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

All right. Good afternoon. Let's get started. On behalf of our President and CEO, Michael Rapino; our President and CFO, Joe Berchtold; and the entire team at Live Nation, welcome to the Live Nation 2024 Investor Presentation. I'm Amy Yong, Head of Investor Relations. Before we get started, I have the honor to read the FLS. Okay. So 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, including in our SEC documents, where you can find descriptions of the risks and uncertainties that could impact actual results. Today's presentation will also refer to some non-GAAP measures in accordance with SEC Regulation G, we have provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in the presentation materials posted online. And with that, we'll get started. [Presentation]

Hello, everyone. Welcome to our Investor Day. We'll start by telling our plans about Liberty. Just kidding, I couldn't resist that because that's -- chart seems secondary. We'll get to all that stuff in Q&A. We have our full team today. We'll do our best to get through these slides without killing you on too many graphs. But hopefully today, we -- I don't think there's much new today because most of us have been talking about the biggest thing, consumer demand, how will we grow. How are we feeling in terms of supply and demand. So we'll take you through that today, some Venue Nation updates, and then we'll get into Q&A and answer all of those questions. We've been talking about this always. Coming through COVID, everyone always would ask us what's the future? What's the next 5 years look like? The good news is, as an industry, we think this is a business that going back pre-COVID, this has been years and years about 8% compounded growth as an industry. Take COVID out of there, which obviously was up and down, and we had some spectacular upside. You get back to going forward, we think this continually is an 8% business. So we think there's lots of growth left as an industry on a global basis and we'll take you through why we think that's going to happen. We're proud of our delivery. Since we started this many years ago, I guess 2005, we've been able to deliver continually double-digit AOI growth. Again, we had some spectacular post-COVID, but we're back now to what we think is, again, a healthy forward AOI growth for our business. We've all talked about it, but just to restate, why is it going to grow? Because experience economy, you've all read about it, but you're seeing it more and more come to life. Any of you have young kids, you'll know what they're all about from experiences versus product. So good news is there is a shift globally to the kind of the experience economy, live entertainment continually ranks at the top, even above sports. So that's going to continue to propel on a global basis our business. And then I always get asked, what's driving all this? And we've had this theory, like many of you have read about -- maybe some of us in the room, you think back to our days of how do we experience music. We had limited CDs. We had MTV. We had a playlist on Top 10 radio feeding us a certain amount of songs. Our repertoire was actually very small. You look at my 14-year-old today or your kids today, they're living with a jukebox in their hand, right? Between TikTok, YouTube, Spotify, Amazon, on a global basis, they are just unlocked. So not only is the 14-year-old in America unlocked, but the biggest win of this is the 14-year-old in Columbia is unlocked. He knows that Tyler dropped the new album today. You think about that shift. For 50 years, that didn't happen, right? For 50 years, the labels controlled distribution. All they cared about was North America, Western Europe. That's where CDs were sold. That was the model. We really couldn't tour in Latin America. We couldn't tour in Asia. We really couldn't tour in Eastern Europe and Africa because no one was promoting that album. Today, that's been unlocked. So the consumer today is following that artist on Instagram, has a direct relationship and listening to them on TikTok and Spotify. So we had this global base from India all the way to Latin America of the youth of today with a jukebox in their hand, and they want to see Tyler creator because they become fans. And when you look at then what they prioritize, we do a tons of research just to make sure we're not missing it, right? Does the 14-year-old today value that concert the same way others did? No matter what research we do in what market, it continually rises to the top of all things in life you want to experience, for some people even above sex. But in general, it just is that magic moment in life. It's a very rare moment when you bring your son, your wife, your girlfriend, whatever version of you're doing a couple of times a year, those are Kodak moments. And they continually be high, high in the memory bank. Pricing, always the topic, right? Everyone wants to talk about the 2% of tickets that end up on a website. But this is still the most affordable. So really, we punch the biggest punch per head in terms of the highest demand event in the totem pole, but it's priced below most sports. Fortunately, sports kind of -- it's a badge of honor how expensive it is. Concerts get lots of bad press on how expensive it is. But when you strip it back, forget all the noise, average ticket price -- and this is good tickets. We didn't do the -- we have another chart of what's the get-in price. The get-in price is really low. But we just said, okay, let's look at all entertainment activity to go to sit in a good seat, good concert on average. These are the best seats across concerts, the best seat against those teams. We're still priced below sports by far. You look at our amps, that's our best ticket price. So for $56, you can get in. We've said the stats before, 75% of all tickets are under $100. 98% of my shows don't sell out. So although the news generates a lot of stress around the odd big on sale a year, that's not the consumer experience 98% of the time. They're walking in a show at a very affordable price, Jones Beach, MSG and having a great time. So we always want to look at supply/demand on a macro level. So are there more consumers buying tickets? And are there more artists on the road regardless of who's promoting them? And these facts, if you look at it, it's just growing, right? The pie is getting bigger. There's more consumers that are buying concert tickets than they were 10 years ago. So the pie of buyers is growing. The pie of artists on the road is growing. So the 2 most important pieces of why this industry will grow other than the globalization is there's more artists on the road, there's more consumers that want to buy. That's going to drive that 8%, 9% annual growth rate. Regardless of pricing, the pie is getting bigger. And every year, we've done this. We want to kind of walk the talk and convince you we're going to turn all of this into ongoing growth. So today, we'll take you through the 6 main levers of how we're going to continually grow the business off this incredible global base of more consumers and more artists. So we're going to start with our Concert division. And we're going to start with, I think, Omar. Omar runs our Global Concert division, touring mostly. John Reid is going to come up, who runs International. Alex Soberon, who runs OCESA and they'll take you through the concert business.

Thanks, Michael. So top line perspective, you could see incredible scale, over $13 billion spent a year on talent, a show every 10 minutes. This just shows the incredible scale of what it is we do every day in 48 countries and growing. This shows you -- we're involved with artists from the beginning all the way to the top and then sometimes generally, as they come back down a little bit from clubs through theaters, all the way through stadiums, all the way around the world. So we're in the life cycle of the artist's career, whether they're going to do a residency in Las Vegas or a pop-up stadium in Munich or a stadium tour in Australia. We're working with all kinds of artists in all kinds of levels. One of the most exciting things that we look at all the time is not only we have more headliners, but we're getting there faster, right? So if you look at Olivia Rodrigo, 2 years ago, she went on tours, she sold 150,000 tickets. This next tour, 2 years later, she's 21 years old, she's selling 1.5 million tickets. So we're gaining headliners faster than ever, and they're getting there faster than ever. And then on top of that, we spent a lot of time talking about Latin, but there's artists singing in Spanish that are selling tickets around the world. Karol G just went on the biggest Spanish selling tour through Europe this summer. But now we're seeing artists singing in other languages as well, including Punjabi. It's very exciting with Diljit Dosanjh, just sold at arenas all across Europe and the U.K., America. There is actually a stadium Act in Canada, singing in Punjabi. The other exciting thing about where our headliners are going is if you look at the top-selling tours, very few of those artists you would say you won't see again. So we have the top selling -- the artists that are signing the most tickets on a per year basis are still in their prime and then we're gathering headliners behind them quicker than ever. You start to talk about how we're going to get to 200 million fans. It's really 3 things. It's all part of the globalization, part of what we just looked at in terms of having more supply. But we're going more places than ever before at scale. You'll see an announcement, I think, just announced today, Coldplay is going to play at a 100,000-seat stadium in India. That's on the back of 3 or 4 sold-out shows in India already. They are sold-out 4 nights in Abu Dhabi, places that they've never been or sold tickets before. So we're going to new markets. We're building new infrastructure in markets where we already are, whether that's a pop-up stadium in Munich or a stadium that we announced that we'll be building in Toronto that will do 50,000 people a night. So we're building more infrastructure, new infrastructure in existing markets, going into markets that we haven't been in before and then going into new markets and getting deeper in some markets. So take Brazil for instance, the last Red Hot Chili Peppers tour in 2015, they would have played 2 markets in Brazil. On this tour last year, they played 6 stadiums in Brazil in 6 different markets. So Brazil has gone from 2 markets for the Red Hot Chili Peppers to 6. So we're expanding markets, going deeper into new markets and building new infrastructure in markets that we've already been in. And that's how you're going to start to layer up to 200 million fans. That's a $300 million AOI opportunity just across concerts and sponsorship. And moving on to how does 2025 look? I think as Michael alluded to, it's 2 pieces that we look at that are exciting. One, we're already -- we believe we're going to be double-digit growth across our large show pipeline and about 60% of where we expect to be next year on large shows is already confirmed for next year. So we're well on our way to the goal. And as you can see, big marquee artists, Imagine Dragons sold 1.2 million tickets in Europe already for next summer. Clearly, everybody saw the Oasis news. Shakira, Usher. And again, as you look at this list, super diverse list of artists. All artists that could continue to tour. So you're not sitting here looking at a bunch of artists and saying, this might be their last tour. Really, none of these artists would you look at and say this could be their last tour. So part of the excitement is, again, new headliners as well as a big runway on our existing headliners. And now John Reid will come up, who runs Europe and Asia Pacific for us.

Great. Yes. So geographically, where we're going to see these people come from. Europe, we see -- we've got quite a few mature markets in Europe, but there's a huge amount of runway as you move East and South in Europe, a lot more depth in the market, cities and countries that we haven't been to yet, and we'll be announcing a few of those things in the near future. But that business then you see in Asia Pacific, where Japan, this 90% domestic market. Is there opportunity there and all the whole pacific rim as we see 6 nights of Coldplay here or there. And as Omar noted, with 110,000 seats in one city in India will go in 5 minutes next week on top of the 180,000 tickets we've already sold in Mumbai. So these things are just there. Africa and the Middle East, longer game, infrastructure related, but opening up very quickly in the Middle East. South Africa, we're opening a pop-up venue of 10,500 capacity in Johannesburg in a month's time, which -- that sort of stuff is -- it takes a while to build these arenas as you'll hear, but we can be building that 75,000 capacity in a car park stadium for Adele in Munich, as you saw this summer, which had 750,000 tickets in one city. It was an extraordinary event to be at actually. Just out of nowhere, a gravel carpark 6 weeks later was this most beautiful stadium with people paying EUR 400, EUR 450 a ticket. As you can see from this one, these artists are doing more shows in more markets. So the pie is getting bigger. They're doing additional shows, and we can take them to additional places. As Michael says, Spotify and YouTube in these places are unlocking. And if you talk to the Spotify guys and the YouTube -- the Google people, they'll tell you that the fastest-growing markets are in Asia and Europe. Their ARPU is substantially less than ours actually. But you'll see that those subscriber numbers are going up and that's going to increase the runway for all of us as we go there. You can see the right-hand column, there is the global audience. That's a consumption number. That's where the audience is today on YouTube, TikTok, Spotify and Apple. Look at that Latin American number, which gives you the size of the runway just in consumption today. APAC, likewise. Europe, we're getting there. We're already ahead of them, but there is a huge runway for us. And in terms of when you get on that runway and when you get to those markets, you can see that -- when I talk about ARPU or revenue per fan or whatever, our ticket price is what's holding up. For a AAA artist, you're at that $100 average ticket price and growing. And you'll see India grow and these spaces grow a lot quicker than that over the next year or so. But whereas you can see your Spotifies and your Netflixes at their $2, $6, $7 a month average, we're running those $100 tickets right across all those Asian markets and across the Middle East. And as we go further in Eastern Europe, those numbers are even better. That's where the growth is. And Alex will talk to you about Latin America.

Hello, everyone. It's a pleasure to be here with you and sharing something of the advances of the growth in Latin America portfolio. I mean, if you see what Live Nation has achieved in Brazil, Argentina, Chile, Peru, this is outside of the partnership that we created in OCESA Mexico and Colombia and then the acquisition of Paramount has been pretty incredible. Coming from 2 million to 15 million fans expected by the end of this year and growing. Going a little deeper into the OCESA history, 20% compound annual growth rate with a company that was supposed to be mature. OCESA was a leading company in Mexico. And then the idea that the partnership with Live Nation could bring value, it's totally proven. We managed to integrate much better the concert touring with United States, North America. And at the same time, we'll revamp fantastically the platform of Ticketmaster to put it up to the same standard as New York or London today. We revamped the GMP Stadium, bringing new sponsors and ancillary revenue. It's been absolutely fantastic. So besides bringing more talent, having a very solid demand, we're also looking at what Michael mentioned on the access to music, it's happening to some of the artists that had performed many times in a territory. Just for example, Shakira, last time she performed in Mexico City, she played for 2 stadiums. She's going to be playing next March and we're opening the seventh stadium in Mexico City. So same artists that can triple the number of fans. So it's been really amazing. So besides all the portfolio that Live Nation has achieved on festivals in Latin America and Brazil, for instance, Rock in Rio and The Town and Lollapalooza, the festival has in Mexico, we think that there is a tremendous potential still to be achieved here. Thank you. And now Charlie?

Thank you. Over the past decade, we've built out the premier global platform of festivals. And in these festivals that you see, the most well-known names in live music are here: Electric Daisy Carnival, Lollapalooza, of course, Download, Reading and Leeds. These are the biggest names and festivals around the world. And in these festivals, we represent every genre, whether it's a great, big multi-genre spectacle like Lollapalooza or Rock in Rio or whether it's a niche single genre festival like Tortuga is to Country or Rolling Loud is to hip-hop or even if we do a micro-genre festival like When We Were Young is for emo. In the last 10 years, our global festival attendance has grown by 10% CAGR. The press has written a lot about the economic downforces on festivals. And that's been largely downstream of artist fees related to how much they can now make in arenas and stadiums as well as post-COVID inflation that's affected us in operation, production and labor. And we've kind of got 3 levers that we pull to overcome those adverse conditions. Net per fan spending on site, which is largely through F&B and curating those menus and drinks for each demographic that shows up for each of these individual festivals. Festival sponsorship, which Russell is going to talk to in a minute. Russell and I spend a lot of time walking into festivals and taking kind of unused or misused real estate, turn it into a sponsor activation site, thereby monetizing it the following year where we just wasted the year before. We're going to continue to do that and double down on those efforts. And then, of course, VIP net per fan spending has been up, particularly post-COVID, and we kind of use what I would call a VIP ladder there. So we start -- you come when you're young, you're a GA ticket. Hopefully, you graduate to GA+ where you get a little bit more leg room, your own bar, your own lounge, your own bathroom. Hopefully, you get a little bit more successful, you come back, you're a VIP ticket holder. You got a better lounge, better restroom, better amenities. Now you're a partner at the law firm, you come back, you're a platinum customer. You've got a better lounge, better view in front row and more amenities. And we continue that. And now we've started offering what we call an insider ticket at a lot of festivals, which would be comparable to the VIP Disney tour. You kind of get your own concierge, your own tour guide, your own golf cart, the full backstage experience, and we curate your day for you. The last step on the VIP per net spending has been developing a structured view in which you might see golf course, golf tournaments like cabanas, bungalows, that kind of thing. Bleachers, we've introduced that in several shows. And then in 2025, we're going to demo some reserve seat bleachers at various shows at festivals, which will be entirely new, where we'll still reserve either as a VIP upgrade or a stand-alone product. Thank you. Back to you Omar.

Thank you. So just to look at ticket pricing, it's our other big AOI opportunity in concert. So the $300 million in new markets and expanding markets, $125 million here. We do this in a variety of ways. One, as Michael mentioned, 95% of the shows don't sell out. So there's a tremendous number of tickets still to sell just in our existing show count without adding new show count. So more optimization of ticket pricing, which generally means reducing price. There's a lot of stuff you'll read about how it's all just dynamic pricing or demand pricing is really about going up. It's as much about going down, more than 50% of the changes we make is downwards. We only have about 5% of the tickets that we sell overall or sold as a premium or a platinum ticket. So there's some growth there, but ultimately still an affordable night out for the fan. That 95% unsold is 35 million tickets globally. So just starting to get into that as part of the AOI opportunity. And then ultimately, when you do read about it, on the secondary market, there's a 90% secondary markup on the top tours, which again is that opportunity as we only have 5% of the tickets in premium. So lots of different levers here between unsold seats, pricing better and capturing more of the top end to lead to this $125 million AOI opportunity. And now I'm going to turn it over to Jordan Zachary, who runs our Venues division.

Thank you, Omar. I'm very excited to be here today to talk to you about Venue Nation. Venue Nation is our operating hospitality and development team. We have a diverse global portfolio, the largest in the world. That's everything from stadiums like what Alex showed you a picture of Estadio GNP. Arenas around the world like Ziggo Dome or Moody Center, our core amphitheater business, primarily in United States, and the largest theater and club network globally. This division is about $2 billion of revenue, $1 billion of which is food and beverage. And for growth, focused on expansion. Our 50-person development team has about 80 venues in the pipeline, which we'll talk about shortly. First, for growth. Our main focus is enhancing our existing venues. So we have a big team doing advanced analytics looking at how to spend capital for a high ROI on site. We forecast we'll spend $150 million to $200 million to drive a 20% return and about $200 million. That's premium clubs, multi-tiered unbundled approach, premium boxes, which you've probably seen at Jones Beach like in the picture here, expanding our concessions, which is a really higher ROI to drive on-site spend and then one thing we're very proud of continuing to enhance our artist backstage hospitality and drive real happy artists and crews coming back. Our second core growth area is on-site spend. So we have a tremendously successful track record here, as you all know. We have a lot of levers to pull. So we use firsthand data. We use mobile access, on site, night of show to look at product mix, price mix. We'll continue to tweak and innovate here and keep driving. And you'll see we're forecasting $45 net per spend this year. And we think if you look at the top arenas, the festivals, the sporting world, we have a huge amount of opportunity on site. So turning globally. As referenced earlier, there's a huge infrastructure problem, right? This chart is seats per capita, just to give you an idea. But if you look at major continents, Asia, markets like Seoul and Japan, these are massive music markets. Western Europe, which people think is mature, but you look at France, Germany, Italy, these are markets that have real infrastructure problems on the large indoor side and Latin America, which Alex talked about. We're going to spend a lot of time focused on creating infrastructure, meaning venues, that are managed better than any other venues so that artists are comfortable going and we continue to expand the pie. So to give you a little bit of numbers around this, which we haven't before. We've got 35 large venues targeted to open in the next 5 years. So that's through 2029. These venues will deliver 20 million annual fans, representing $400 million in AOI across all of our business lines. And we always model these projects try to beat, model them to about a 20% return on capital. This is about $3.4 billion in total development and acquisition. Sometimes this is acquirer building and renovate. Sometimes, as John referenced, it's a 3- to 5-year arena build, and we'll continue to update this as it grows. Right now, we're forecasting $1.3 billion of Live Nation funded cash and about $1 billion of project debt. But as you all know, it's a very attractive sector. We'll continue to optimize our balance sheet and keep working towards effective returns. So with that, I will turn it over to Russell Wallach.

All right. Thanks, Jordan. So sponsorship continuing to be a tremendous growth driver. We are really proud, 1,300 brands we work with around the world. We're seeing that number continue to grow. All types of different deals for all types of different events in a wide range of territories. And then a subset of that, those 150-plus brands that are spending over $1 million a year with us, and again, that's coming from the entire world. We've got a sales force in every major country where we're doing business. One of the key parts of our growth is renewals. You see that 74 NPS score, which basically says, our clients are really happy with what they're doing with us, and they're telling us that with the feedback that they give us. Our growth, which has been pretty incredible over the last 5 years has been from a variety of categories, which you can see here to the right, kind of the main categories that have been the growth drivers. We see continued tremendous opportunity with these categories, but also there's a number of underserved categories, which we're really digging in on, that being the consumer goods, travel and then kind of media and entertainment. I would say the example of consumer goods would be beauty and fashion, which has become, in the last couple of years, a really big category for us. We were not getting really any dollars from that 5 years ago, and we're seeing tremendous growth across both festivals and venues now along with digital programs in all the companies that play in that space. So one of the things that our fans tell us is that they love when our brands come on site at our events. If you go to any of our festivals, you will actually see fans lining up for 30 minutes to an hour to experience the activations that the brands are putting on at those festivals. We've actually built that into a business line for us where we now do the experiential as well for a lot of those brand partners. But the fans are saying, we love these brands that are on site at the events, and they're open to us bringing more brands that make sense and bring more to the fans at those events. So from a commercial standpoint, we are always trying to think about new ways to structure deals with partners. So one way that we've been doing for about the last 3, 4 years is finding ways to get equity as part of sponsorship deals. So we were looking at the landscape and there were, first of all, a number of categories that are not traditionally big spenders in sponsorship. And then there was a lot of new companies that we were really excited about, but they didn't have the budgets. So what we're able to do is structure partnerships with them where we were getting equity as part of an overall sponsorship arrangement, creating significant value. Probably the best example of that is Liquid Death, which you're all drinking. And so again, this is a strategy that's really worked. And this is just one example of a host of things that we're looking at to reinvent commercial ways to work with brands. So '25, as we look sitting here today, we've got an incredible pipeline of brands that have already confirmed with us. So that pipeline is looking to drive again another year of double-digit growth. And we see the $150 million AOI opportunity from all of our existing assets. And on top of that, all of the new venues and additional fans that we're bringing will just be additional opportunity for us as we continue to grow our business on a global basis. With that, I'll bring up Michael Wisher.

Thanks, Russell. So on the Ticketmaster side, we're now operating in 38 different countries. And we'll get to this in a few slides, but our core areas of focus remain international expansion and continuing to globalize our products. We are also, of course, operating the leading enterprise software platform for the event and venue management area. This drives over 10,000 clients through our platform, over 0.5 billion tickets sold worth over $50 billion. Now hand-in-hand with having the largest base of installed enterprise clients, we also have the most monthly active users. And as we continue to invest, innovate and globalize our app, we absolutely expect this trend to continue to increase. But at the core of what we do every day at Ticketmaster, it always continues to come back to how we deliver for our venue clients. We're absolutely obsessed at Ticketmaster with delivering best-in-class leading ticketing products and ticketing services to deliver for our venue partners. Most specifically, we specialize in those complicated arenas and stadiums, oftentimes with many different types of events and different types of seats and seating arrangements. Now one of the ways we assess our performance in this area is through our clients' assessment of our people, our products and our capabilities relative to our competitors. Lining up the data on this slide is clear to us that Ticketmaster is rated by clients as the leading enterprise ticketing software platform. Now with that platform in place, we've done an exceptional job and been very successful at continuing to grow clients at a global level. This year alone, we've added 24 million net new tickets to the platform with over 2/3 of those coming from those international markets. And we continue to be bullish about our prospects of continuing to add to that global platform on an ongoing basis. A great recent case study is how we've entered into Latin America over the past couple of years. In Mexico, we upgraded the overall tech stack, adding digital tickets, platinum tickets, getting better and hardening the platform to deal with high demand on sales. Brazil, meanwhile, is a relatively new market for us. We entered it organically, but it's quickly turning into our next marquee market on the back of massive on sales, like The Town, Lollapalooza and of course, Rock in Rio. It's only a few years in, but we're already in almost all of the Latin American markets. Another core growth vertical for us continues to be building new businesses and services beyond the core ticketing service fee. This is about us monetizing and further monetizing our e-commerce platform with new revenue drivers like getting brands to pay us for marquee positioning on our checkout page, insights, analytics, data and other services that we sell to enterprise clients. Upsells like ticket insurance, travel. And then finally, using the digital ticket, technology and the data associated with it to better serve our brands and content partners, giving them new ways to reach their target audiences. That's the wrap for Ticketmaster, and now I'll pass it back to Michael. Thank you.

Well, hopefully, good strategy is transparent. It shouldn't be anything new to current shareholders. We think we have an exciting business. As anything, when you got wind at your back from a segment and secular growth, it makes it a little easier. We think we can keep executing across those 6 drivers and deliver ongoing top and bottom line growth. So with that, we'll open it up for questions.

All right. You could just state your full name and your firm. We'll start Q&A. Raise your hand. Stephen?

It's Stephen Laszczyk from Goldman Sachs. Michael, I think it's pretty clear that the global opportunity is pretty massive for you guys. I was wondering if you could maybe just talk a little bit about the number of markets you feel like are greenfield at this point. And I know M&A has been a large part of your global expansion strategy in the past, how many of those markets do you have a strong foothold in versus how many of those markets do you feel like you still might need to execute against an M&A strategy to expand in to get to that 200 million fan target?

Yes. I think we've used in the past, if you kind of just simplify the market, maybe we have a 30% global market share. So as big as we are in some sense, we got 70% of the market still to grow. We look at it kind of -- instead of markets, we look at these 100 cities. All these cities want to be New York and have that high-end entertainment. They all want the big shows. They're all looking at infrastructure build. So in some markets like Asia, Japan, we're close to 0 market share. So complete upside. You look at Latin America, Mexico aside now, we're still single low, low market share. Huge opportunity in all of Latin America. Eastern Middle East, Africa, 0% market share and growth ahead of us. So lots of global opportunity. And then you always have pockets, right? You're underdeveloped in Los Angeles, maybe you're undeveloped in Munich. So there's lots of cities within the current markets where you have the opportunity. So why you'll see us buy an arena in Portugal or Munich. So lots of western opportunity from a venue development. We don't really have many venues outside of America. So venues everywhere, promoter market share, still a big opportunity in that 70% of the world we don't have.

Understood. And then maybe just a follow-up on the Venue Nation CapEx guide, just to clarify, does that include expansionary CapEx and upgrade CapEx? And if not, could you maybe talk a little bit more about the upgrade opportunity at the ROICs that you mentioned north of 20%?

Yes. I mean, Jordan or Joe, you can jump in.

Stephen, there are a couple of buckets of CapEx that we gave you that were meant to be complementary to each other. We gave you the first bucket, which is sort of the major refurbishments adding to VIP clubs, that sort of investment we had at $150 million to $200 million per year. And then we had a second tranche of investment, which was around new buildings, either building them or acquisition, which is the other part of the piece that Michael was talking about. And then there would be a third, smaller, which are just some of the tactical improvements associated with driving your on-site. So I think about those as all 3 complementary buckets of CapEx over the next 5 years. Again, I think part of what we're trying to make clear is while we're investing and we're growing our venue portfolio, this is not something that's taking so much cash that's a dramatic remaking of our balance sheet. This is something as we're continuing to grow, drive our AOI, comfortable in kind of our leverage range that we've been at. We think we can accomplish this with the cash we're generating, some incremental debt as we go and build the business.

Cameron Mansson-Perrone, Morgan Stanley. Michael, one interesting thing in the slides is just the growth in the number of tour stops going from, I think, it was low 90s to approaching 110 stops on a tour. Where do you think that, that can go? How many stops do artists want to make? And as you've seen that grow, has that changed your relationship or the conversation with artists? I would be interested to know kind of what those conversations are like, what the appetite to grow further is, how it maybe changes the tenor of the conversation or anything with the negotiations there?

No. No, it doesn't change the relationship or negotiation. You're the partner with them on 90 or 110, you're already deep in business with them. Part of what we -- I referenced up here is these artists are direct-to-consumer brands. They are very smart today. The world has changed. They're no longer reliant on gatekeepers. They are the gatekeeper. They have 200 million followers. So as an artist now and your team, you know where your customers are, very new. So you know you have 44 million followers in Brazil or Latin America or Asia. So that appetite now to say, it used to be kind of, I did my 60 dates in North America, 30 in Western Europe. That was the market. Now you're in this market of, wow, I got a -- Adele example of let's go do all those tickets in one city in Munich because we knew where the concentrated fans were. So yes, the artist is global now, understands its global market and is always talking to us about I have all these fans in Asia and Latin America, how do we expand or add or make sure we get to these markets now. So they are driving their agenda given that they are now in charge of their data.

Brandon Ross from LightShed Partners. So business is obviously doing quite well. We've seen the results. We see the outlook for next year, but consumers do not like Live Nation or Ticketmaster. And I think that's caused you guys some problems, whether regulatory or otherwise. How do you change consumer perception? Is it a PR thing or a product thing?

Yes. Let's -- nice straight shot. So we're a B2B business, right? So that's my goal. So we have 2 B2B clients, venues for Ticketmaster and artists for the Concert division. You don't go to a Live Nation show, you go to a Coldplay show. So we don't have a lot of control on the consumer product, right? I can't tell you what the price is going to be. I can't tell you how to put it on sale. I can't tell you what market is going to be. We work for the artist. We take the punch for the artist. We protect the artist. So our main job as a B2B business is to make sure we have credible renewal rates and a great roster of artists. That we're winning at, and that's the part that matters. If you look at even what we've seen in the press and all that, the DOJ, et cetera, you don't have artists complaining. You have fans that want cheaper ticket prices, but you don't have our core customers saying, we're not doing a fabulous job for you. So my main job in life is to deliver for the artists. We work for the artist and deliver their product however they want it delivered. Nontransfer, transfer. You don't care, you care about transfer, you care about sign-ups, you don't want sign-ups. We deal with 1,500 different artists a year. This isn't like the NFL. I don't have a players union. So I'm dealing with 1,500 different managers a year, and every artist has a different agenda on how they want to go to market, and we deliver for them. That isn't -- we don't wake up and deliver the consumer part. So I'm not overly concerned on the consumer side. I always want to make sure on the B2B side. Ticketmaster is the same, right? At the end of the day, Ticketmaster's job is an enterprise platform for venues -- do a great job of that. Do I wish the venues broke out service fee for TM, $6, service fee for the venue $46? Sure, that would help some consumer perception. That may not be happening in the RFPs right now, though, right, when the venue says like I want an exclusive ticketing company and sends the RFP to us and [indiscernible] can access. So the main job of both of our jobs is deliver for the venue, deliver for the artist on a B2B business. Now not saying yes, politically, there are customers and government relations and absolutely we got to do a continual better job on explaining, educating on that side of the business for sure.

Okay. And then I just wanted to ask you what you thought of the asset Quint and 6% of Tastemade?

What was the 6%?

It was a joke. The split off assets.

No, I didn't know what the 6% was. Yes. I mean, listen, the good news is, John and I have lots of conversations, and he's a huge fan of our business, a huge fan of our real estate strategy. We've talked a lot over the while. And I think he's a great long-term shareholder and plans to be a shareholder. So I think, as you know, he stated and is simplifying all of his life and some of the assets he had. I think live in 35 stuck in Formula 1 was always the last of the unbundling of a tracker. So we like the model he's pursued if we can spin it out with Quint. Quint is a hospitality business. So makes sense and sense, we'll consider using them and see what they can do for our business. But it's not really much we're going to do today. We don't need to do anything. He's going to hold that asset for his tax reasons for a couple of years. Most important to me as always, is my 35% shareholder happy with Live Nation. We're delivering the returns, delivering what we said we're going to deliver and is he playing along with us. That's my main goal and that's what we've achieved with John, so.

David Karnovsky at JPMorgan. There was a slide up before for Venue Nation. I think it might have said 35 venues planned through 2029. I don't know if you could expand on that a bit, where the focus is in terms of the types of venues, the regions? Anything you would be willing to say, incremental on the time line, that would be great.

That slide is really theaters and up. So if you do the math, you can see the average is about $100-plus million per venue on capital and what they cost. So our main focus is really arenas and that global infrastructure through Western Europe, Asia, Latin America. We'll see some sporadic amphitheaters. We think there's an outdoor business that we know really well in other markets that we'll expand. And then large indoor theaters and up is a focus.

Ben Soff from Deutsche Bank. I wanted to ask about the festivals business. You guys seem to be doing really well. You talked about some of the headwinds going on across the industry. So is there an opportunity to step on the gas and take market share in that piece of the business?

Yes. I think there is globally, certainly. I mean, the festival business is primarily a real estate business and a value business. So we need the best real estate like Grant Park in Chicago or the F1 track in Sao Paulo, Brazil, where we do [indiscernible] Brazil and The Town. We need premier real estate. And so as that becomes available for a variety of reasons, cities trying to make more money, parks departments in a budget deficit, all of the above. I think there is room for us to grow there. And then if you can buy a $440 GA ticket to Lollapalooza and see 165 bands, or Rock in Rio, that's a great value proposition against what's -- going to see one show. So a lot of fans do both, right? So we want to be in the best real estate with the best value. And I think we will have the opportunity to really grow as opportunities present themselves for a bunch of different reasons.

Peter Henderson from Bank of America. So the sponsorship has been obviously an enormous area of growth for you guys. Just curious like looking forward, as you think about the opportunity from here, how much is going to be driven by increasing wallet share from current sponsors versus developing new and innovative sponsorship opportunities?

So it's really both. We are working very, very closely with all of our countries. Mexico would be a great example where we're importing products that we've created here in the U.S. for that team there to sell. We're learning from them, bringing back ideas. We're developing. We have a long road map of new products and programs that we can sell to our existing partners, both in the U.S. and around the world. Charlie mentioned, when we walked the site of Lollapalooza and we're saying, oh, we could put another lounge there. Oh, we could put another activation there. So we're uncovering as well new additional assets with our existing properties. So it's really a combination, and it is global. As I said before, we've got a great team across Europe, Latin America, Asia, Australia that are all sophisticated strategic sponsorship sellers.

David Joyce with Seaport Research Partners. And considering the slide where you show the parity on concert pricing by region, how would you apply that thinking to where you are in Venue Nation in the per fan ancillary spending? What's the glide path to getting to parity if you're not in there currently in a region based on the Venue Nation expansion plans?

Yes. I'd say it's a little different on site, right? It's less pricing and it's more total spend. But I think that slide was about a onetime get in. What we try to do on site is maximize spend in that second, that third purchase, right? If it's another drink, if it's food at a higher level, which we've done a really good job at, if it's merchandise or an experience, right? I mean, this is -- as Michael said, this is the experience economy. It's a stratified economic world, as you all know. So the super premium down to the lawn is all very important. And I think we've got huge upside if you look at sports and arenas versus where we are at $45 on site. We look at all the different products.

By market, the U.S. would be most developed. And if you look at the total spend, a lot of that is coming from the premium as we've talked about, right? So I'd say the U.S., in general, whether you're talking festivals or buildings, they're further ahead in terms of the development of premium. So as we're focused on international markets, whether we're buying buildings and refurbishing them or new buildings, very much in our thought process is how do we make 30% of that premium? So I'd say today, international markets would be generally behind, but the strategy is to bring them to parity. Estadio GMP is another great example. Sorry, Alex and I were talking earlier about how -- when they redid that, they totally transformed it. So now the opportunity of the suites and the experience that you can have at different levels with the clubs and all the different components is night and day different than what it was a year ago.

And just to jump on, if you kind of simplify America or not, there is the old arena like the Forum in L.A. and then there's Intuit Dome down the street beside it, right? So sports has gone through that change where the new venue, SoFi Stadium versus the Rose Bowl, where they're ahead. They built a much better experience, 16 zones. Most international soccer and football stadiums have huge per caps because they're big stadiums that have been renovated or rebuilt. So we're kind of following that same path. We're like the Forum in our amphitheaters. We're still underdeveloped versus new arenas. So we see in America, why we think there's upside here. Same with international. As that current venue is upgraded, like we did in the stadium, we see that unlock. So we're at second inning in general in our venues in America and/or international compared to the Intuit Dome or the new sports arena that's built not just a row of boxes, but 16 zones of food and beverage. If you look at Intuit Dome, they're at that next level, which they've done a great job of the grab and go. It's not a store. It's literally -- it's just a rack on the side of the hallway and you grab your beer and keep walking. I mean that's a whole lot -- we've got to get to that level at the amphitheaters on our festivals, right? So we're looking at that technology. So we've got lots of opportunity to do a better job on site.

Jed Kelly, Oppenheimer. Called out on the earnings call, you guys have had tremendous success with Jones Beach. Can you just go about and talking about how you strategize and sort of finding or identifying the next venues that you can take that Venue Nation strategy and just soup it up and drive a ton of margin?

Yes, sure. I mean, Jones Beach was obviously a venue we've operated for a long time. So that was a renovation strategy, right? So that's a venue we know. We know everything about it. We know what fans are spending where. We know what audience were not happy, right? So back to Brandon's question, our surveys coming out of the Live Nation venues are really good. So those fans love us for the record. But at Jones Beach, that was really a premium strategy. So we went from no premium, to Michael's point, to 3 tiers of premium and then even the basic seats, 7,000 seats, we improved. So in terms of new venues, it's really -- we have a lot...

Just a second on the amps. So amps are basically -- 40 amps. There's 20 amps that you can Jonify. Our most profitable amphitheater of America is our Indianapolis amphitheater. It's a huge amphitheater, does an incredible job. It's still old school. Boston, huge amphitheater for us, Toronto. So we kind of look at that top 20 that you can take them from a -- right now, kind of an old-school venue, some bad boxes with chairs and tequila lounge into a -- Jonify it. So we have those 20. We'll work on 2 this summer and kind of start rolling that super venue upside on the current portfolio, separate from new builds.

And on the new builds side, right, we target major markets, as Michael said, and secondary markets and look at what venue is missing. So whether is there an expansion to that market? Whether is there an incremental venue that's not there. And we've got tons of those in the states and overseas. So we're really excited about targeting those markets, not to go head-to-head with somebody, but to really expand the market and improve value.

Jason Bazinet at Citi. I guess it's been 15 years that you've been telling the same story about secular growth. And for as many years, we've watched you execute successfully against that. My question is pretty simple. Why do you think no one has mounted sort of a competitive response to the assets that you're building? I'd just love to hear you talk about why you think that is?

There are lots of competitors, big competitors. I used to always say to the Board that the consumption around media and investing around labels, probably like they do now with the movie studios. The world was very consumed with the record business for a long time. So I always used to say as long as they keep forgetting about us, we'll stand up a little taller and keep building the business. So I don't know. We're a low-margin business for a long time. I was $8 for 8, 9 years. Most of you probably didn't believe, right? So we didn't look at the profile right at the beginning. We look just like a low-margin business that didn't have assets, didn't have contracts. Experience economy was not really in vogue yet. We believe that the center of the wheel was going to be live and entertainment. So like most times, I think we saw the belief early, but we had to show me. It took us a few years to deliver for you, investors is kind of can we produce a continual cash flow business from this low-margin business. So you really look at our stock, it kind of only really took off the last 5 -- out of this 15-year chapter, it took us 10 years to kind of keep building credibility. And then by the time it took off in kind of pre-COVID and COVID, I think about that point, it was later in the game. But listen, CTS is out there. He's been following our playbook. AEG is following our playbook. They've got the same vertical as we do in CTS. So I see that. I see private equity buy some festival companies here and there. So we'll see them out there.

Kutgun Maral with Evercore ISI. I think you continue to lay out a pretty credible path to sustain the growth, if not accelerate it over the coming years. When you think about the next 5 years, if you just layer in all the initiatives that you talked about. You're going to be a pretty massive company with fairly large balance sheet capacity. And so you talked a little bit about your commitments from a Venue Nation perspective. But how do you see the capital allocation priorities evolving over the next few years as you continue to grow even larger?

Yes. I don't think we try to set 5 years out right now. But I think if you look over the next 2 or 3 years, we've laid out a lot of capital that we want to deploy with very strong returns on the venues side. I think we're going to stay active on the M&A side. We've talked about some markets in Asia, Latin America, that we don't have a big presence. Certainly, there are opportunities to purchase venues outside of what we have in our development pipeline. That takes things up. We've talked in the past that there's a put call what OCESA comes up over the next few years. So I think as we're looking out over the next 3 years, we've got a lot of opportunities that leverage both our free cash flow and our capacity to stay at our historical leverage levels.

And we don't -- just so you know, we're not precious on any of it, right? Meaning, I'm a large shareholder. I only have one objective, is ultimately shareholder value. So we do look at capital allocation, buybacks, dividends. We look at all that and make sure that we can answer the question, right? Can we deliver a better return for you and the growth and supercharge our growth or not. And depending where the stock price is, we've looked at that. So at this point, we think we got super growth ahead of us. To your point, I'm always kind of like, let's keep the pedal down internationally. Let's get these buildings built and keep moving that forward. And we think that's the better return right now. But we're always with the Board and others having debates what's the best return.

It's Barton Crockett from Rosenblatt. And it was interesting to hear you talk about OCESA and the tremendous kind of return you've gotten on that acquisition. But I was wondering, how close are we or how far away are we from getting another OCESA? And is that still the opportunity now that it was or have times changed as you put more capital into venues, perhaps the regulatory environment is a little bit stickier? Or do you see that? And if so, where do you see it?

Yes. I think OCESA, CTS, AEG, us, the top 5 or 6 big ones are out there. It took me 6 -- 8 years to get Alex to the table. So it's not an easy venture, toughest negotiator I've worked with. It took me 8 years to get to the table. And then we agreed on the deal that we were going to close on May of COVID. So I called him and [indiscernible] and said, I can't close this deal today. We're shut down, which he said too bad. We got a contract [indiscernible]. It took me 8 years to get here. So he gave me the grace period, and we believed in each other and issued equity and got it done. So he's been our partner for a long time. But yes, if you look at our history here, it's never been about a blockbuster deal. It's been a bolt-on strategy all along the way. That's how we built this business from the beginning, over 15, 16 years. So we look at this 75-plus in our M&A pipe of a venue, a promoter somewhere, maybe a festival. So we've got a full plate on those 100 cities you look at on our chessboard on where could we add some value on the white space. So we've got a great runway. We don't need a big one. We can assemble them one by one.

Okay. We're going to take our last question.

David Katz, Jefferies. A lot of capital going into venues and just observing very long term as you start to accumulate more and more real estate ownership, obviously seeing the earnings value from it. Are there contemplations of long-term sort of real estate strategies, right, where there becomes value that can be unlocked from spinning or separating, right? Any thought to that end?

I mean we've looked at that. But those -- the MGM, I don't think those ultimately work that well. The cost of the REIT to -- No. So we've been asked this forever on why don't you spin out your -- so the cost to spin them out ends up taking most of the margin away from your core. It's our core business. So our job is ultimately -- we have these incredible 2 hours of content, right? That's the IP. We spent $13 billion. And all we've done over 15 years is continue to figure out where do I put that IP that I get the best return. And ultimately, it was an amphitheater, maybe now it's an arena, maybe it's a hotel, casino. We're always just looking at how do we keep building that 2-hour IP and get as much of the revenue vertically we can. So if you're going to go vertical on a venue, you don't want to -- that would be no different than we're currently doing, which drives me crazy is when I get that 20-year lease, right? And the developer says, give me the 20-year lease, he walks to the bank, finances 85% of it, and I'm paying a high price being the middle man. So I think looking at our real estate as a core top to bottom revenue is our strategy.

Okay. Well, thank you so much. Please stay and meet members of our team, and we'll have a cocktail hour where you can ask any other questions.

Perfect. Thank you everyone.