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

All right. Good afternoon. We're going to get started. All right. Good afternoon, everyone. We're going to get started. So I'm Amy Yong. I'm Head of Investor Relations. On behalf of the entire team at Live Nation, welcome to our 2023 Investor Day. Before we begin, we would like to remind you that today's presentation will contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company's anticipated financial performance, business prospects, new developments and similar matters. Please refer to the forward-looking statements section found in the presentation materials posted online for more information on these risks and uncertainties. And with that, we'll begin. [Presentation]

Hello. Thanks. Thank you for all coming. I'm not sure if any of you saw this morning, but we'll do a run-through of what we presented this morning, and then we have some more slides added that Joe is going to take you through, which kind of get more into the exactness of how we're going to keep growing this business. I love putting that on the road again. I'm proud of that campaign my team put together. Everyone always talks in this business about the high end. We forget that the club business is booming also. We're going to do 27,000 club shows this year. It's just amazing. You always get these messages though of what are you doing for the young artists? So we want to kind of double down on that. So in our clubs from September to the end of the year, we did 2 things. We cut the merchandise to 0, so we don't charge you when that -- when the artist is selling their T-shirts. And we give every artist and the support act $1,000 gas card and a $500 grocery card. So a huge difference at midnight when that artist, you're probably paying the support act. You can be paying $500, and they got this support. So we think it's a great way to keep reminding all in ourselves, that's the backbone of our business, and the club business is booming. So we're going to take you through most of every question we get. Great. Your business is booming. You guys are doing great. Is this pent-up demand? Can it sustain? Where is it going? All the questions around macro issues. So we thought we'd address kind of the macro level first, and then we'll get into exactly how we're going to keep growing. So if you've been following our business, this is an industry that's had incredible growth for 20-plus years, 8% compounded growth annually. And COVID happened. And now this year and last year, we've had accelerating growth beyond that. And we do think this is a forward trend. We do think that for the next decade, this business as an industry will grow above the historical 8%. Why is that? Because we think these structural events that have occurred in this industry are really layering on the growth. So you look at social media. We've talked about it many times. Obviously, any of us live in this world, we understand the implications of live music. The artist and the fan, they're connected, engaged like they've never been before. I used it this morning, but you look at the U2 play in the Sphere. We tracked the media impressions. We've had 9 billion impressions globally about the Sphere and U2 being repost. I mean, you couldn't ask for a better marketing channel, right? So instant -- TikTok, Instagram are Live Nation and Live Music's greatest marketing partner you could find. They wake up every day giving some kid FOMO why they're not at that show tonight and/or amplifying why you should go see Travis Scott if you've seen this in the SoFi Instagram feed. So social media, we think it has been a big part of our business. Streaming, it just make it accessible. You're 19-year-old, no matter where you are on your phone, you're able to actually connect and listen to that song now. Globalization of music, we'll talk about. Experience economy, we'll talk about. We've heard that for many years now. And this venue infrastructure, this is kind of a new trend we're seeing. But internationally and overall, live music now is becoming like the movie theater of the past. It's the tenant that everyone wants. If you got a development and you're building it, you want foot traffic, you're calling us, you're calling ASM, you're calling developers saying, can you put a 2,000 or 5,000 to 7,000? Everyone wants to build that Atlanta Braves battery or the L.A. Live originally. So we get high demand to say, can you come in and help build, run and put a venue up internationally, where football is -- soccer is the sport of choice. There's lots of stadiums. There's no arenas. So that's why you see us pushing globally this idea that every major city is looking to upgrade, wants to have a great 18,000-seat venue that most bands are going to play at. So infrastructure is being built. As it gets built, bands are touring more and more because there was -- for many years, you just -- you couldn't show up in a lot of markets. There wasn't a place to play. Maybe it was a festival and a green site, but we know when we build infrastructure, the market increases. You take those 5 big core changes that are happening in the business, and we think that structurally elevates this live industry for the next decade plus. And when you ask the fans, is this true? Is it coming to life? You can see it in the surveys when you'd ask fans about the live experience today versus the past, their engagement, their excitement around it, their purchase intent, all comes through in spades when you ask them about how much more engaged they are in music. I'm sure many of you have kids. I got a 13-year-old, a 10- and 8-year-old, 3 boys. They live on how much they should and shouldn't and YouTube and Snap catch them on and TikTok and fake accounts, but then they know music like crazy, right? In the car in the morning, they play DJ, and I'm always amazed the way they'll pick up -- they'll play an ACDC song to a new song. And I'm like, where do you hear that? The YouTuber on YouTube, the discovery on TikTok. So there -- we grew up and we were lucky if we saw a video on MTV and heard it on our radio station. You're 19 today, your discovery is a new level. Plus you're more engaged, you're talking directly. You follow Bad Bunny online. You're a fan of his, you see him on TikTok, you see him on social. So engagement is through the roof. And the good news is it's becoming global. There is no borders in this business anymore. These fans are global. So that 17-year-old in Colombia, in Milan knows that Bad Bunny dropped a single this morning. So they're fans, there's no more gatekeepers to tell them eventually. So they become fans. And we're seeing now whether it's K-pop, Bad Bunny from Columbia, whether it's an Indian artist, if you're on TikTok with a single and it's happening, you can be playing the Greek theater in a few months later. The artists now are traveling faster than ever around the world and so are the fans. And we're starting to see it come to life in our roster. So more and more artists, we expect that are going to be filling stadiums are artists like [indiscernible] and Bad Bunny and all of these artists, K-pops, et cetera, coming from all corners of the Earth able to fill venues. You've probably seen this kind of data for the last few years. It just continually shows where the wallets are being spent, they are spending on experiences, especially live. It's more and more this is where they're spending their dollars versus maybe the products of the past. And I love this chart because I think it just brings this all together, right, all this stuff we've just referred to. These artists today, they are media empires. They're able to build direct brands at such scale never possible before, right? Athletes can't do this. Actors can't do it, but artists can do this. And in the past, they couldn't. They didn't have a direct Instagram. They didn't know they had 100 million followers. They didn't have this kind of data. If you're an artist today, you know your data. You know have 150 million users. You have 22 million in Brazil. So we probably should tour there. We have international. They are media moguls. And our job is actually the easiest job of it. We don't build the demand. We just sell demand through once they build their brand. So you look at something like Bad Bunny with 150 million monthly followers and listeners, at the end of the day, his tour, while a successful tour, we only have 3 million tickets available, can only place so many dates at the end of the day. So the scarcity of what we're doing is almost the easy part of the business because we're going to have no problem selling 3 million tickets to 150 million dedicated fans. So that's why when people say, it's scarcity. Are the consumers pulling back? Do you have pricing opportunity? Well, that chart says it all, right? Of course, you have scarcity of product and demand well beyond capacity. And it's not just the superstars, right? Every artist we meet with now, I meet a young artist and they're playing the Irvine Plaza, they've got 6 million followers. They got 10 million followers. They've got audiences. And maybe they're only selling 400,000 tickets or 10,000 tickets, but the audience is much bigger than ever the ticket sale is. So as they're building their brands, our job is the tail at the end of demand. The good news is, well, that demand is building all of the ways they're engaging. The supply pie is getting bigger. There are more bands on the road. So all of those earlier stories on where would the next Rolling Stones come from people ask for so many years. It's -- they're there. They're in a garage on a computer right now, getting ready to jump into a club somewhere, more bands on the road on a global basis and more bigger bands selling tickets. So supply demand is growing at high pace. And as that earlier theater or earlier club comment I made, I just -- we throw this up because people, again, we all talk about the top end of the business. This is a business that's very distributed. All of our segments are growing: our club, our theater, our midsized stadiums and arenas and globally in all countries. So very vibrant business. If we were the sports league, we'd say the Premier League and your farm teams are growing well. The farm team is on fire. The clubs are full, and they're making their way up. So as long as the bottom is continually growing at that level, they may jump levels, a lot of bands either -- they may start at a mid-level because they get an incredible jump or they may start at a club and jump to arenas, but the stack is full, robust top to bottom. And I think this chart is one of the great charts because this concert ticket, as I say, is global currency. This is -- you hear a lot in the subscription business, this challenge of as they grow internationally, what's the customer in India worth versus in U.S.? You tend not to get that same $9. That doesn't happen in concerts. That Coldplay ticket in Detroit is selling for the same amount right now in Tokyo, same in Argentina and in Europe. So that concert because of that scarcity, we're able to travel anywhere in the world and get that same ticket price, same economics. So international is the same margin. It is the same business. It's not a depleting margin as you get further from the core. It's a globalization of that business because there's only 100 of those dates or 120. So the product is scarce, the ticket is scarce, but the consumer still is abundant and will pay that same price. We look into '24, we don't see any slowdown. We see our show count up double digits coming off, obviously, a record year in '23. So all of that data would come to life and say next year looks strong again. And when you ask customers, again, just so we're not fooling ourselves, I mean 92 say they're going to go to the same or more. So all those questions about, is the stimulus -- are they pulling back? Will they come again with this pent-up demand? And none of this data supports that. This data says this is a way of life, and I want more of it. I love the second page because I always remind my team of this. Only 36% of the population actually went to our show last year. And I always remind my team as big as this business sounds, we only have to sell like 14,000 seats in MSG to sell out a date, right, in a city like New York. So we're actually selling small slivers and big economic models. But when you ask the consumer, 51% of the population says I want to go to a show next year. So any of that idea that there's not more customers coming into the funnel every day, that data kind of helps support it. And we've shown similar slides to this. Again, whenever this recession or whatever the pullback is or isn't, history says live tends to be very durable and one of the places they cut back on last. And again, it's kind of obvious because it is one of the top 3 most important things in their kind of entertainment life. So it's high on their pole. It's actually one of the cheapest though. So why we know the consumer may pull back on Disneyland or buying a washing machine, they're going to go to Jones Beach. That's still a high-value outing for 2 vehicle, 3 people that you can afford and still manage even in downtimes. And this is the support of that. Again, because the press likes to talk about the 9% or the expensive ticket, this is an industry that's overall very affordable. $38 average get-in price, can't get that anywhere for this high quality of an event, 65% under $100. So this is an industry again. Compared to sports, I do it all the time, go buy a Lakers or go buy a Knicks ticket, courtside is $25,000. Even at the highest end, a P1 maybe $400, and that still happens once every 4 years. So this is again incredible great value. Yes, there's at the very top some press around it. But as an industry overall, what's going to make this machine continually work is the fact that it's a completely affordable business from theaters to amphitheaters onward, top to bottom. And Joe is going to get into the detail. We've shown this every year. We like to kind of be very transparent on how we're going to grow the business, what are the levers that matter. These are the levers that are going to grow our business there, the ones we historically have talked about a bit more on Venue Nation today. But Joe now is going to take you through the specifics.

Sorry. So again, these levers, I think, should look pretty familiar. We talk about a pretty similar set every year. I'll walk through each of them, give you a feel for where it is we think we can go and what's our confidence above and beyond the macro that Michael talked about that we think is very strong. One thing I'll note for those of you who pull things out, measure in the analytics, I think it's pretty interesting. If you go back, we added 400-and-change million from last year. If you go back to last year's metrics and look now at our fan count and some of the other metrics, I think you see that it actually lines up very well with the progress that we made this year in terms of those metrics translating into the higher AOI for the year. We'll start with the fan count because that is, as we talk about, where our business begins, how we're growing our business. Now our focus is on how we're getting to 200 million fans. Again, start just on the concert market growth, the macro that we talk about. And then from there, we really see every market as having continued opportunity for us to be adding fans from the clubs up to the stadium level. As we look at the TAM over the next several years across the world, if you think about the developed markets, the North America, Europe, we still have relatively low penetration in the scheme of things. There are a lot of fans out there. We can continue to help build the market, a lot of hyper local strategy that we've talked about going into those specific markets, adding more capacity and bringing more artists into those markets. And the international markets that are developing, those are the ones that we've talked a lot about recently that we think are particularly exciting. Again, a lot of opportunities is we'll start talking about the venue side, where we can be building arenas that don't exist, bring artists into those markets and really help develop them. Then the venue side. This is the biggest opportunity that we'll talk about, $350 million, we think, from a combination of bringing more fans to our buildings and making more money with those fans when they come to our buildings. We have a great portfolio now. And let me start by saying we don't think this is -- this isn't a dramatic change to how we're deploying capital to what our balance sheet looks like, to what our overall business is. What we've done during COVID and coming out is we've broken up what was historically within, one, the promoter and the running of the venue to say, these are specialized skills but separate them. Let's bring different people with different skill sets to run them. We've seen the strong results on both sides of the business in terms of driving volume on the show count and driving the performance at our buildings. Then let's take what we're doing well, where we can earn good returns from our capital on and let's continue to do more of that. So that's 2 things, maybe 3 things depending on how you want to look at it when it comes to our portfolio of buildings. U.S., North America, a big opportunity in 3,000- to 6,000-capacity theaters. We announced the Paramount here in Brooklyn. That's opening next year. We've got a big project going on down in Nashville that's been announced, 7 or 8 others that we're in advanced stages of that we think we can build out. North America, large theater continue to expand that market in a lot of cities. Second is international. This is now more the arena-type. Taking from a U.S. view, what we've done in Austin, taking that internationally. We have that with Ziggo Dome with the Copenhagen arena with a few spots. AG did it with the O2, buildings that are not expensive, NBA-type, billion-dollar buildings, a few hundred million dollars, go in and create some fantastic arenas that can be used to help build the market drives our TAM, drives our activity. Third, related in terms of opportunities in addition to building in some cases, we're going to buy them. So in Portugal, again, that's been in the press that we're looking. We're buying the arena there already established. We can go in. We can -- we think with relatively incremental capital, we can do a lot to drive the performance of that building. So those are the streams of activity. It's going to drive a lot of our economics. I'll come to the capital in a bit. But it's obviously, it's where we're deploying a lot of the capital. The 2 things do go hand in hand. If you want to continue to drive your business double digits growth, you're going to have to put some money into it to do it. So we're not apologetic about that. We'll go into a little more detail on how we're thinking about what the priorities are and how we're going to do that. And then as I said, the other half is, so how are we doing at the venues? How are we continuing to make more out of the fan experience that we have? Goes back to '17. When we started this, we were getting a $16 average revenue per fan back 10 years ago. Now we're over $40 in our amphitheaters. Still, we look at a high-performing arena. That's over $60. Some of our great festivals like BottleRock well over $100. So we think there's more to go. I mean, there's a couple of ways that we're doing it. There are a few situations every year where the building is old, was developed at a time when it was all GA, all state fair experience, and there's an opportunity for relatively modest but material investment to get that up. So we have 20% of it is VIP, and you're really driving at the high end. We're doing that with Jones Beach here right now, where we're undergoing a fundamental revamp of Jones Beach as we sign a new long-term lease. Makes sense to invest the capital, you get a great return on that. We're doing that next year with [indiscernible] down in Mexico City, 2.5 million fans a year, largest music built venue in the world. You can spend money there, and you can very quickly get a very attractive return. And then the second is, yes, we have the network of 50 amphitheaters. And there are things we can do better with rock boxes, with viewing platforms, with VIP clubs, with enhancing the food and beverage offer, a number of tactical things that we can do. Between the two, we think we continue to drive forward and grow that average per fan spending at the buildings. The other piece that we've talked about in the past and we'll continue to talk about as long as there's an opportunity, it's how do we optimize the growth of the show? How do we help the artist figure out how they get the most value from their IP, if I want to steal from what Greg was talking about this morning with IP. So number one is fewer than 5% of our shows sell out. The 35 million tickets a year that don't sell, they are worthless because they didn't sell. It's 20% of our inventory. That's what -- this is what a lot of shows look like. These blue dots are the tickets that didn't sell at the onset. The show has tended to sell fairly front to back. So it's our job as the promoter to figure out how do we help that artist sell all these tickets. Do we have the right pricing? Do we have the right promotions? Do we have the right marketing? What do we need to do to continue to be more effective at selling these tickets? As Michael said, 2/3 of our tickets are under $100. So a lot of the value in these tickets is, frankly, getting the fans in the building and getting that $40 average per fan revenue on top of the ticket price that you're getting. And then the other half is yes. We continue all the press notwithstanding to see that there are a lot of tickets that are underpriced relative to their market value. This chart is a little complicated, but I thought it was pretty compelling when we look across type of artists, you look across building types to give you the first one. The hip-hop artist, last tour in gray, current tour in red. Last tour, $110 ticket price, went up $243. So it went up $133. In the secondary, those same tickets, we use like-for-like tickets here, was $184 last time, $453 this time, so $270 increase. So your gap between your primary and secondary value even as the artist double the price of their ticket, the gap doubled relative to what it was last time. And you go through every single one of these examples, increase in primary less than increase in secondary, increase in primary less than secondary. These are amphitheaters where you tend to be lower-priced tickets, but you see the same story consistently. So we're big believers. We're here to help the artists figure out what they want to do with their IP, how they want to get the value out of it. They want to maximize it as close to market value as they want. You can see here, they're not actually generally maximizing it against the market value. They're simply capturing more of the money, taking that away from scalpers and working with us to figure out how to get those tickets sold to fans. So again, the delta, we simply look at it is the delta between primary and secondary is the artist opportunity, which is their partners we participate in is over time, we continue to work with them to help them get what we think they deserve. Going on to sponsorship and we've got a number of sponsorship folks here in the room who can also answer questions during Q&A or after. But like this one is pretty straightforward. At 140 million fans, we've got a huge on-site platform that they're selling sponsors, how they can reach the fans. With 600 million tickets moving through the Ticketmaster platform, they have a huge online platform they can amplify. They've got a tremendous track record of growing this double digits over the past several years. Just did a great job with Mastercard, working with them now in 19 countries internationally, a great new program that's launching next year. And we continue to see this as being a double-digit growth business for some period. And then ticketing. Ticketing has had a line. It looks pretty similar, I think, to our concert line. 90% of the growth over the past couple of years has come from concerts globally, not just Live Nation but all concerts as the entire industry has been on fire. And when we think about how they're going to grow now from roughly 320 million tickets this year to 400 million tickets, first as Live Nation grows, globally, about 80% of those tickets end up on a Ticketmaster platform. So you have some natural growth that comes as we're building our Live Nation. Importantly, some of those tickets are helpful in a lot of the international markets, where you have split allocations between venues and promoters. Then when Live Nation's the promoter and Ticketmaster can use those tickets, it helps Ticketmaster get established in markets, build their share, build their brand, puts them in a more competitive position to go win new business. It's been a huge success in Germany, in Spain, in Italy. We expect that to continue with more market penetration where they're underpenetrated relative to some of the more established markets. And as we go into new markets, those are opportunities for us throughout Latin America, throughout Asia. Then the other piece that we've started talking about is this nonservice fee. So Ticketmaster primary job is selling the ticket. The second is how does it use its platform to make money in ways that aren't tied to the specific service fee? Ballpark, it's 2 real things. One, it's tied in with sponsorship. How do we create the ad units? How do we think about what is there along the journey that we can sell or we can monetize the fan relationship, let's say. So every product they come up with, whether it's the rock ad unit afterwards, the insurance, the upsell to VIP parking, any of those things as a sponsorship team and ticketing team work together to think about how do you maximize that flow. Secondly is Ticketmaster is getting a lot of data, getting a lot of understanding. How does it use the information it's gathering, the data analytics to sell more services to the venues, to the promoters, to anybody putting on a show? And that's another way that they've been successful, particularly coming out of COVID and helping sell those opportunities and raising more money or making more money at Ticketmaster. So then what everybody asks, okay, that's great. You guys are going to grow double digits, but can you also just return a lot of capital to shareholders? So this is roughly, as we think about it, the title was carefully thought. It's deploying capital to drive growth. So as we think about driving growth, this is roughly the sequence in terms of the order that we think about. The first thing is how do we strategically continue to drive our business. I'll step back. If you look at our -- we have capital to deploy in 2 ways, right? One is our current balance sheet. The other is our cash generation. So historically, we've tried to maintain debt ratios, gross debt between 3.5 and 4. We're on the high side of that right now, but fine. It's coming out of COVID with the debt we had to take on. So we're not seeing our balance sheet as something that we're going to dive in and do a lot on, particularly not right now. Cash flow, you guys, consensus has us close to $2 billion next year, mid-60s conversion. So you have $1 billion and change of cash, right? Just as you're sitting here planning out what are you doing next year. So we work through these categories, menu portfolio expansion. So I talked through those. You've got these large theaters in the U.S. It's $150 million-ish. You've got arenas internationally you're building. That could be same or even a little more depending on the timing of when those come. You buy some venues. Bigger venues are going to be high tens of millions. Maybe you spend a couple of hundred million between some large venues and some smaller ones there. So you're deploying a large portion of your capital there. You've got your existing venue. As I said, we got the major remodel projects, the Jones Beaches, the Forest of Souls. And then you have a lot of tactical improvements you're making across your portfolio of 50 amphitheaters, of 100 clubs and your festivals. So you've got another $120 million, $150 million there. Ticketmaster product. Again, we just talked about nonservice fee revenues. We talked about a lot of things going on with sponsorship. You've got to double agenda with Ticketmaster. One is how do we continue to improve the on-sale experience? How do we continue to improve the product? How do we improve customer service? How do we also deliver a more effective marketing platform that Russell and Chris and the team in sponsorship can sell against? So that might be $100 million-ish CapEx and new market M&A. You want to go into Asia, you want to go into Latin America depending on the opportunities. We don't rush the deals, but that could be in the tens of millions to a couple of hundred million just depending on what opportunities come up. All of these opportunities being accretive, all of them having the opportunity to be another OCESA where we hit a home run by turning our firehose on that and building the business. And then finally, you've got some put call obligations. As you guys all know, when we go in and we buy a business, we're generally buying between 51% to 70% of that business, keeping the entrepreneur engaged, giving them a put call after 5 years, 7 years, 8 years, so they have an opportunity to get all of their money out because they're ceding control to us, but we keep them engaged in building the business. So you're going to have some obligations there. Next year, not too bad, but also setting up for OCESA obligations that start to come due in '25 and '26, which you guys know what we paid for OCESA. We've talked a lot about how well it's doing. So it's a large put call that comes at that point. So you add all these things together, and you start to understand is we're planning out next year saying, okay, so there's $1 billion-ish that we can pretty easily see that we're spending to drive growth in the business that we think consistently has very attractive returns, sets us up for compounding that future growth, because growth is not something you start and stop. Growth is a path that you go on. So we believe we can drive that growth by spending this money. Now this is something that Michael and I sit down, we reassess it formally quarterly. We go really deep every year when we're doing the budgeting process and asking ourselves what we're going to do. And clearly, in today's environment, we need to stay on top of. We're not religious about anything. We're not religious about not returning cash to shareholders. We're just fervent believers that the best way to serve shareholders is to grow the business in a profitable manner with judicious investments that have high returns and keep that machine going and moving forward. So that's the summary. I think, Amy, we're happy to take questions from anybody has them, right?

Okay. We're going to start with our sell-side analysts first, and then we'll open it up to the rest of the audience. I'm going to go with David Karnovsky.

Joe, since you highlighted venue expansion, I'll ask one there. Historically, you guys have focused on, I guess, from the growth perspective, your amps because the per caps are really good, your footprints in theaters and clubs. You shied away from arenas. You started to do that now, and I get it, it's internationally, but why is that a good opportunity? What changed just given the size of those projects?

Yes.

I'll jump in quickly. So the core to growing your business is, we've always said there's 100 cities you want to be in. It's a city strategy more than anything else. And if you look at Live Nation's history, the amphitheater was a big part of what drove that city success. Ron Delsener in New York, having Jones Beach was a big part of why his business did well, and he was able to expand it. Most of the promoters we consolidate around America had that amphitheater. When you go international, if you're just buying the promoter in the market and he doesn't have ancillary revenues, it's a little longer to get to a good profitable path. So you always like to figure out how you have -- in any city, you want to have a great promoter. You want to have some real estate. That real estate probably is the reason you're going to launch ticketing. It's going to excel your sponsorship business. So it becomes a real anchor to saying, how do you get that market to a $5 million or $6 million concert business or I'm in the $30 million or $40 million business. So international, as we're expanding for many years -- and when I lived in London, we kind of -- the system was by the promoter that had the big festival. That was kind of as close as you got to real estate, and that dominated for many years. So while we bought Denis Desmond and Mean Fiddler and big promoter in Belgium, on Werchter festival in Leuven and in Holland on the MOJO festivals, that's pretty much who we were buying, because that was the best ancillary revenue model for us to grow on. Over time, though, as we kind of built our venue development, our venue management business here, we started to realize that the opportunity international for the arena. We had one in Dublin for a long time. We've had one in Amsterdam. We sort of realized there really was a white space, and we were missing out completely as a core competency. It's one of the biggest things we realized. We were getting the call after the OVG and the ASM or the Legends went into the up market, won the arena and then called us and said, hey, can you come to that last meeting and talk about putting shows in there to help validate our business model. We actually realized much like here, we should be building that venue, running it and filling it with our content and others. So as we kind of look through COVID and brought our venue management business together, we really realized the piece we were missing that was the big growth unlock was being able to run these venues. And OVG did a kind of a master class in training me on that, on the -- in the Austin arena, although it was America, it's kind of the only city left that didn't have a real arena. We partnered with them on that, built it together, funded it. I think I've used this math before. It was a $350-ish million venue. We required a $75 million equity check. The estimate was low financed. We sold sponsorship, premium seats 2 years in advance. Didn't even write the $75 million check. That is turning a 30-plus percent IRR right now. So we know you can -- if you can have a big venue and arena, an amphitheater in a major market, you're trying to build your total business, that's the best way to jump fast and excel your overall business. So that's what we looked at as. And as anything, since we started this company 16 years ago, it's always been what's taken us to the next level, right? When I started this, we made $30 million, $40 million on amphitheaters. We said we have to own -- we have to be a sponsorship company. And I launched that with Russell. And we became a great sponsorship business now, and that was a whole new lever we started that now is obviously very profitable. Then it was about really we needed to be a ticketing business. We launched our own ticketing then bought Ticketmaster to own the customer and realized that was a big. And as we spent the last 3 years what's our next lever? Where do we keep going with this company? How do we keep finding the growth? Venue ownership management, especially international as our growth of our concert business, that looked like the great new opportunity for us. So that's where we're kind of going to put the next level of growth down. I think that's the next leg on the stool. It's opportunistic.

Yes. I was -- Stephen Glagola, TD Cowen. I had a question on, is there a limit to your venue expansion in North America, particularly in the United States, given that you are vertically integrated across the value chain? And I know that there's like 4,000 some venues out there. You have a small subset of them today. But worries that you could trigger more regulatory scrutiny on your business if you take your venues to do too much of a degree.

Yes. It wouldn't be regulatory, although it's always part you have to manage. Now we've always looked at America as not a huge venue opportunity, because in America, it was -- for so many years, it was being overbuilt by the sports business. Most cities now have an NBA, an NHL, the Major League Baseball, the football, probably the old building, too, like the forum. So we never looked at America as being somewhere where we could probably even -- we don't even have any -- added many amphitheaters historically, because we really weren't able to build a lot of them anymore at the right price, so they were always built way out of town. So we always thought America was really just more of a 5,000-seat, 4,000 tuck-in, bolt-in strategy where you have a nice market. And if you can do a paramount, not a long-term big growth plan in the U.S., both the Canada a little differently because we had nothing there. But we really look at -- we've always thought internationally, in general, would be the opportunity where you don't have that NBA, NFL, NHL, MLB infrastructure built. So in America, we're best friends with MSG and the sports guy filling their buildings. I don't need to compete.

For Michael, I was wondering if you could speak a little bit more about the mindset of the artist and maybe how that's changed over the last 5 years? You mentioned a lot of these secular trends, globalization of music, social media, the supply of the market increasing and demand that tap into increasing as well. How do you expect that to translate into the supply year-to-year of artist touring and the amount of available inventory to sell on an annual basis going forward, looking 3, 5, 10 years out?

Yes. I think we've had this thesis for many years, and it's -- I think it holds true and is stronger than ever that we believe Live was going to become the center of the wheel from an economic perspective for the artist, certainly has happened. They're not making much money on the Spotify. It's obviously where their arts distributed, but the road is where they're making fans and economic returns. So we think now that they absolutely understand who their customer base is, a story I talk about when they say I got all these fans in Brazil, they didn't know that for years. That means now they want to go tour in Brazil because the artist does know when they get on stage, they make fans for life live, make fans for life on a stream. So every artist we see from young to old still has that dream to be the Rolling Stones, sell out stadiums, make a ton of money and also reach as many fans as they can because they know from there, they can sell merchandise, they can build all of their ancillary businesses. So while they have all these great promotional tools, they're brand direct, they want to all have their own lip liner or some version of a product that's going to make them rich and they should, because they have the power of the medium, they know live is the part that keeps the entire machine moving. So we're excited about that.

Okay, great. Behind the pole here. So I'm curious, there was a transaction kind of around your sector, Legends buying ASM. And I was just wondering if you could talk a little bit about some thoughts about the meaning of that in terms of does it mean anything competitively? Is it some validation of your strategy? Is there a valuation benchmark there? Any thoughts about that, that is relevant for you guys?

Yes. I don't know. I don't know a ton about it. I've heard some of the financials. I think it's -- I think your point is valid. I thought it was a great validation that Sixth Street, who I met with, are all in on the idea that Live is a great industry and venues and premium from what they've told me. So Legend is a pretty good premium business that spends a lot of time international. ASM is a venue management business. So the idea that they would put that -- those billions to work to bring them together to be a global hospitality venue company, I think, talked about everything I've kind of reiterated today that we think there's a big global opportunity out there in venue management and premium. So we compete, but the landscape is large, right? So yes, we're always -- if there's an RFP for a new arena in Vienna, we're competing ASM, CTS, the 3 or 4 are always going to be there bidding on it. Whoever's got the best overall product will win. So still kind of the same competitor because ASM was kind of what -- the core of what we were doing on venue development. But I think it validates it, and I think they've done a good job with Legends. We were shareholders in Legends and did well.

David Joyce with Seaport Research. Drilling down on the international opportunity. A couple of things. One can, you help us understand how much of the AOI growth has come from the development of the infrastructure, these venues and the localization that turns to globalization of the artists? And related to that, what are you doing on the Artist Nation front to help develop these new artists in these regions that because of social media, what have you, can then leap up to the global stage?

You had the first part?

Yes. I don't think we've broken out specifically what the economic mix has been. What we have said is that the economic -- Michael showed it earlier, the economics of doing a Coldplay show in L.A., Milan or Buenos Aires is the same. So those fans are generally going to have the same value in a concert. The sponsorship team for the festivals, for the buildings we operate, will tend to drive similar economics on the sponsorship side as well. So -- and a lot of our growth has been coming from international, some of which has been from the addition of OCESA, some of which has just been the big push into Latin America, continued push in Asia. So we haven't broken it out. I would expect it to increase going forward as we put more venues there since the economics are more attractive when it's our fans in our buildings, which has been disproportionately U.S. North America-based if you just look at where our theaters and clubs are. The amphitheater base, it's tend to be skewed more in North America. And I think that will shift as we do more of this arena and development internationally.

We go with Brandon Ross.

On a lot of this international growth stuff, you've talked mostly about bringing more artists abroad and the venue development. One thing we haven't heard much about is Ticketmaster. So I was just curious, I know you went through that globalization project a couple of years ago during COVID. What are the real tailwinds on Ticketmaster? And what additional opportunities internationally are being unlocked there?

Yes. In part, we didn't talk about it as much, because I feel like a little bit of a broken record, because I think for the past 1.5 years, every quarter, I don't remember the exact numbers ended up being last year. But Ticketmaster added 24 million net new tickets, 70% internationally. And this year, it was about 17 million, majority are international. So I feel like we've been saying pretty consistently coming out of COVID, every quarter, a benefit of moving to a single global platform is we have taken a lot of the capabilities of our North America platform, delivered it globally. That feature set matters a lot in the international markets, which, in some cases, are less sophisticated. That's helped drive a lot of Ticketmaster growth. I mean, you clearly see in the Ticketmaster financials, they've done tremendously well, because they've continued -- and you've also seen the volume of tickets, both fee-bearing and non fee-bearing that are going through their system. And that's -- so the volume tickets is driven through to the bottom line and heavily because of the international growth.

Cameron Mansson-Perrone from Morgan Stanley. I'd like to hear a little bit more about the international opportunity is obviously big, exciting. OCESA's doing well. How do you think about in a way the efficacy of investment in leaning more into Latin America versus spending to enter markets that you're not in and scale today? And then just anything on the characteristics generally that you look for when you're thinking about a new market entry? And what would make it exciting or a priority?

You're asking us about -- say that again about Latin America, ex Mexico, you're saying.

Whether it's you view a more exciting opportunity? Or how you think about the way the opportunity of leaning more into Latin America versus spending the investment that you would make doing that by entering a new market and scale?

Yes. We think Latin America is a huge opportunity. Brazil is where we're spending a lot of time, because we got some of the blocks down about Rock in Rio, obviously. We launched Live Nation Concert company there. We just launched Ticketmaster there, did our first festival, sold out instantly a few hundred thousand tickets on the town, big festival in Sao Paulo. We looked at some venue development in that market. So we think that Brazil is a huge $300 million, $400 million kind of business you can build to. So big market. But part of our touring strategy is we've always wanted to be kind of have a franchise store in all of these markets. So when you -- we're doing Coldplay in Argentina for 10 nights. We have a great business there. And a lot of those markets, we looked at Colombia. We're looking at all of them where they don't have an arena. And if you're the only arena in town, you're going to have a really good business in that -- in those major cities. So we think coming off OCESA, our strength in Brazil and now the internationalization of the artist, Latin America is going to be a big priority and a big growth area for us.

You're clearly in a sweet spot of having a lot of people, a very engaged audience that want to go to your events. So can you just talk about the pricing power of your sponsorship unit now that you're driving so many fans to your events?

We give it to Russell?

Russell Wallach runs global sponsorship business for us.

Yes. Look, we're continuing to see tremendous growth everywhere in the world from a sponsorship standpoint. We know our assets are wildly exciting to brands. One of the great things that we have versus sports, which we talk about all the time, is the diversity of our audience. Half our audience is women. We've got a host of festivals and things that target Latin audiences, black audiences. So we're able to provide brands things that they actually can't get in sports. So yes, so everywhere we go, Brazil, Michael talked about, one of the biggest sponsorship markets in the world. Germany, U.K., Australia, we're seeing big growth in Asia. So yes, really everywhere, we're seeing continued excitement for the products we're putting out there.

And we just met upstairs on the '24 business plan. And it was the first time, Russell, we met where you really are showing how the globalization is happening, right? We're not -- we used to sell -- it used to be a regional business and a local and then you try to make it a national then a little bit of international. And now this globalization is working where I just mentioned that, how you're talking of Coke about not [indiscernible] anymore.

That's a great -- yes. So we're doing -- Coke's a great example, Anheuser-Busch. We're working with them in multiple markets around the world. So Coca-Cola sponsors a number of our Lollapaloozas in South America. They're involved with our Lollapalooza in India, across Europe. So we're seeing more and more brands interested in taking our platform from the U.S. and extending that to other territories around the world. We're also doing a really solid job of taking products that we're building here in the U.S. and giving those products to our sponsorship teams around the world. The other thing you talked about OCESA. They've got one of the best sponsorship teams in the world. We spent a lot of time with those guys, huge opportunity on the digital side. So now we're working closely with them to build the digital business there. They're the best in the world at selling festival sponsorship venues, ticket access. So we're using some of our skill set here to transfer that to some of these key regions where there's already great teams.

And it's really unique, right, because as a property, most of it is U.S. sports. You got to do a U.S. deal other than the Olympics and kind of FIFA World Cup. It's really seldom that a property as a CMO, you can sit down with and talk about some global ideas. So we are that real unique opportunity for them.

Great. We're going to go back to David Karnovsky, and then take questions from the general audience.

I guess since it's come full circle, I'll ask a regulatory one. So Michael, Joe, you guys have talked about the DOJ looking at discrete business practices as you've turned it and not the structure of the company. So I wanted to see if you would expand on that a bit? And then assuming something like exclusivity, for instance, was an issue. Have you looked at your structure and said, okay, if we were nonexclusive with some of our venues on the booking side, on a ticketing, open allocation side, have you looked at the impact of that potentially?

Yes. Not a lot has changed in the last week, I'll say. And a lot of this continues to be trying to read tea leaves based on what we hear or our impressions. So nothing particularly concrete. We hear things oftentimes through the press as you guys do, and we try to figure them out. We saw some of the points about the venues and exclusivity on venues. What I'd say on that one is as we separated our promotion business from our venue business and both excelled, trust me, our venue guys for the past year have been saying, why do I -- why can I only be open for the -- those promoters? I'm making $40 a head now. I'm not making $16 a head. I can make as much money as they can make. Just let me drive utilization. So I don't -- that particular point, I think, is one that large portion of our organization are pushing forward today independent of anything that would be going on elsewhere.

And I'll just jump on a strategy point on that. If you work for me, look, I'm not a synergy guy at all. I hate that word. We don't work in that world. So I have one of the smallest head offices you're probably going to find for a big company. We are really decentralized. So I always look at our company is saying, how do you decentralize and make a business out of a piece of the business. So when I look at sponsorship, I think of that as the largest sport -- the largest entertainment agency in the world that stands on its own. Venue Nation will stand on its own. My festival division, C3, is a festival company on its own, the concert. So we don't have a lot of synergy on purpose, because great leadership usually means I want my own pie, I want to run it, and I want to build it my way, and I want strategic support and resources from head office. So I say all that and there's probably a belief that this intertwining thread is really important to the existence of the overall. These are strong businesses that are going to operate well on their own. And the intertwine that maybe the conspiracists put together probably doesn't exist or isn't as precious to us as one would think. So we're very -- we've mapped out all versions. We think our business model is absolutely defendable. We think given the artists are making 90-plus percent of the door, they're doing well. We're really dumb monopoly as we say, because we haven't figured out the economic part. But we believe that there is no intertwine magic here that we wouldn't be able to adjust some business practices and still be a really good company. And we -- and I really push my team all the time because I don't want Ticketmaster reliant on this side. I want to be a great ticketing company that can win on their own. And the promoter should win the tour on their own, not because they have a venue company. So I've always operated that way because otherwise, they'll draft off different P&Ls and not be great at something. So you are right. We look at it on -- we don't care about long-term contracts and ticketing. We probably don't care about exclusive in ticketing, exclusive in venues. There's lots of things that I think the world will change around. We think we're the best in the world at what we do, and we'll continue to grow our business. So we're not worried about any of those kind of ramifications that could play out whatever they may be.

[ Craig Melker ], Tutor. This morning, John and Greg talked a few times about potentially using their Liberty Live tracker to do something in real estate, something that could be additive or I guess I won't say synergistic, but helpful to your portfolio. How do you see that playing out? What do you think they could do in real estate that you might not be able to do yourself?

Well, listen, I'm proud that they like our strategy, right? John's a smart man. So is Greg. They're a large shareholder. I said at Sun Valley this year. I sat beside John. He said, I love your real estate strategy. We should do more of that. That's kind of like I'm going to go home now. I've won my piece. So yes, I think John and I talked, as Greg, I think they have full belief that there's a great venue strategy at play here. So I don't -- when I say to them, what are you going to do with Live? I hope they buy some assets that are synergistic to us that give us opportunistic options in the future versus a bowling alley or something else, right? So I'm thrilled that John and Greg endorse our strategy enough to think they may use some of their own capital in Live to do it on their end.

Michael, I think on a podcast maybe like a year ago or so, you said a major trend you were seeing was more artists booking national, global tours versus local. And I was surprised, you gave a stat I think still like 75% of artists are booked locally. Like why is that happening still? And what do you -- over the next 5 years, 10 years, how do you see that tailwind benefiting your business?

Yes. Listen, we know a lot of the noise that makes its way to the regulators is this is a bit of a hardware store in Walmart, right? There's the local promoter that wants the world to stay the same. And that still is in existence on a global basis. And an agent's job is to wake up every day and call a local promoter, call AEG and call us and make sure that there's a competitive bid and get the best price. So we still see locally club level, local buys. There's a big piece of the business that the artist and the agent and the manager still will sell off. But yes, trend data started with really 1990 with Michael Cole and the Rolling Stones was the first time someone bought a world tour. And it was considered the end of the world to the local promoter and Bill Gray and all that legacy that went with that. Then slowly, artists started to go, maybe I should have one partner, looks like I got one record label. I might want to have one idea. So that started that trend, and maybe I'll sell you just the U.S. or maybe I'll sell you global. And that was really the rise of Live Nation and AEG. So you're now looking 15 years later, we're probably all buying somewhere in the 70 tours globally or nationally are bought by somebody from 0, 10, 15 years ago. So it's moving in that direction. And probably every new artist that's developed or every new manager probably wakes up and says, I should make one phone call with my agent and find a global partner. Some of the historic promoter or historic managers or artists maybe have some more relationships they're holding on to. So we think it's the future. I think -- I don't think it's ever all the way there. I think there's always why we always say we're a local and national company. We have 100 offices in 40 countries. And that local job is to execute Coldplay when they're in town and go hunt and acquire local tours or local dates for the local venues. So we think it's a combination on scale. It's still way local versus global. On quality, it's probably touring versus local. I think over time, it continues to trend on a global basis. But I think it's still a 50-50 business in the end. So it's why we actually can't just be a central company. We've always prided. We can't just have a global central buying department that buys. We got to actually have feet on the ground in market that can execute. And while you're executing that global tour, you're buying local talent, too, to fill your pipe, so a dual combination you have to build out.

Angela Simonton from ClearBridge. I was wondering if you could maybe talk a little bit about the nonfee-bearing ticketing revenue and maybe what the composition looks like today between the consumer-facing revenue and the revenue that is facing the artist, events, venues? And then kind of going forward, how you see that composition evolving as the big driver sort of the venue, promoter, artist piece? How is the consumer piece kind of growing and kind of maybe you laid out a lot of buckets within that? What are like the top 2 or 3 of those biggest buckets that will be driving that?

I'll start, and then Joe will fill in. We do think of the business kind of like an enterprise business and then a consumer business, right? That's how we kind of run it internally. So we've always been pushing Ticketmaster to be much more of an enterprise platform. And they wake up every day and say, I got to go get a customer to use my platform, a venue and depending on what size of the venue. Our goal should be, which has been now moving in that direction, was when you get that customer and you deliver that Ticketmaster platform, what other products can I sell that customer, because I have data, I have analytics, I have capacity. So on the enterprise center nonfee-bearing tickets, we've had some great upgrades the last couple of years based around our analytic pricing models. We're able to charge for that. So that's kind of our first step forward in the enterprise side. The consumer side, we started a while ago with our ticket insurance. And that side is the biggest side because it's just scalable, right? If we launch our travel company there, we're testing that right now. You have such scale on that side that you can really build. So we look at it in 2 different buckets, what products can we deliver on the enterprise with someone will pay for and then what new products can we drop on the consumer side. I don't know what we've said out loud.

Yes. We haven't broken it down for competitive reasons. We don't really want to give -- notwithstanding the press, there are a lot of ticketing competitors out there who'd like to have our exact economics and breakdowns. So we're not doing that. The only thing I'd add on the consumer side, and this goes back to what we were just talking about with the team, right, before this meeting is Russell and Chris have developed, I mean, they've got the 8 consumer products now that how am I using the digital ticket, how am I using the checkout process, all of these products, how do I scale them all from small to medium, from medium to large to continue to drive that number. So a lot of the brains behind that is actually in our sponsorship organization is thinking about, okay, how am I going to help a brand connect with a fan on that Ticketmaster platform that we can extract some money from.

Not very specific, but at least strategically we're giving you -- it's a huge -- it's been a great priority and really impressive numbers. You mentioned regulatory. I'll just say to talk about the legislative side just so we're clear and everyone kind of knows where we stand there. I was -- [indiscernible] we dropped this morning, it was a year ago, backstage talking -- drama. So we've learned a lot in a year. We better have a better government relations department. So we've skilled -- staffed up our Washington presence. We've spent a lot of time, Joe and I, meeting legislators. It's been interesting. So I would say this, the good news and the bad news. The reality is a year later, there's not much legislation that really gets done in the end, as we all know. So we had dreams earlier that maybe we could convince regulators that the challenges in our business that are most pressing tend to be around on-sell and a scalper, right? The circle we go through every day, the unhappy customer that maybe blames us or me in my inbox is I'm Olivia fan. I want a ticket. We're already starting with some crazy demand supply problem as that chart showed you, right? 7 million fans want 700,000 tickets. So no matter what you do on-sell, you're pissing off 6 million young fans that can't get a ticket. And they listen to every song, and they follow them. So that's never easy, and that's why any ticketing company, whoever you are, is probably always going to have an NPR score that's tough, right? It's a tough business to tell anybody you can't get in the party. The second problem, though, and that would be one problem. If we could just do -- and we're doing better and better at transparency and how many tickets and you're in line and all those things, they're still unhappy they can't get a ticket. What they really get mad about though is at 10:01, why is there 10 pages of scalpers selling $2,000 tickets? Now I don't trust the system. I think you, Ticketmaster, must have actually delivered the tickets at 10. You didn't give them to me, and I'm mad at you. And that's the circle we go in, right? Then you try to explain, trust me, I wish we could and I wish we had better bot control. I wish it wasn't industrialized and professionalized, but we can't get legislation. We can't get anyone to talk about and really deal with that, because in America, that idea that the ticket is free and who owns it and it's really transferable, we go through this kind of this mess. We had visions a couple of years ago that a digital ticket could help us, right? Because when you go from a barcode to digital, if you can put some control in place, so an artist could be able to say, you know what, I don't want my ticket transferred or you can transfer it, but like I'm doing on Tyler Childers, it's face value. Or you know what, put a 20% cap on it, make some money, but let's not, let's be fair to the artists who didn't charge market and wants the fan to get it at the right price. Let's preserve that. We haven't been able to get any of that stuff really done. We fight every state some level of a scalper lobbyist that's gone to Congress and state doing the anti transfer bill. They're very, very scared that the ticket has any restrictions on it because they want it freely transferred. So the good news is, a year later, there's no legislation in any state that worries us at all. Most of it is around all-in pricing. We jumped ahead this year. We've decided through our Taylor and our last year experience, we've got to do a better job of leading and jumping out on things like no merch cut in our venues, all-in pricing. We'll have a few more policies will roll out. So all in pricing, we're ahead of that. Hopefully, they industrialize that everywhere. That's good for the industry. We hope they put some more teeth around a bot act, spec selling, some of the fringe stuff they may get done. Different bills come and go. So that's all we really see legislative-wise. Probably won't get any real dream of stopping bots or stopping scalpers or limiting. But they're nipping at the heels. I think we've done a good job educating this year. And when you walk in, they have this perception on how the business is run. Thankfully, you can deal with their staff and they understand, oh, I see, the artist doesn't, the scalper -- the -- oh, I understand. The venue sets the service fee, not you, this. So we've done a good job educating all year, and that's probably been our best skill at making sure that a bill that's rooted in kind of a conspiracy versus fact doesn't get passed through. So we're not really -- we were very in tune with every state, federal, could be bill that's brewing around and all of it is supportive around when we launched our FAIR Ticketing Act as a way to kind of say, here's what we stand for. So we don't see any legislation, national or state by state that we'll do anything that our business that we wouldn't be aligned to.

I just wanted to follow up [indiscernible]. You set the paradigm with Pearl Jam right before the pandemic about having tickets that are capped on the resale market. So it's -- clearly, there's an ability to do that from a state-by-state perspective. Why aren't more artists doing that? And is it incumbent on the promoter to help the artists to make the fans think the system isn't rigged by implementing those sort of things?

Yes. I think the artist's job is to do what they do best, right, write great songs and perform. They're pretty smart to think this looks pretty hot.

But they're brand builders also, right?

Yes. But I think they're also -- Zach Bryan tried it, tried to do no transfer. I think he kind of -- the world of dressed up bots and scalpers and who hits you on Twitter, who takes -- there's lots of noise out there, right? And the noise isn't coming from the good side. So I think the tools are out there. We think face value exchange is a big idea, because it gives artists a real credible way to say, we're not against transferring or reselling the tickets. That's a big difference than don't resell my ticket. Tyler Childers we just did is great. If you can't go and you want to resell it, you want to -- great, we should give you a place to do it. We like that platform, because it still talks about an exchange. We're not limiting anyone's ability to give it to your grandmother or your sister or all those theories that they come up with and why nontransfer is bad. So I think you'll see more of that come because it doesn't have that -- it doesn't come with that baggage of now I'm really saying it's not transferable. And then the nontransferable just creates this great talking point that the other side gets to you and says, now I can't give it to my sister. I'm sick, my God. So transferability is a good thing. We think transferability with pricing on it, limits would be great for the artist and fan. But we'll start at face value as a good foundational tool, that's those who want to do it.

Yes. It seems like that kind of is the middle ground that no one could argue with, except the scalpers.

And also, the other thing we've noticed that you've seen this year, and it's the artist is starting to price it a little smarter. I mean, it comes with some baggage. You're all going to live a little bit of the press on that for that 9%. But if any of us could sing and dance like these artists, you wouldn't be letting those front rows go to the secondary provider while you're charging way under market. So they're getting smarter at, okay, let's increase the front row. Now the biggest strategy we always talk about the artist isn't about increase the front row. It's make sure there's no blue dots. The best way it will make blue dots is lower the price on the back end. So your gross is still the same, but be smarter about pricing the front a little bit so you can subsidize the back, so you get a full house. That's the magic of the game of dynamic pricing, not -- most people only talk about the front-end part of it, but it gives you great flexibility to price the house better and get a complete sellout.

All right. Thank you, guys for being open the bar. Everybody's going to be around for a while. Russell, Chris, a bunch of people from the sponsorship team are here if you want to talk to them. John Reed, who runs our European concerts business, so I know we talked a lot about international. So if any of you guys want to hear something about international from a guy without American accent, you can talk to John over there. But we'll be around for a while as well. Thank you.