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

All right. Great. Let's get started with our next session today. Thanks, everyone, for joining us. My name is Stephen Laszczyk. I'm the lead analyst for the music, sports and live events sector, here at Goldman Sachs. We're excited to welcome back to Communacopia this year. Joe Berchtold, the President and CFO of Live Nation. Joe, thanks for joining us today.

Well, thanks for having me.

Great. So I wanted to start off high level. Live Nation's off to a record start this year, every one of your key operating metrics, including concert ticket sales, fee-bearing tickets, committed sponsorship revenue are at all-time highs through your second quarter. At the same time, the economic backdrop has changed a little bit over the last number of months. I was curious if you could just maybe talk a little bit about that some of momentum you're seeing in the business today and how you feel about the back half heading into 2023.

Yes. Our momentum remains strong. I look at probably 3 indicators for kind of the real time, how are things looking? One is what's going on with the perk apps on site? Are people continuing when they go to the show, buy things at the same level or are they pulling back their wallet at all. We haven't seen any signs of that. We're still -- our amphitheaters are up around 30% still year versus '19 in terms of the average per fan revenue outside of the ticket sales. So that's remaining strong. Then I looked at how our shows closing. So in the last 2 to 3 weeks before shows are they still selling the same number of tickets for those fans that are making their later decisions and how were on sales doing for shows this year and for shows next year. So if you look at August, which I guess is your latest month, I mean, we can all debate, right, was February, the start of the bad month or every time I -- we have one of these conversations, it's always. Well, now that we're feeling some economic pressure and like, well, aren't we now -- didn't we declare a recession a month ago. But anyway, in August, concert ticket sales for shows this year are up 47% relative to August 2019. So just if you want, like the latest, right? So no, I mean I would obviously say, no pullback in the momentum. That's an even higher level than the overall ticket sales. And we, at this point, obviously exceeded 100 million tickets being sold for shows this year by a fair bit. So no, we're not seeing any issues in terms of the consumer demand for the shows that are on sale, the ticket sales, the on-site spending. We continue to feel very good about the priority that our concerts clearly are for fans.

And August last year was a fairly robust month for you.

Using August '19.

'19...

So -- because everything we've given you right where we've been talking about relative to the 98 million fans in '19 and so on. We've been using '19 to kind of normalize it to make sure that we're giving the best apples-to-apples comparison.

Great. I want to dig into some of those KPIs, but maybe starting at the top of the funnel and the supply side of the equation. In your second quarter call, you stated that confirmed show bookings for 2022 were up 30% relative to 2019 and that the 2023 artist pipeline was the largest you've ever seen through the first half of the year. Can you talk a little bit more about the strength in the supply side of the content market right now and the level of interest from Argus to get back on the road, which it seems like we're seeing, I think, even more importantly, stay out on the road for multiyear cycles.

Yes. Well, artists are like everybody else. They went -- they went without the majority of their income for a couple of years. And they're making most of their money, 80%, 90% of their money they're making from touring. So it's like anybody else, you say you're going to lose that percentage of your income for a few years. You obviously are going to be pretty motivated to get out and start making money again. And even for the bigger artists that you could say, well, do they really need it. Artists tend to care. They've got people in their band. They've got roadies. They've got a large -- they've got a corporation of people that get fed off of their tours that they care about. So they want to be getting out there and making sure that everybody involved is back to earning money. So what we saw was, yes, a very strong return on the supply side with artists wanting to get out. We're seeing next year big early for a couple of reasons. One is, as we got into the discussions about the restart tours, a lot of those discussions were multiyear, multi-geography. So it wasn't just, hey, am I doing the U.S. I'm doing the U.S. , every sales in the U.S. this year and then Europe next year. It's what's the multimarket, multiyear run. So we had -- because of that, we had more visibility, I think, into the future than probably normal. And then the other is next year is shaking up to be another very big stadium year. And stadiums are the tours that have the longest lead time, the magnitude of their production and the planning and just what's involved in putting on something of that scale. You tend to plan it further in advance, go on sale further in advance. So you've got that visibility. So between the high volume of stadium shows and the, call it, the multi-segment tours, we're seeing the '23 is looking like another great year for us.

Are you seeing that shift in the way artists think about scheduling their tours, you mentioned multiyear, multi-country, multicontinent? Is that a trend that you've seen developed due to COVID, is that clear that you've seen over the last number of years...

Yes. I think it's all in evolution. 10 years ago, the majority of artists were still doing show by show, and it was the big artists were doing tours. And then it was our job to make it easy for them to do tours and say, hey, you can make even more money if you do a tour because you can plan it all. When you plan a tour, you can plan the marketing, you can plan the on sale. You can have consistency. We can do a lot of the work for you in terms of the routing, all of the logistics that are involved. So it's our job as a company to make it easy for them to tour as opposed to sell off show-by-show or work with different promoters in different markets. So it's a logical extension for us then to say, okay, that happened for the U.S. Now let's add Europe, let's add South America, let's add Asia as we continue to expand in the number of countries that we operate in, we can make it very easy for them to sign up for the multi-geography tours. And so I think it's a continuation, maybe a bit of an acceleration, on both sides, are working hard to make it easier for them and then say, yes, this sounds great to have in the next 3 years sorted out, that's going to make our lives easier.

You mentioned some of the real-time demand figures that you're seeing in the strength in those metrics. But I think the narrative out there to a certain extent is still, we're still benefiting from pent-up demand. People want to get out this year coming out of COVID. And that perhaps over the next number of years, you see that reversing to mean a little bit. Can you just maybe talk a little bit about your confidence in demand heading into 2023 that you think that there's any pent-up spending that's coming through the cycle this year and maybe what that means going forward?

Yes, may be. I agree with reverts to the mean. I'm a big believer that long-term trend lines tend to revert to the mean. Our long-term trend line is 8% growth in fan count, low double-digit growth in AOI. So yes, I think over time, you revert to that. I don't -- it's not really a pent-up situation for us. It is and it isn't, but it's a continuation of that historical growth. So if you look at where we were and how we moved in 2011 from 40 million fans to 100 million fans by 2019 and then you continue that growth it really just becomes how do you count '20 and '21 in your trend lines, you include them, not include them, maybe count them as one year instead of two. I don't think we're going to know at that level of precision until we're sitting here in 2025 or 2026, but it's irrelevant in the scheme of things. What matters is, yes, you have that very robust long-term trend line of growth. You've got the secular tailwind of conversion and spend from goods to experiences, which continues, which your research says we're still behind on, right? The last numbers I saw at Goldman said that we're at about 65% spend on experiences versus 69% pre-pandemic. So we saw some strong pickup tailwind on that happening. You have the continued globalization of demand in what's very much a supply-driven business, which we can get into. So that trend continues. And then we've been able to take a bit of share every year because we've got a business model that is very focused on how do we super serve the artists, pay them more money and get them to work with us. So all of those pieces, if we can continue to deliver high single-digit growth in fans, drive our flywheel to then deliver double-digit growth in AOI. That's a great trend line to revert to.

You mentioned that the long-term growth trends in supply and maybe how that interplays with demand, especially as you open up certain geographical regions within your platform. Can you maybe talk a little bit more about the long-term supply drivers of the business on a global basis, maybe how that plays into demand? And maybe tying it back to historically 8% annualized tenant growth, where do you expect this going forward?

Yes. Again, because I think this is a supply-driven business with massive latent demand, there's every opportunity for continued high growth. So if you go back the same digital technology that disrupted the record business that sent the artist to have to make their money on the road, created a few other things. It created global digital distribution platforms like the Spotifys of the world, the Apple musics, whoever you want that may. That fully democratized the distribution of music. So as opposed to when record companies released an album in L.A., New York, San Francisco, L.A. Now it's the [ Grinnell ] and Des Moines to Santiago to Seoul. We're all hearing that beyond, say, album drop at the same minute as everybody else. Partnered with the rise of the social media platforms, the Instagrams, the TikToks and so on, where every artists can now become a global star and they can become a global star much faster. I mean if you think back to 2019, how many people in this room had heard of Olivia Rodrigo, and heard of Bad Bunny, right? Had heard so many of these artists that are now filling arenas and selling out. So you're seeing that the artists can rise to a level that they can sell out much faster than ever before, while Dave Matthews is still as big as ever. So you've got a confluence of massive supply meets latent demand. And it's our job to just sit there in the middle and say, how can we help make a market, how can we help pay these artists so that they can be successful out on the road, seeing their fans, fans can see them, do so in more markets, whether that's on a hyper local basis in the U.S. or that's on more international markets down in South America. It doesn't -- it's the same, right? There is no difference between adding a building in Austin, so that we can add -- we can have a new arena stop in the U.S. that didn't historically have one with building an arena in Chile, right? Because it's another location, and they both have a lot of fans that are looking to go and see live music. So the -- again, our TAM is 7 billion people, if you want to go extreme, right? Or maybe give me only 20% of people want to go to a concert or fine art. TAM is 1.4 billion people. That's -- I'm okay with that. But it really is -- it's untapped and it's really just on how much we can scale and how much we can deliver against that great demand out there.

To reach those 1.2 billion people in your TAM suggestion there, you need a global footprint. And you've been building that out over the last number of years and most recently, last year, with the acquisition of OCESA down in Latin America, even more recently, some concert promoters in Asia. Talk a little bit more about that international expansion strategy. Where are we at in South America in terms of the assess integration? What could investors expect in terms of further expansion down there?

Yes. No, further expansion will come for sure. OCESA has been great. We're fortunate that the management team to start with at OCESA, is a great management team. And we always talk about when we do our M&A, we really want to buy As, right? We don't want to buy Cs and Ds and have to try to rehab. We want to buy As. We want to have great leadership, great teams. And working with our team, it will be easy next year with Mexico, it's very easy. We just add that into the North America routing. And all of a sudden, we can turn our terrain firehose of North America into Mexico and...

Similar artists?

Yes, similar artists, and we can just bring them down. The trucks can go from Houston down to Mexico and come back out instead of treating it as a different source. So you can quickly ramp up the volume of shows you do there. We can bring their Ticketmaster platform to the latest capabilities in terms of what they can do in terms of artist services, on pricing support, how they can help the venues on the marketing side. We're working with them to figure out how do we use their connections and their understanding of the Latin market to bring more Latin artist to the U.S. in a red hot market. And then take a bit longer, but how do we really use them as the beachhead into South America. So we do more of these coldplay type tours that we did this year, where we can do with full tour, routing people through South America. So we're going to continue to be very aggressive globally for the reason that I was just talking about. It's that demand exists everywhere for these top artists. And we see the coldplay tour was phenomenal, sold out everywhere, a win, right? You've got in these major cities, such massive populations, it's not difficult to find a 50,000 people to show up and fill the stadium.

I want to shift and talk a little bit about pricing. Concert ticket prices on average are up 10% this year relative to 2019. Most of that is driven by pricing increases at the front of the house. Could you talk a little bit more about the adoption of platinum pricing this year and how it's played a role in driving overall average ticket prices?

Yes. I think that, again, this is an evolution. It's not something that we haven't been doing. But we've been talking about for a long time, our belief that the artists deserves the economics from their art, from their performance. And concerts are one of very few services you can buy or products you can buy where the value goes up the moment you buy it because the artists for historical reasons, some having to do with managing their brands, some having to do with not really understanding with clarity, the demand for their products have historically undersold. So we have been working to create better and better tools for artists to understand what's the value of my ticket. And because secondary is so transparent, as we've developed better tools, we've been able to say to the artist, look, this is the value of your tickets. We think you should get this. If you want to leave it on the table, that's fine. That's your decision, that's your brand decision. But let us show you that the 16-year-old girl superfan for Harry Styles, she doesn't have a prayer to get that front row ticket. There's too much money, scalpers have too much incentive to defeat our efforts to stop them. There's just too much money involved, they're going to get those tickets and they're going to resell them for $3,000. So it's -- the decision is does the superfan get it for $99. The decision is the scalper get 3,000 or do you get 3,000? And so they may decide in the context of their brand, what do they want to charge and how broad do they want to do that. And I think coming out of the pandemic, yes, there's been an increase in the artist saying, I should be getting more of that money. And probably what's happening as much as anything, it's -- maybe it was the top artists were doing it more before. Now it really is the standard. Now if you're doing a tour, you're really going to say, yes, I'm going to be using -- I'm going to get some market pricing out of my tickets. It's now how -- what percent, how many of them are going to do and how hard am I going to push it relative to what the data and the tools are now saying those tickets are worth. So as a result, yes, I would say that most of the price increase this year has come from the substantial increase use of platinum ticketing. But I think it's also important to note that our sale of secondary tickets has doubled this year. So even with all of the efforts to continue to get the artists to market value, the demand for those tickets is shown to be so inelastic that the secondary market is growing even faster, both in terms of number of tickets and in terms of pricing than that primary market is. So we're still battling a little bit of chasing history to figure out how moving forward, we capture that. So I think there's a long runway going forward of being able to continue to use pricing as a tool for artists to capture the value of their art.

I think you mentioned that you're shifting, I think it's $500 million from the secondary and back into the right holders to the artists. Any sense -- you mentioned the secondary as even rerated further this year? How much opportunity is left?

Yes. I think we got to figure that out between now and November when we do our analyst presentation. So I'll save a little bit for then. But my guess is the number has gone up, not gone down despite moving $500 million so far this year.

So there's also been some increased regulatory focus on ticket pricing this year coming out of the pandemic. I'm curious can you maybe talk a little bit about some of the regulatory concerns and how you're addressing them?

Yes. I think that you hear a lot, you see a lot. I think 80% of what's out there is just is a lack of understanding of how ticketing really works. And I think that the range of debate will narrow if we can work together and get more clarity on that. The recent noise with the with the Bruce Springsteen ticket pricing was a great example where we were getting pillared for the price of those tickets. A lot of people thought that Ticketmaster set the price for those tickets. And for one of the first times, I think, ever for us, we had a representative of the artist as manager come out and say, no, no, no, we set those prices. We looked around, we looked at what other artists were charging. We looked at secondary. We think -- he is one of the, if not the most iconic American artist out there. He doesn't come around very often, and we think those -- that ticket pricing is fair. By the way, those tickets all sold in the first hour. So empirically, from a market standpoint, they sold. So I think that there is somehow this perception that by many of the Ticketmasters is this wizard right behind the curtain who's pulling a lot of strings in a way that's not true. And I think that we need to provide more clarity. I think that there are a lot of things that can change in the ticketing industry that we would be supportive of, moving to all-in pricing, eliminating speculative tickets, making sure that there's declaration on secondary tickets, where they came from, who's selling them, what the original price was. There's a lot of things that we agree with. And I think that a large chunk of this is just a misperception that somehow there's this central Ticketmaster that is making decisions that it's just not making.

Do you ever see getting to the point where perhaps be a limit on pricing or how you operate your business...

Well, I think from a public policy standpoint, that would be such an amazing shift, right? Because if you look at it, front row tickets for the warriors here on a normal game or what, $4,000, I'd hate to figure what they were for the finals last year. I'm sure if you could buy them from the primary, they were $10,000, $12,000 and I heard they were going for $50,000. So are you going to tell the artist that they have a limit on what they can charge, but sports can charge what they want. I mean that be -- again, I mean, that is a little bit what's happening here, but actually ever come out on a public policy statement and really assert that seems like that would be a pretty big leap from where we've historically operated.

I want to switch around a little bit within your concerts business and maybe touch on the festivals for a moment. There's been some debate this year around the attractiveness of the festivals business. Fans becoming more choosier. They have a lot of options out there this year. At the same time, costs are rising to operate festivals, COVID inflation, some labor shortages and supply issues within the chain. How has your festivals business performed so far this year?

Yes. I think we are seeing, and particularly in this uncertain economic time that the people love a bad story. People would far prefer to write a new story with a headline of gloom and doom than they do a positive story. So our festival business is doing great. And I'll go through some of the pieces. It's a record in every respect. We'll have already sold 13 million tickets up over 30% versus '19, we'll probably end up at 14 million ticket. We'll do over 150 festivals this year. We'll have, by far and away, the most profitable year throwing our festivals ever. Yes, our costs are up, no doubt. We're like everybody else in the world, labor costs are up, supply chain costs are up, fences, stages, steel in Europe, all of those costs are up, absolutely. Our ticket prices are up, our on-site spending is up, and our sponsorship is up. And as a result of those 3, our per fan profitability across those 14 million fans is higher than it ever has been. We you have to look at it holistically as every festival doing great, of course, not. Festivals are portfolio like everything else. Usually, when you start a festival, it's going to lose money for a few years. Some of them make it, some of them don't, some of them became the [indiscernible]. The ACLs, the Electric Daisy, some of them need to go away. It's like any start-up business that you're doing. So if you wanted to go try to pick out the 10 out of 150 that didn't work, I'm sure you can do that. I prefer to look at when we were young, that blew out in Las Vegas. It went from an idea to 3 sold-out days overnight or great shows -- the other big ones that I talked about, the [indiscernible] all over Europe, U.K. had a record summer. So no, it's doing great. We've seen young -- they tend to focus on young people looking for experiences. They've been our highest growth demographic, not surprisingly because that's what we've created the supply for with the festival. So in totality, that's been a great business for us this year, and we expect that to continue.

How do you intend to grow that portfolio of festivals that you operate, whether it's marquee brands like Lollapalooza extending them into different markets or even the new upstart brands that you're trying to create?

Well, I think what you do see is brands need a purpose. They need a soul. They need a reason. What are they? I mean one of the -- when we were young works, right, because it taps into, it's a certain -- I want to go hear that music from when I was growing up, that music resonates me. That has a purpose. Electric Daisy has a clear purpose. So when you think about your festival, you really have to ask what is it soul. If you're just trying -- if you got to uncle with a parking lot and you're trying to hire a band and throw a party, it's probably not going to work. You need to have some reason. And we look to have the best in the world. We have the Insomniacs, The C3s, Jeff Schulman, who came up with when we were young, people over in Europe, who you wouldn't have heard of, the key is having these great entrepreneur creative people as part of your federation, as part of your collection who are coming up with these festivals. And then we use our infrastructure to help make them happy.

I want to move to on-site spending. You mentioned earlier, I think it's still tracking up 30% versus 2019 in your amphitheater business. Maybe talk about the durability of that trend. I think it's been debated, not only in your business but across like the Disney theme parks and elsewhere, in experiential economy. So what are the key drivers in looking at '23 durability?

Yes. And again, I'm going to go back to your opening line on. I'm going to reverse into the mean guy, Meaning, if you look at our on-site spending, if you look at it over the past 7 or 8 years, it's doubled, right? It doubled from $18 to $35. It's been a steady $2 to $3 growth as we've continued to improve the experience. When we started it was one step better than a state fair going to these shows, going to the amphitheaters and festivals and we've been very focused on just start on the basics on having a reasonable experience. And now the focus is hospitality. How do you think about it in terms of hospitality. Now what we're really focused on is how do you take that to the next level by thinking about segments? And in particular, how do you think about some of those VIP opportunities? Both at the mass VIP, which is really going to be your scale and your dollars and then your high-end VIP. So what are you doing with your VIP clubs, your parking, what are the different experiences that you can enable that might be different when you go with your buddies versus your wife versus take a kid. And how do you make it easy for people to spend the money they want to spend when they get there? And I think the other piece of that is now coming into fruition is it's one thing to create that hospitality. The other thing you have to do is communicate and sell the hospitality. So with our conversion to digital ticketing, we now have a much more effective marketing and sales platform that we can use. Because if you just show up at the amphitheater, you may not know where is the VIP club, what is there? What are the opportunities? I got my daughter screaming. I can't figure all this out. If we can do a better job because we know you're going and hitting you up and say, hey, do you want the VIP parking entry, make it easier, do you want this club, and we communicate that coming up to the show. Then we're going to have a much higher conversion rate, much higher sales rate on that. So that's a piece of it that I think is going to be important as we look over the next few years in terms of how we grow it. You need to be able to -- you got to fix the sales and marketing side as much as you fix the delivery side.

And with the advent of digital technology, that's something that could potentially roll in over the next year...

Yes. No, it's there now, and we started using it this summer, a lot of learnings this summer, and I expect that to continue to scale.

Over the last year or two, you've become increasingly focused on building out your portfolio of owned and operated venues. I think at the moment, you have an active pipeline of approximately 30 new venues across the globe that are in development. Just talk a little bit more about how the new expansion fits within your business strategy and why you think it's an attractive use of capital?

Yes. On some level, it's simple math, which is if you go back to what I talked about in terms of increasing your revenue per fan when you're building, the higher your targets, the better your ROIC is and the more things that where you have a high ROIC you're creating shareholder value when you make those investments, right? So I think I start by thinking about it as a simple math. And then I go back to what we were talking about our fund -- what's our fundamental objective here to grow the business is to get more people going to shows. If you get more people going to shows and you create secondary and tertiary profit streams, you can make more and more money doing that. So what are some of the limitations. Well, some of the limitations are going to be in some markets, you may not have the infrastructure that you want to play the marriage between supply and demand. And again, Austin is just -- it's a great example. It's not -- it's a city that is large enough to support 15,000 people going to concerts 50, 60, 70 nights a year, it's not big enough that it's had some billionaire build an NBA and NHL arena so that we can just roll in with our trucks and have it easy, ready to do. So I give Oak View Group all the credit in the world. They came to us. We looked at that together. We've done it jointly, where we built in the scheme of things, a low-cost building that is very focused on music and also provides what Texas A&M needs for letting us use the land, and it's going to be a home run. It's going to be a home run as a building investment because of the volume of shows that we can bring in and it fills our broader objective of continuing to drive more and more fans that we can monetize in a number of ways. So that's just a single example. But again, you can replicate that example through the U.S. in the mid- to smaller markets in South America, in Europe, in Asia, you can replicate that in dozens and dozens of markets.

You mentioned greater confidence around the R, in the return on investment profile of venues. Is there any sense you can give us in terms of maybe how the return on investment of venues or how you do that profile today and how that compares to maybe some of the prior investments you made in the business on the content promotion side, the returns that you targeted there?

Well, historically, on the M&A side, we'd invest in concert promoters to give us local market presence, and that will usually come with some, maybe a festival, maybe a local building, usually not a big local building, but some sort of local building. And then we would turn our content pipeline onto that market, grow that business, bring in ticketing, bring in sponsorship, and that's how you launch the business. We've given various case studies. Germany is a great case study of that where we returned many fold, I mean we probably make more in a year now. I'm sure we make more in a year now in Germany than we paid for the business not that long ago. So it has tremendous returns. I think that when you're talking about venues of this scale, I'll call it, it's going to be a little more structured, right? I mean you're going to look at those venues at that scale, you're going to figure out how do we want to do this or we can do it with a partner like Oak View, we're going to do it ourselves, are you going to do a separate propco versus opco with different ownership, what are you putting on the balance sheet versus not. So we'll be figuring out and there's no 2 situations are going to be exactly the same. So we'll figure those out as we go along. But they're all very accretive to our shareholders, have been -- I think if you look at our return on incremental capital and what we've done in M&A over the past decade, it's been huge value driving our AOI growth over that period, and I think that will continue.

It seems like you have a high degree of visibility into the returns?

Yes. Well, in part because we're on both sides, right? We're driving the inputs and the outputs. So we look at a building and we have a pretty high degree of confidence in knowing what revenue it can generate because we know what we're going to pay for a lease, how many shows we're going to put into it, what your per cap should be able to be, what kind of sponsorship you can bring into it. So this isn't -- we're not going left or right, right? This is something that we've been doing for a while, and we're continuing to operate straight down the middle. I think one of the things that I continue to be very focused on is, right, we're continuing to build the business by doing what we have been doing. We're not going to go far afield. We think there is great runway for continuing to grow at those historical trend lines, doing what we've been doing on a global basis.

I want to turn to Ticketmaster for a moment. You've added $12.8 million net new fee-bearing tickets for the platform this year on top of the $17 million that you added last year. Could you maybe just spend a minute or two, what are the key driving forces of some of these ticket wins and looking out, how much opportunity is left for you to gain share in primary ticketing?

Yes. I think when you look internationally, we still have a pretty small share on a global basis of ticketing. So a lot of the growth has come from international, as you said, over the past couple of years. I think it's a benefit of during COVID, our restructuring and moving to a truly global platform, which accelerated the technology internationally. I think the technology difference really probably matters more internationally than the U.S., which is further developed. So the ability to bring the digital ticket, the ability to have a high-quality marketplace with strong conversion, the venue tools that we provide that help with the marketing, with the pricing, with the building of shows. Those things all matter a lot internationally, and I think we'll be able to continue to drive further growth there. In the U.S., I think we still have great growth opportunity, but I think more of it is driven by the fact that we continue to do more and more concerts, which drives more and more activity through a lot of the relationships that we already have.

More organic.

Yes.

Other side, I guess this topic is the competition in the primary market that we're seeing. Some of your competitors, more upstart competitors have been more aggressively bidding for some of these primary rights deals. How do you view competition and -- what do you think the impacts of that, that could be over the next number of years as some of these upstarts did for primary?

Yes. I think you always have competition in life. I think right now, you've got [indiscernible] that has gotten capital and is aggressive and is out there. And before that, you had access, had a period of being aggressive and you have Veritix. So you always have somebody who's out there is an aggressive competitor. I think the markets kind of forced that to happen. And that's fine. If you don't -- it's the old theories around competitive performance, you need competitors to make yourself better. One of the reasons why the U.S. is a highly developed ticketing business is where we developed a lot of our capabilities first is because it's very competitive, and that makes us better, and that's fine. And it's our job as a ticketing company to figure out how do we continue to have the best tools to most effectively sell tickets on behalf of the artists, the teams, the venues. And at the same time, how do we think about that Ticketmaster marketplace? How do you continue to drive the economics of that business? How do you think about using the marketplace to sell advertising? How do you think about what are the incremental things that can be sold along with the ticket purchase so that you can drive further revenue off of that platform. And the more that you can drive economics off of that platform less dependent you are on the specifics of the service fee, which is generally the basis of competition. So it's up to us. It's up to be an effective competitor. That doesn't scare me. That's never scared me. I think we win a lot more than we lose. And I'll continue to -- if we can keep up the batting average we've had last year and this year, then I'm 100% fine with that.

I got few minutes left. I want to touch on our sponsorship business. On your second quarter call, you stated that sponsorships were fully committed for 2022 and it's on pace for a record year. What are you hearing from your partners as it relates to live events advertising? And has the tone of the conversation changed at all over the last few months given that grow?

Conversations haven't changed at all. Most of these relationships are multiyear. So they're not really trying to time them in the sense that you would imply by saying that they changed over the past few months. These are brands that are eager to get back connected with fans as the fans are to get out and get to the show. So they've got -- they've got a lot of pent-up desire to say, how do I connect with fans and move my brand forward. The conversations are all how do we connect our brand with the fans in an authentic way. This isn't putting up an ad, putting up a banner ad, you're not putting up a sign. You're saying, I've got a set of customers who either want to get new customers, retain customers, move them up my funnel. How do I connect with them in an authentic way, enhance their experience going to one of Live Nation concerts and therefore, further my relationship with them. And so that can be city can provide you your lawn share when you go to an amphitheater or it could be the T-Mobile viewing stage. The festival, it could be the Dunkin' Donuts kiosk. You're only limited by the creativity of the brands and our people that are working with the brands to come up with these ideas. And the other piece that is important here is scale, right? Once -- we're over 100 million fans now. So we have real scale. So if you're a brand saying, I want to do this, but I don't want to be cute, I don't want to just go to one festival and have that be a little one-off. I want to tap into scale. Well, there's nobody who offers anything close to our scale on a global basis for a brand that's looking for that sort of connection.

What white space is left out in the live event sponsorship space? And I'm curious, you pitched some of these brands that maybe aren't involved, aren't involved with live music within Live Events. I know a lot of brands do sports marketing on the live side. How are you convincing them to, I guess, a, come to live events, maybe to begin with? And, b, come to live music within that category?

Yes. It all starts by understanding their business model. If you can start with their business model and what I was talking about in terms of customer attraction, retention and development. And you know how their economics work then you just need to reverse solve for how can you use going to my 14 -- tapping into my 14 million festival fans? How can I move the needle for you in one of those dimensions that matters to you now. So it's moving out of -- we're not talking about some blue sky fantasy ideas. We're talking about the hard economics of their business and getting in line with them on what they need to achieve and showing them that our fan base can deliver that.

A minute left. That's a final question for you, Joe. Top 1 or 2 priorities heading into next year. There's a lot of chatter, obviously, about the macro. There's a lot of opportunities for [indiscernible] if you had to focus investors enter 1 or 2 things that they should really be focused on and you want to execute against the next 12 months, what would it be?

Yes, continue to continue to drive the volume of fans and grow the volume of fans going to our concerts, which is our starting point for everything. Very focused on continuing to enhance the hospitality at our venues, adding more venues to that mix and continuing to improve that fan experience. So they're spending more when they go to the shows and continue developing that Ticketmaster platform, particularly around digital ticketing and all of its capabilities on a global basis.

A great place to end. Thank you, Joe.

Thank you, guys.