promoters have always done a good job on an entrepreneurial tactical basis. Again, our scale just says, maybe we can do this at a much grander, consistent manner. So I think there's some exciting ideas there that we're going to explore.