Venu Holding Corporation (VENU) Earnings Call Transcript & Summary

His name is Ron.

Ron. Ron, first, I understand your frustration. I get it. But I think you've got a bunch of this wrong. First, we have done nothing but build assets. We have not turned on our P&L yet. And we've taken these projects and finance these projects in a way that now we're at a point where we can turn them on. I don't think the share price -- and I'm going to talk about this a little later in my comments, but I don't think the share price, Ron, has anything to do with revenue today. I think the share price today has to do with investor fear that we're not going to get these open or the risk that is involved. And listen, there is risk here. And the risk will continue to be here until we can get profitable. And so again, like I said just a few minutes ago, we're not a fully baked company. So -- but I understand your frustration, and I get that. I'm looking at it as an opportunity that the market is handing us to buy to buy shares. But listen, I don't know otherwise, I don't know how to answer your question. And I get your frustration. There were 2 or 3 of you that voted against that [ flying Buffalo ] voted against it [indiscernible] and his partner [ Horne], voted against it as well. But I think it's the wrong thing to do. I mean to take it out on employees that are working their tails off to make this company happen, and then to take their option -- to vote against their option plan. It's just a bad move, I think -- thank God, that the vast majority didn't feel that way. But again, I get your frustration, and I'm going to work my tail, listen, I'm the biggest shareholder here. So at the end of the day, my goal is to bring this thing back around where it needs to be. But between you and [ flying Buffalo], I understand the frustration.

Thanks, JW. I think that -- I appreciate all the questions that were submitted. We did receive all pre questions. These were all answered today. So we're excited to hear from you a little bit later on some great remarks on vision setting and some other things that would happen to --

We will talk about a lot of stuff. We're going to talk about where we've been. We're going to talk about where we're going, what we've done. And we're going to talk about the stock. I mean I understand that this is a question, and it's going to continue to be a question, and I'm anxious to talk about it in my remarks here in a few minutes.

Yes. And you almost spilled some secrets here ...

I'm not going to spill any secrets until the very end, but there is a big secret coming and you're going to like it.

Yes, that's right. All right. So we're going to take another short break real quick. For those of you who have not voted, there is going to be a QR code on your screen or you can follow that URL to go and cast your votes. We're going to wait just a few moments to have a little bit of time for those to do that, and then we'll reconvene in a few minutes to talk a little bit more. We'll talk soon. [Voting]

Hi, everyone. We're back. Thanks for your patience. I can report that the final votes are being aggregated and counted. But with that, I can go ahead and report on the preliminary results of the voting at today's meeting, and I can report that each of the 4 proposals based on preliminary vote count have been approved. Majority of the votes cast have voted in favor of each of the 3 proposals and a plurality of the votes have been voted for each of the director nominees. The company will obtain a certification from the Inspector of Elections with the final vote count, which that certification will also be placed with the records of this meeting, and the company, of course, will post final results of the vote in a Form 8-K that will be filed with the SEC. And with that, that concludes the formal matters described in the proxy statement and submitted to shareholders for approval at today's meeting.

Awesome. Thank you very much for being here, Peter and for helping us out with today. We have a little bit left for you guys. So with the formal meeting behind us, let's take a look at what Venu is building, and then we will also hear from Founder, Chairman and CEO as well. [Presentation]

I want to start where I imagine most of you started this morning thinking about the stock. I don't understand why the stock is where it is, but I'm not going to sit here and apologize for it. The fact of the matter is, we are a better company today than when the stock was at $18 a share. And I'll tell you exactly what I've been doing about it. Never thought about selling a share, not one. In fact, I've been buying the stock, been buying the stock all year long, bought again yesterday. Over the last 2 quarters, my wife and I have bought another $0.5 million of our stock with our own money on the way down, and I'm going to continue to buy it. And every time I do, I file with the SEC, and you can read my reports. Like I said, going to continue buying our stock as is many of our directors. And I'm going to work diligently over this next quarter to get approved a significant buyback. Look. Look at what we reported midyear. Net tangible assets of $4.44 a share, and that's a cost basis with all of the municipality contributed land carried at 0. That's 0. That land is worth hundreds of millions of dollars. That's why share price today doesn't make any sense. And that's why I'm buying the stock. Listen, investors who are selling today, it's simple. They're just betting that I can't open and book these venues. But there are other investors, like me, that are seizing the opportunity they're betting that I will. So let me be playing about how I see this. The market is handing me and you, if you seize it, a massive opportunity. I'm taking it. I'm not telling you to take it. And I'm not encouraging you to buy the stock. There's still risk here. But somebody is going to eventually figure this out. And my hope is that I bought all that I want to by the time that happens. That's my view. I'm not going to talk any more about the stock today. But I want to tell you about the year. Last year, I talked to you about the pace and about breaking it. This year was different. This year was about decisions. Some of them were hard, Almost none of them made the headline the day that we made them. But if you compare where this company sits today to 12 months ago, nearly everything that matters, traces back to a decision that somebody here at venue made. 4 of them are worth our time to talk about today. First, who runs our buildings? We have always said that we are developers and owners of multiseasonal, multiconfigurational, omni content, state-of-the-art venues. That does not automatically mean that we're the best operators of those venues on opening night. So in July, we brought in [ Legends Global ] to lead our venue management team at Regent Bank. Legends runs more than 450 venues, 20,000 events and 165 million guests a year. They're pretty good at what they do. That is not just a partnership of convenience. That is us making a decision that better serves you with an operator from day 1 that is first class. [ Aramark], stays with us on the food and beverage side. And this year, we expanded that relationship across all 5 of our premium venues with additional equity from them into our company. PepsiCo signed on as our official beverage partner across the [ Sunset ] portfolio. Regent Bank put their name on the building in [ Broken Arrow ] in a multiyear, multimillion dollar agreement and we added [ Ron Bension ] as a strategic adviser to me. Ron ran [ ASM Global]. He was the architect of their $2.3 billion sale to Legends. I appreciate his advice on a daily basis. Second, who fills our buildings? We moved our venue ticketing to Ticketmaster this summer under an exclusive agreement. That was a real decision with real trade-offs and we didn't make it lightly. Then we did a single most important thing we did all year. We have partnered with Merck Mercuriadis. He is one of the biggest names in all of music. That name might not meet anything to you. But let me tell you, Merck has managed Elton John, Guns n Roses, Beyonce, Iron Maiden, Nile Rogers and many, many more. By any honest accounting, he's in the top 3 managers in the history of our industry. He founded Hipgnosis Song Fund. Hipgnosis sold to Sony for $4.1 billion, and we just made a significant investment in his latest adventure, Hipgnosis Artists partnership. Behind him, we are assembling a global talent team, people who have spent their careers at the very top of [ CAA ] and in artist management, you'll hear those names coming out over the next couple of weeks. And I think it will get the attention of everyone in the industry. Shareholders care about 2 things. Are we going to get these buildings open? And ultimately, who is going to fill them? This is the answer, second to none. Artist inspired is part of our model. This is the year that we put capital and people behind it, starting with Merck. Third, how do we pay for what we're building? For 2 years, we funded construction largely through equity and fractional ownership. We made the call this year to move to [ C-PACE ] in replacement of equity. So today, it's a combo of fractional ownership, and [ C-PACE]. CBRE has identified a path to hundreds of millions of dollars in long-term fixed rate financing for both [ Broken Arrow, McKinney ] and all of the rest of the venues that we have on our map. It keeps the real estate on our balance sheet. And when a bridge is needed between fractional ownership and [ C-PACE], how do we close that? Well, we use sale leasebacks with the opportunity to buy the land back and bridge loans. Fourth, where are we going? More than 45 municipalities are in active conversations with us right now. A year ago, that number would have just been a slide, a whole bunch of pins on a map. We've gotten more selective. As many of you know, El Paso and Houston are the next venues to open after Broken Arrow and McKinney. On the financial side, total assets this year crossed $511 million at midyear. That's up 38% since the same time last year. Property and equipment up 46%. And then in June, we were added to the Russell 3000 and the Russell 2000. And the demand signal has never wavered. Fire suite sales have passed $300 million. McKinney is more than 90% sold. Centennial is over 75% sold. Broken Arrow is over 70% sold. And these are all in buildings that nobody's ever heard to know yet. [ Broken Arrow ] opens in a matter of weeks. Did you hear me? In a matter of weeks, followed by McKinney. When those doors open, this company stops being a development story and it becomes an operating one. That's the entire thesis here. And it is measured now in weeks, not in years. For years, everything we have done has showed up on a balance sheet. We have been building assets, but in December, those assets get turned on. I want to be clear. This is not something that we mean to stop building. We're going to accelerate our building. But now we're opening as we're building. Now I'm going to give you some numbers. Regent Bank, once stabilized, is expected to earn more than $26 million in annual EBITDA. McKinney opens right behind it, 20,000 seats, our flagship at that stabilization, north of $50 million in EBITDA, and we expect profitability at the holding company level in the third quarter of 2027. Many of you have been with us since this company was a plot of land and just a vision. You invested in the ideas that fans should own the room. That artist should want to be in it and that the company -- and some little company out of Colorado Springs could build something, this -- this industry has never thought of before. Guess what? We did it. None of that has changed this year. What has changed is that we made the decisions that make it durable. [indiscernible], back to you.

Thanks, JW. Are you ready to now finally spill the biggest news that we have at today?

Yes, I am. And like I've said before, we have worked our tails off to open this first venue down in Broken Arrow. It's unbelievable. I toured again the other day. This is the first multiseasonal, multiconfigurational omni content venue ever built in history. This thing is -- I don't have any other way to say it and it's unbelievable. And on December 4 and 5 we are going to open it with our first preview nights. We're going to have preview nights all the way through our grand opening, which is coming in, in April. But I cannot be more excited about December 4 and 5. Tickets are going to go on sale?

They'll go on sale soon, so soon. But just a reminder, we saved this announcement for this meeting. This is the first people to hear it. This is not public to the...

It's going to go out on the wire in about 30 minutes. The press release will be made in about 30 minutes, but the venue is close to being finished now in a handful of weeks the venue will be done. We were just nervous, honestly, to book it too early, just in case we weren't completely done. So we waited on booking it and started our preview on December 4, 5. But we will run lots and lots of shows between now between December 4 and 5 and the time we open it for its big grand opening, but I can't be more excited. I mean God has been so good to the business. And just following that, just think about this. just in a handful of months after we open that, about 12 or so weeks. We're going to open the grand daddy of them all in McKinney, Texas.

That's right. Well, JW, thank you so much for your time today. Thank you for your insight and for your candor and for and for all that you do for this company. I think it was really fund that we were able to keep that a secret for this meeting. That's what you get when you jump on these meetings, you get the latest news. But we are grateful for you guys for everything you do. Thanks for being part of this vision and for this family, anything --

Hang in there. Just end this with one thing, hang in there. We're a long way from being done. But hang in there. You'll be glad you did.

Awesome. And with that, have a wonderful rest of the day.