Live nation
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K-pop giant JYP Entertainment has signed a multi-year global strategic pact with Live Nation to produce tours for all artists on JYP’s roster, it was announced Monday (Nov. 13). Under the deal, Live Nation will produce tours for established JYP artists including TWICE, Stray Kids, iTZY, Xdinary Heroes (XH) and NMIXX as well as emerging […]
Music companies’ third-quarter earnings reports have so far been full of good news and positive trends. Subscription and streaming growth continue to drive revenues for record labels and publishers. Live entertainment continues its post-pandemic expansion. Margins are healthy. Overall, these have been solid report cards for the state of the music business.
Among the companies to report thus far are Universal Music Group, Sony Music, Spotify, Believe, Sphere Entertainment Co., MSG Entertainment, HYBE and SiriusXM. Next week’s earnings reports will come from Warner Music Group (Nov. 16) and Tencent Music Entertainment (Nov. 14). German concert promoter CTS Eventim will report on Nov. 21.
Here are seven items from the earnings releases to date that stood out and deserve more attention.
Universal Music Group struck out against “merchants of garbage.” During Universal Music Group’s Oct. 26 earnings call, chairman and CEO Lucian Grainge got a lot of attention when he bemoaned the “merchants of garbage” — creators of low-value functional music such as generic mood music and nature sounds — that want to be on equal royalty terms at streaming platforms as such UMG artists as Taylor Swift, The Beatles and The Rolling Stones. Grainge’s memorable turn of phrase came in defense of UMG’s artist-centric royalty scheme crafted in partnership with French music streaming service Deezer. “Sorry, I can’t really think of another word for content that no one really actually wants to listen to,” Grainge said.
Spotify’s price increase gave a much-needed uplift to subscription revenues. The price for an individual Spotify subscription in the U.S. was $9.99 from 2011 to July 2023. The price hike to $10.99 in roughly 50 markets may have arrived later than its competitors, but it came just when Spotify needed a boost. Spotify’s premium average revenue per user dropped 6% year over year (1% at constant currency) mainly because the company had a larger share of family plans compared to the prior-year, CFO Paul Vogel said during the July 25 earnings call. Early returns from the price increase in the U.S., U.K. and dozens of other markets helped offset those losses. Because Spotify’s number of subscribers increased 16% year over year to 226 million, subscription revenue grew 10% year over year (16% at constant currency) to 2.9 billion euros ($3.1 billion). With three full months of a price increase in the fourth quarter and considering the price increase covered about 75% of Spotify’s revenue base, the company expects the price increase to provide “a positive, mid-single digit” benefit (excluding foreign exchange) in the fourth quarter, said Vogel.
No company lowered guidance, and some have raised guidance. Sony Music raised guidance for revenue and adjusted operating income before depreciation and amortization by 5% and 4%, respectively. Reservoir Media raised guidance for fiscal 2024 revenue and adjusted EBITDA by 10% each. It’s one thing for a company to meet expectations it had previously laid out to investors. But raising previously released expectations is something else altogether — a sign the future will be better than expected. It’s usually a benefit to the stock price, too. The share price is the present value of future cash flows. When an estimate for future cash flows takes a sudden jump, that changes the financial model used to calculate the share price.
Consumers aren’t slowing their spending on live music. In August, concerns arose that a resumption of student loan payments, paused to help people struggling during the pandemic, would take a bite out of pocketbooks and cause music fans to pull back on the record amounts they were spending on live entertainment. Three months later, there is no indication that consumers are slowing down, according to Live Nation. “We’re seeing no sign of weaknesses,” said president and CFO Joe Berchtold, noting that Ticketmaster’s October sales in North American were up double-digits year over year. “We’re not seeing any pullback in any way from a club to a stadium tour from Milan to Argentina right now,” added president and CEO Michael Rapino.
SM Entertainment has big plans for its new publishing subsidiary, Kreation Music Rights. The K-pop stalwart has been “aggressively recruiting global writers” and plans to have 80 of them under contract this year, CEO Jang Cheol Hyuk said during the Nov. 8 earnings call. SM Entertainment is pursuing collaborations with both domestic and international publishers and plans to recruit foreign writers “who wish to advance into K-pop by establishing overseas subsidiaries,” Jiang said.
Radio advertising continues to struggle — but the clouds may be starting to part. iHeartMedia’s October revenues were down 8% and the company expects its fourth-quarter revenue excluding political revenue to be down in the mid-single digit percent year over year. The fourth quarter will be iHeartMedia’s strongest quarter of the year “but will be weaker than we originally anticipated due to some dampening of advertising demand which coincided with the uncertainty caused by the recent geopolitical events,” CEO Bob Pittman said during Thursday’s earnings call. That said, iHeartMedia’s digital business “is sort of in recovery mode,” said Pittman, and the company is “seeing the pieces falling into place” for radio’s recovery as most advertisers expect to be “back in growth mode…and spending to support that” in 2024.
The market for catalog acquisitions isn’t slowing down. Reservoir Media CEO Golnar Khosrowshahi said catalog prices aren’t contracting despite higher interest rates. “We’re still seeing a lot of demand for assets and continued infusion of new capital within the competitive set,” she said during Tuesday’s earnings call. “And that is certainly fueling the demand. The pipeline is robust. And it ranges in size from large to a lot of smaller deals.” Reservoir Media hasn’t been suffering from sticker shock, though. Acquisitions in the Middle East-North Africa market — such as some catalog of Saudi Arabian label Mashrex in June — provide the company with good value, Khosrowshahi added. “If we’re looking at a market here that is somewhat saturated with a lot of capital in the marketplace, and we’re able to execute [deals in MENA] at these lower multiples, that makes it just that much more attractive to us.”
Shares of SiriusXM gained 20.1% this week following the company’s third-quarter earnings on Tuesday (Oct. 31) that showed the satellite radio company, which also owns music streamer Pandora, was more profitable despite flat revenue and small losses of self-pay satellite and Pandora subscribers.
Shares of SiriusXM rose to $4.95, its highest closing price since Aug. 3. With the help of a 155,000 increase in promotional subscribers, the company’s total satellite radio subscribers were flat at 34 million. Revenue was unchanged from a year ago at $2.27 billion, but SiriusXM’s net profit grew nearly 50% to $363 million.
Investors will be watching intently next Wednesday (Nov. 8) when SiriusXM unveils a new streaming app as well as in-car innovations and new programming. “This leading content and upcoming product upgrade will be paired with our unmatched business model, which we expect to continue delivering significant and growing free cash flow in the years ahead,” said CEO Jennifer Witz during Tuesday’s earnings call.
The 20-stock Billboard Global Music Index gained 6.9% to 1,394.40, its best week-on-week performance since the index gained 7% in the week ended Nov. 25, 2022. Last week, the index almost fell into correction territory — a 10% decline from its recent high — but this week’s gains reduced the deficit to the high of 1,447.32 (week ended July 21) to 3.7%.
Eighteen of the index’s 20 stocks finished the week in positive territory. Of the two stocks to decline this week, Hipgnosis Songs Fund dropped only 0.8% while Abu Dhabi-based Anghami fell 15.9%.
Led by SiriusXM, the index’s three radio stocks had an average weekly gain of 13.3%. iHeartRadio, the largest radio company in the United States, gained 16.8% to $2.50. The company will report quarterly earnings on Tuesday (Nov. 9). Cumulus Media shares improved 2.9% to $4.91. Additionally, the index’s four live music companies gained an average of 8%, while record labels and publishers as well as streaming companies had average one-week gains of 3.8%.
Round Hill Music Royalty Fund was removed from the index this week after the completion of its $468 million acquisition by Concord. At the acquisition price of $1.15 per share, the London-listed Round Hill Music Royalty Fund gave investors a 47.4% year-to-date return.
Stocks everywhere enjoyed a strong week as the U.S. Federal Reserve left interest rates unchanged on Wednesday, leading investors to predict the central bank would forgo further rate hikes. In the United States, the Nasdaq composite rose 5.9% and the S&P 500 gained 5.2%. In the United Kingdom, the FTSE 100 rose 1.7%. South Korea’s KOSPI composite index gained 2.8%.
Live Nation shares rose 10.9% after the company’s third-quarter results on Thursday showed that the company hit all-time records in revenue and adjusted operating income (AOI). Total revenue reached $8.2 billion, up 32% year over year, and AOI rose 35% to $836 million. Ticketmaster revenue grew 57% to $833 million in the third quarter. Through mid-October, Ticketmaster sold 140 million tickets to Live Nation events — more than the 121 million sold in full-year 2022.
Even though consumers are feeling pinched by inflation, demand continues to be strong across venue sizes and geographies, according to president/CEO Michael Rapino. “I have weekly booking calls with the over 40 presidents around the world and we talk about from clubs up to stadiums and festivals,” Rapino said during Thursday’s earnings call. “We have not seen anything taper off in any sense.”
Other stocks surpassing a 10% gain were Chinese music streamer Cloud Music, which gained 12.7% to 96.35 HKD ($12.31), and New York-based Reservoir Media, which gained 12.1% to $5.95. Reservoir Media will release its latest quarterly results on Tuesday (Nov. 7).
Live Nation had another record-setting quarter as music fans swarmed to concerts and continued to spend on live entertainment amidst persistent inflation, high gas prices and a resumption in student loan repayments in the United States. The concert promotion and ticketing giant posted third-quarter revenue of $8.2 billion, up 32% from the prior-year period, the company announced Thursday (Nov. 2). Adjusted operating income (AOI) rose 35% to a record $836 million.
A year ago, revenue reached a then-record $6.2 billion as artists returned to the stage after pandemic layoffs. In 2019, the last full year before the pandemic shut down the global touring business, Live Nation posted third-quarter revenue of $3.8 billion — 54% below what the company reported Thursday. Some growth since 2019 stems from acquisitions such as OCESA, the Mexican concert promoter Live Nation bought in 2021 for $416 million. But m uch of the record-setting result comes from the high number of touring artists and greater fan spending.
“While we have benefitted from tailwinds for many years, it has accelerated due to the globalization of our business along with a fundamental shift in consumer spending habits toward experiences,” president/CEO Michael Rapino said in a statement. “With the majority of opportunity still untapped from Milan to Bogotá to Tokyo and beyond, we expect the industry will continue growing in 2024 and for years to come.”
Through the first nine months of 2023, Live Nation’s revenue increased 36% to $16.9 billion and AOI rose 33% to $1.7 billion. Both nine-month figures were greater than Live Nation’s revenue and AOI for full year 2022.
In the concerts division, third-quarter revenue rose 32% to $7 billion and AOI grew 21% to $341 million. The number of fans at Live Nation concerts also grew 21% overall — 34% in international markets and 13% in North America.
Venue Nation, Live Nation’s venue management company for venues it does not own, increased ancillary revenue at operated venues. At amphitheaters, ancillary per-fan revenue was up 10% to $40 year to date. At theaters and clubs, ancillary per-fan spending rose in the double-digits globally.
Ticketmaster revenue grew 57% to $833 million while AOI jumped 94% to $316 million. Total fee-bearing gross transaction value was up 36% to $10 billion, with North America growing 32% and international markets climbing 49%. The ticketing company had 17 million net new client tickets in the first three quarters of the year.
Sponsorship and advertising revenue rose 7% to $367 million in the third quarter, while the division’s AOI improved 11% to $250 million.
Through mid-October, Ticketmaster sold 140 million tickets to Live Nation shows, up 17% year-over-year and surpassing the 121 million tickets sold in full-year 2022. Over the same period, the company sold 257 million fee-bearing tickets, a 22% improvement, and expects to surpass 300 million fee-bearing tickets in 2023.
For full-year 2023, the company expects 55 million fans at Live Nation-operated venues, up from 49 million in 2022. Ticketmaster expects full-year margins to remain in the high 30s through the fourth quarter. Sponsorship and advertising margins are expected to remain in the low 60s.
Looking forward to 2024, event-deferred revenue — ticket sales for future events — was up 39% to $2.6 billion through mid-October. About half of 2024’s expected show count has been booked for large venues — amphitheaters, arenas and stadiums — which is up double digits from the same point in 2022.
Revenue up 32% to $8.2 billion.
Adjusted operating income is up 35% to $836 million.
Year-to-date operating cash flow of $762 million, down from $928 million in Q3 2022.
Year-to-date free cash flow (adjusted) of $1.3 billion, up from $996 million in Q3 2022.
Ticketmaster revenue up 57% to $833 million.
Sponsorship and advertising revenue up 7% to $367 million.
Earnings per share rose 28% to $1.78.
Reports that singer Rihanna has inked a multi-year contract with Live Nation are “bogus” a source tells Billboard, pouring cold water on news that a live comeback for the superstar singer is imminent.
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On Sunday, the London-based Daily Mirror reported that the singer was planning a major world tour through 2024 and 2025 as part of a 32 million pounds ($39 million) deal with Live Nation. On Monday (Oct. 23), ET also ran a report saying Rihanna was “planning a world tour for 2024/2025 after striking a deal with Live Nation.”
But a high-level source who would be involved in such the talks said the 32 million pounds figure sounds made up and noted that “no tour has been confirmed for Rihanna.”
While promoters like Live Nation, or their competitive rival AEG, would be more than happy to book and a promote a global Rihanna tour, the source says “Bitch Better Have My Money” singer hasn’t yet committed to any touring projects for 2024.
As well, Live Nation has not placed any holds on venues for a potential tour. Typically, when a promoter begins booking a tour for a major artist, they will call different venues on the tour route and ask venue bookers to reserve various dates on their calendar to accommodate different routing scenarios for an upcoming tour. If Rihanna and Live Nation were to sign a deal, it would likely take several months to hammer out a potential tour route.
The demand for a Rihanna tour, and new music, is arguably unparalleled. She is one of the most commercially successful artists of all time, with 14 No. 1 hits on the Billboard Hot 100 chart, a record surpassed only by The Beatles and Mariah Carey. Her last album was 2016’s Anti and her last tour was the one that followed that year. It generated more than $110 million in sales worldwide, and since its final stop in Abu Dhabi on Nov. 27, 2016, she has not performed a commercial concert. She has since only performed three times, including at the Super Bowl halftime show in 2023 and the 2023 Oscars.
While a new global tour would surely net hundreds of millions in ticket sales and merchandise, Rihanna doesn’t exactly need that money. A March 10 story from the Wall Street Journal estimated Rihanna’s business empire to be worth $1.4 billion, thanks to the success of her record sales and cosmetic company Savage X Fenty, which she owns in partnership with luxury brand LVMH.
She also has a compelling reason not to want to hit the road – in August, she gave birth to her second child Riot Rose, whom she shares with rapper A$AP Rocky. The couple’s oldest son RZA was born in 2022.
Abu Dhabi-based music streamer Anghami led all music stocks this week after gaining 17.6% to $0.82. On Thursday, the company announced through an SEC filing it had received a written notification from the Nasdaq Stock Market regarding its closing share price being below $1.00 for the previous 30 days. The Nasdaq gives companies 180 days to regain compliance or face de-listing from the exchange.
The warning appeared to spur a 16.5% gain on Thursday as investors saw signs the share price won’t remain under $1. In its SEC filing, Anghami stated if the share price remains under the $1 threshold it will “consider available options to cure the deficiency,” including a reverse share split (which would increase the share price by reducing the number of shares outstanding while the market capitalization remains unchanged).
SiriusXM gained 5.7% on Friday (Oct. 13) and finished the week up 11.8%. Its $4.85 closing price was the highest for the satellite radio company since Aug. 9. The typically steady stock has fallen 17% this year as self-pay satellite radio subscribers stagnated at or around 32 million for eight straight quarters. SiriusXM will host a Nov. 8 presentation to unveil a new streaming app and preview upcoming in-car innovations and new programming.
The 21-stock Billboard Global Music Index fell 1.3% to 1,355.65 this week as 13 stocks were in negative territory and only eight stocks gained ground. Year to date, the index has gained 16.1%. Led by SiriusXM’s gain and a 7.6% increase from Cumulus Media, the index’s three radio stocks had an average improvement of 5.5%. Eight record labels and publishers had an average weekly gain of 0.3%. HYBE improved 6.8% while Believe climbed 3.6% and Universal Music Group added 0.6%. Streaming companies were, on average, flat this week.
Live music stocks dropped an average of 4.8%. Shares of Sphere Entertainment Co. dropped 11.1%, effectively offsetting the 11% gain on Oct. 2 following U2’s debut performances at Sphere in Las Vegas. Live Nation dropped 3.9%, MSG Entertainment fell 3.5% and CTS Eventim shares fell 0.7%. If investors are curious what’s next for Sphere Entertainment, clues comes from an interview published Thursday. Executive chairman and CEO James Dolan said the company is “actively pursuing other markets” and “has six different kinds of spheres down to a 3,000-seater.” A Las Vegas-style Sphere may not work in London, where according to reports residents are concerned about the location and light pollution that could arise from a massive external display similar to the Las Vegas venue.
Music stocks underperformed numerous indexes. In the United States, the S&P 500 gained 0.1% and the Nasdaq composite fell 0.3%. In the United Kingdom, the FTSE 100 gained 1.4%. South Korea’s KOSPI composite index rose 2%.
Stocks faded after the release of consumer sentiment data for October by the University of Michigan showed a decline from September based on “a substantial increase” in concerns about inflation. Expectations for inflation in one year rose from 3.2% in September to 3.8% this month. That’s the highest mark since May 2023 and substantially above the 2.3% to 3% range seen in the two years before the pandemic.
Also a factor in stock prices, the U.S. Federal Reserve expects to raise interest rates one more time, according to minutes released from its September policy meeting. Interest rates have an inverse relationship with equity prices. Higher interest rates make borrowing more expensive and cut down on corporate profits.
The escalating legal battle between Coldplay and its former manager Dave Holmes significantly stepped up this month when the band filed a counterclaim lawsuit in the U.K. courts seeking £14 million ($17 million) in damages.
The court filing comes two months after Holmes announced he was suing the four members of Coldplay — Guy Berryman, Jonny Buckland, Will Champion and Chris Martin — for more than £10 million ($12 million) in damages and unpaid commission relating to the band’s yet-to-be-released 10th and 11th studio albums.
Having examined legal papers filed in the U.K. courts on behalf of both parties, here’s Billboard’s rundown of everything we know so far about the acrimonious dispute between Holmes and his former star clients.
Why Holmes and Coldplay fell out after more than 20 years of success together
Although the precise cause of the fallout between Holmes and Coldplay is not detailed in either lawsuit, legal papers filed by the group’s attorneys on Oct. 5 state that the band made the decision to dismiss the manager last summer following “a period of increasing concern” about his conduct. (Holmes’ position as the group’s manager officially came to an end Dec. 31, 2022).
In particular, the four band members allege that Holmes breached his contractual obligations by “failing” to adequately manage costs for the group’s 2022-2023 Music of the Spheres World Tour leading them to suffer “significant financial losses.”
“Unjustified” touring costs
Examples of financial mismanagement cited in the countersuit include spending 10.5 million euros ($11 million) on the construction of 16 bespoke stage pylons and commissioning the manufacture of a bespoke audio-visual “Jet Screen” at a total cost of $9.7 million that was only used for 10 shows in 2022. Another third-party supplier, listed in legal papers as TAIT, was paid $8.8 million to construct staging for the tour.
Coldplay’s attorneys say that those costs were “disproportionate and unjustified” and, as a result of Holmes’ “failing adequately to supervise and control” the tour budget, the band incurred at least £17.5 million ($21.5 million) in costs “which would otherwise have been avoided.”
That version of events is disputed by sources close to Holmes who deny that the former manager was responsible for tour costs overrunning. Instead, people familiar with the situation tell Billboard that many production decisions relating to the Music of the Spheres were made under the guidance of the band’s long-term creative director Phil Harvey, who has co-managed the band since last summer (following Holmes’ exit) alongside Mandi Frost and Arlene Moon.
Live Nation loans
Coldplay’s lawsuit claims that Holmes breached his fiduciary duties by using his association with the act to borrow a total of $30 million in low interest loans from Live Nation to fund a personal property development venture in Canada. The loans were not fully disclosed to the group and, as such, were secured without its informed consent, claim the four members.
Coldplay’s attorneys argue that these loans – set at a fixed annual interest rate of 2.72% – placed Holmes in a potential conflict of interest when it came to securing the best possible deal for his clients from Live Nation.
At the time when Holmes was negotiating a deal with Live Nation in 2021 and 2022 to exclusively promote Coldplay’s Music of the Spheres tour outside of the United Kingdom, the manager owed the touring giant approximately $27 million, the court filing alleges.
In response, the band is asking the courts to grant it access to Holmes’ financial accounts detailing any profits resulting from the low interest loans and the payment of any monies due to them.
The so-called “Albums 10/11 Agreement”
Holmes’ lawsuit against his former clients’ centers around a proposed contract extension (the so-called “Albums 10/11 Agreement”) that he claims Coldplay entered into in 2021 with his California-based management company, DHMC, relating to its yet-to-be-released tenth and eleventh studio albums.
Attorneys for Holmes claim he is owed outstanding commission from record company advances the manager negotiated on the band’s behalf with its label, Warner Music Group-owned Parlophone Records. Those advances totaled £35 million ($44 million) for Coldplay’s 10th album and £15 million ($19 million) each for the group’s subsequent two studio albums.
In return, Holmes received two payments in 2021 of £1.5 ($1.9 million), each equivalent to a 10% commission fee, state the court documents. However, his attorneys claim he is still due outstanding payment from the remainder of the record company advances paid to Coldplay.
Clearing samples, arranging recording sessions and recruiting Max Martin as producer
Holmes’ lawsuit additionally claims he is due payment for “extensive services” his company carried out for the 10th and 11th albums (and related tours) prior to his termination as manager.
These services include arranging writing and recording sessions in Jamaica and London, clearing an instrumental sample from musician Hal Walker, arranging a recording session on a film set in Boston, and liaising with producer Max Martin’s manager to arrange recording and production sessions.
Holmes says his team also worked on planning promotional campaigns, as well as scheduling, marketing, budgeting, sponsorship and ticket pricing for the United States, Asia and Australia legs of the Music of the Spheres World Tour.
Attorneys for Coldplay’s four founding members dispute their former manager’s claim and say that negotiations between the two parties broke down before “any such agreement might have been signed.”
In its defense and counterclaim filing, the band is seeking repayment of £3 million ($3.7 million) paid to DHMC in 2021 as advances for the band’s 10th album.
What Holmes and Coldplay are saying outside of court
On Coldplay’s part, very little. When Holmes’ lawsuit was filed in August a representative for the band confirmed with Billboard that Holmes’ management contract with the four-piece expired at the end of 2022 “at which point they decided not to start a new one. The matter is now in the hands of Coldplay’s lawyers and the claims are being vigorously disputed.” Representatives of the group declined to comment when contacted by Billboard this week about Coldplay counterclaim lawsuit.
Responding to Coldplay’s legal action, which is dated Oct. 5, a spokesperson for their former manager said, “Accusing Dave Holmes of non-existent ethical lapses and other made-up misconduct will not deflect from the real issue at hand: Coldplay had a contract with Dave, they are refusing to honor it and they need to pay Dave what they owe him.”
The matter will now proceed through the U.K. courts unless a settlement can be reached.
Benji and Joel Madden, the creative forces behind pop punk outfit Good Charlotte, successful music management outfit MDDN and streaming service Veeps are launching their most ambitious project yet.
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Today the famous music brothers are launching Veeps All Access, a new Live Nation-backed online video subscription service built atop the Veeps live-streaming infrastructure developed and launched by the Maddens in 2018 and acquired by Live Nation in January 2021. All Access is a shift for Veeps, which has operated as a pay-per-view business up until now, charging customers to access live and on-demand streams by artists like Southern rockers Tyler Bryant and the Shakedown or soul and R&B star Miguel, typically priced between $9.99 to $14.99.
All Access will grant fans access to all live shows streamed through Veeps as well on-demand content, special artist exclusives and original programing including the newly greenlit “Sidehustles” and “Artist Friendly,” Joel Madden’s music interview podcast-turned-video talk show, premiering tomorrow (Oct. 4) with Brandon Boyd of Incubus.
The price of All Access is $11.99 per month or $120 for annual pass, which is in line with other popular streaming services like Disney Plus which increases from $10.99 per month to $13.99 per month on Oct. 12, or Paramount Plus, which is now bundled with Showtime at $11.99 per month. Veeps also has struck early partnerships deals with Samsung, Ticketmaster, and Verizon and will be available on the Veeps app on iPhone, Android, Apple TV or Roku service.
Veeps All Access will kick off today with the premiere of The Postal Service and Death Cab for Cutie’s sold-out show from AZ Financial Theater, October and November will feature performances from a wide range of artists, including Run The Jewels, performing a special 4-night series live from the Hollywood Palladium October 11-14, pop acts Macklemore, Jessie Ware and Chappell Roan; hard rock, indie and alternative acts A R I Z O N A, Bad Omens, Bishop Briggs, Boys Like Girls, Misterwives, Nothing But Thieves, Senses Fail, Frank Turner and Waterparks; shows from rap and soul artists like OhGeesy, Flatbush Zombies, Kiana Ledé and Phabo and country artists such as Darius Rucker, Jason Aldean and Shane Smith & The Saints. New shows will be added weekly.
Joel Madden tells Billboard that the mission of Veeps has always been to connect fans who can’t attend a concert with their favorite artists, even if the artist is not touring in their city or the show is already sold out. He adds that by providing an affordable subscription option, Veeps is also helping Live Nation drive most artist discovery, connecting fans with a wider range of artists and their fan communities.
Veeps All Access will also include a wealth of archived content from artists including 5 Seconds of Summer, Aerosmith, Amy Winehouse, Dierks Bentley, Fall Out Boy, Imagine Dragons, Katy Perry, J Balvin, Lainey Wilson, Mumford & Sons, Muse, Niall Horan, Norah Jones, Poppy, PVRIS, Rage Against the Machine, Rolling Stones, Shania Twain, Slipknot, Sting, The Killers, The Smashing Pumpkins, Yeah Yeah Yeahs,= and more. Veeps will be powered by a show recommendation engine and nearly all concerts are delivered with spatial sound capabilities and high-quality 4K streaming.
Joel said partnering with Live Nation on the project has been critical to the company’s expansion, noting “If we call anyone inside Live Nation for help, we get support and access to a great group of people.”
Benji Madden added “there’s a lot of generosity with their resources and experience,” noting that “It’s taken a lot of investment build out a Netflix-style experience, but it’s important because everyone involved in this project believes that the future of live entertainment is access.”
That means reaching the far corners of the globe where bands don’t always tour — or finding a way for a fan that can’t be at the show to “have the same access that fans expect for their sporting events,” Joel Madden said. “We know that music fans are going to expect access more and more access with artists and we know that Live Nation is the right partner for to provide that access.”
Kyle Heller, co-founder and chief product officer at Veeps tells Billboard “one of the things that has blown us away on this journey is the attention a viewer pays to a Veeps show. We live in a world of 15-second clips, short-form videos, and quick 20-minute episodes dominating the landscape but when people switch Veeps on it’s not unusual for them to watch 2+ hours of content, uninterrupted. It’s unlike anything I’ve seen before.”
Live Nation CEO Michael Rapino added, “Live performances have a unique magic, and Veeps has done an incredible job bringing fans that experience in their homes. All Access is giving fans a new way to discover music and artists another marketing platform that will only continue to fuel the demand for live with an even bigger world of concerts at our fingertips.”
Subscription plans will initially be available in the U.S. with international expansion planned to meet Veeps’ global usership. Learn more and sign up at veeps.com.
Nine months before Live Nation made the headline-grabbing decision to cut merch fees at 77 of its clubs and theaters across the country, Ineffable Music Group did it first. Now, the company’s CEO, Thomas Cussins, has a piece of advice for other independent venue owners and operators concerned that the concert giant is using this tactic to curry favor with artists and agents and squeeze out their businesses: Everything will be OK.
“Merch money is not what is going to keep us in business,” says Cussins, whose company oversees 10 venues across California, including The Catalyst Club in Santa Cruz, the Ventura Music Hall in Ventura and the Golden State Theatre in Monterey. “What causes independent venues to go out of business is the one in 10 shows where venues pay way too much relative to the draw and end up losing everything they made on the previous nine shows.”
Cussins made the decision to stop charging acts performing at his venues a cut of their merch sales — a standard industry practice — while watching a Jan. 24 Senate Judiciary Committee hearing about Ticketmaster. Cussins says it was members of the band Lawrence’s testimony about how much bands rely on merch money for touring that moved him to change the company’s policy: “It is money that most directly gets into the band’s pocket and the idea that we were taking away from that did not sit right with me.”
Since then, he says the decision has not hurt his business “at all.”
Still, independent venues remain concerned about what Live Nation’s new “On the Road Again” program will mean for them — how can they compete with the deals Live Nation is offering? The National Independent Venue Association (NIVA) released a statement on Wednesday (Sept. 27) following the news, saying, “Temporary measures may appear to help artists in the short run but actually can squeeze out independent venues which provide the lifeblood of many artists on thin margins.”
Thomas Cussins
Daniel Swan
The statement continued, “The initiative announced yesterday may seem like a move to follow the lead of some independent venues. It is not that. Instead, it appears to be a calculated attempt to use a publicly-traded conglomerate’s immeasurable resources to divert artists from independent venues and further consolidate control over the live entertainment sector. Such tactics threaten the vitality of small and medium-sized venues under 3,000 capacity, many of which still struggle to keep their doors open.”
A NIVA member since 2020, Cussins says he understands why some NIVA members may be upset that Live Nation’s policy might put pressure on their businesses. But, he adds, eliminating merch fees is a net positive for the entire live music ecosystem — one where everyone is benefiting.
“It’s difficult to operate a single venue in a market against Live Nation,” says Cussins. “Venues are low-margin businesses. I’m not here to say that no one should charge merch fees. What I am here to say is that it is my opinion that if you waive those fees, it is an overall healthier ecosystem and you will actually do better in business because you are doing something that makes the process easier.”
What was your reaction when you heard the news that Live Nation was going to waive merch fees for artists?
I was ecstatic. It’s something I’m very passionate about because it fosters a healthier concert ecosystem.
Were you worried about the financial hit Ineffable would take when you decided to eliminate merch fees at Ineffable venues?
No, because merch money is not what is going to keep us in business. What causes independent venues to go out of business is the one in 10 shows where venues pay way too much relative to the draw and end up losing everything they made on the previous nine shows. I think it’s more productive spending one’s time fostering a healthier ecosystem where everybody has a chance to make money. To me, that means not taking artists’ merch money and artists taking more door deals, where the artist has an opportunity to make the most money.
But is that realistic? For many artists, taking a door deal with no guarantee is too risky.
Correct. Some can’t take that risk. But many other artists understand they can make more money on a door deal and lower the risk the venue faces. For independent venues to be healthy, we need volume, which means we need bands to be healthy and touring and making enough money to support themselves. And the money made from merch most directly affects their ability to be out on the road and do well.
What is your reaction to the statement NIVA issued, saying the On the Road Again program is just an attempt to squeeze out indie venues?
They’re doing what they think is in the best interests of their members. We’re members of NIVA and they have done an incredible job for our business. I’m a huge fan. But my take is that merch money is not what’s going to keep these independent venues in business. What’s going to keep them in business is a healthy concert ecosystem, where we’re keeping the bands healthy and keeping them on the road with deals that are fair so that everyone can make a few bucks and eat at the table together and nobody is gouging the other person.
What is the biggest challenge facing artists on the road right now?
It is the travel costs — the price of gas, vehicle rentals, the price to pay crews. If you are going out there and you are doing the same business and your costs have increased 30%, how can you possibly make that up? You might just not tour. I know a lot of bands that have told me they were doing 80 dates a year and now they just want to do 40. They just want to pick the 40 best markets. That hurts independent small businesses. I’m seeing that firsthand. Artists that are in the prime of their career saying, “I want to work less, but each one has more meaning.” And I can’t blame them. But if they can do a longer tour and amortize those costs and play those small secondary markets, then I can be their partner on the ground in markets where I operate venues and keep my hands out of their merch money.
What advice do you have to other venues considering dropping their merch fees?
It’s not one-size-fits-all and it might not be the right solution for everyone. But I am so happy that we made that move — not only from an ethos standpoint, financially as well. It has not hurt me at all.
For some music companies, 2022 was the payoff for weathering the darkest days of the COVID-19 pandemic. When business returned that year — sometimes in record-setting fashion — these companies rewarded their executives handsomely, according to Billboard’s 2022 Executive Money Makers breakdown of stock ownership and compensation. But shareholders, as well as two investment advisory groups, contend the compensation for top executives at Live Nation and Universal Music Group (UMG) is excessive.
Live Nation, the world’s largest concert promotion and ticketing company, rebounded from revenue of $1.9 billion and $6.3 billion in 2020 and 2021, respectively, to a record $16.7 billion in 2022. That performance helped make its top two executives, president/CEO Michael Rapino and president/CFO Joe Berchtold, the best paid music executives of 2022. In total, Rapino received a pay package worth $139 million, while Berchtold earned $52.4 million. Rapino’s new employment contract includes an award of performance shares targeted at 1.1 million shares and roughly 334,000 shares of restricted stock that will fully pay off if the company hits aggressive growth targets and the stock price doubles in five years.
Live Nation explained in its 2023 proxy statement that its compensation program took into account management’s “strong leadership decisions” in 2020 and 2021 that put the company on a path to record revenue in 2022. Compared with 2019 — the last full year unaffected by the COVID-19 pandemic — concert attendance was up 24%, ticketing revenue grew 45%, sponsorships and advertising revenue improved 64%, and ancillary per-fan spending was up at least 20% across all major venue types. Importantly, Live Nation reached 127% of its target adjusted operating income, to which executives’ cash bonuses were tied.
The bulk of Rapino’s and Berchtold’s compensation came from stock awards — $116.7 million for Rapino and $37.1 million for Berchtold — on top of relatively modest base salaries. Both received a $6 million signing bonus for reupping their employment contracts in 2022. (Story continues after charts.)
Lucian Grainge, the top-paid music executive in 2021, came in third in 2022 with total compensation of 47.3 million euros ($49.7 million). Unlike the other executives on this year’s list, he wasn’t given large stock awards or stock options. Instead, Grainge, who has been CEO of UMG since 2010, was given a performance bonus of 28.8 million euros ($30.3 million) in addition to a salary of 15.4 million euros ($16.2 million) — by far the largest of any music executive.
This year, shareholders have shown little appetite for some entertainment executives’ pay packages — most notably Netflix — and Live Nation’s compensation raised flags at two influential shareholder advisory groups, Institutional Shareholder Services and Glass Lewis, which both recommended that Live Nation shareholders vote “no” in an advisory “say on pay” vote during the company’s annual meeting on June 9. Shareholders did just that, voting against executives’ pay packages by a 53-to-47 margin.
Failed “say on pay” votes are rare amongst United States corporations. Through Aug. 17, just 2.1% of Russell 3000 companies and 2.3% of S&P 500 companies have received less than 50% votes on executive compensation, according to executive compensation consultancy Semler Brossy. (Live Nation is in both indexes.) About 93% of companies received at least 70% shareholder approval.
ISS was concerned that the stock grants given to Rapino and Berchtold were “multiple times larger” than total CEO pay in peer group companies and were not adequately linked to achieving sustained higher stock prices. Additionally, ISS thought Live Nation did not adequately explain the rationale behind the grants.
To determine what Rapino, Berchtold and other executives should earn, Live Nation’s compensation committee referenced high-earning executives from Netflix, Universal Music Group, SiriusXM, Spotify, Endeavor Group Holdings, Fox Corporation, Warner Bros. Discovery, Inc. and Paramount Global. Netflix co-CEOs Reed Hastings and Ted Sarandos were paid $51.1 million and $50.3 million, respectively, in 2022. Warner Bros. Discovery CEO David Zaslov made $39.3 million in 2022 — including a $21.8 million cash bonus — a year after his pay totaled $246.6 million, including $202.9 million in stock option awards that will vest over his six-year employment contract. Endeavor CEO Ari Emanuel and executive chairman Patrick Whitesell received pay packages worth $308.2 million and $123.1 million, respectively, in 2021 thanks to equity awards tied to the company’s IPO that year (the received more modest pay of $19 million and $12.2 million in 2022).
Some companies in the peer group didn’t fare well in “say on pay” votes in 2023, though. Netflix, got only 29% shareholder approval in this year’s say-on-pay advisory vote after Hastings’ and Sarandos’ compensations both increased from higher stock option awards while the company’s stock price, riding high as COVID-19 lockdowns drove investors to streaming stocks, fell 51% in 2022. Warner Bros. Discovery’s 2022 compensation squeaked by with 51% shareholder approval.
Minutes from UMG’s 2023 annual general meeting in May suggest many of its shareholders also didn’t approve of Grainge’s compensation. UMG’s 2022 compensation was approved by just 59% of shareholders, and the company’s four largest shareholders own 58.1% of outstanding shares, meaning virtually no minority shareholders voted in favor.
UMG shareholders’ votes could be meaningfully different next year. Anna Jones, chairman of the music company’s remuneration committee, said during the annual meeting that in 2024, shareholders will vote on a pay package related to Grainge’s new employment agreement that takes minority shareholders’ concerns from the 2022 annual meeting into consideration. Grainge’s contract lowers his cash compensation, and more than half of his total compensation will come from stock and performance-based stock options.
Other companies in Live Nation’s peer group received near unanimous shareholder approval. SiriusXM’s 2022 executive compensation received 98.5% approval at the company’s annual meeting. Paramount Global’s executive compensation was approved by 96.4% of its shareholders. Endeavor didn’t have a “say on pay” vote in 2023, but a year ago, it’s sizable 2021 compensation packages were approved by 99% of voting shareholders.
As the radio industry came back from pandemic-era doldrums, two iHeartMedia executives — Bob Pittman, CEO, and Richard Bressler, president, CFO and COO — were among the top 10 best-paid executives in the music industry. It was new employment contracts, not iHeartMedia’s financial performance, that put them into the top 10, however. Both executives received performance stock awards — $6.5 million for Pittman and $6 million for Bressler — for signing new four-year employment contracts in 2022. Those shares will be earned over a five-year period based on the performance of the stock’s shareholder return. Neither Pittman nor Bressler received a payout from the annual incentive plan, however: iHeartMedia missed the financial targets that would have paid them millions of dollars apiece. Still, with salaries and other stock awards, Pittman and Bressler received pay packages valued at $16.3 million and $15.5 million, respectively.
Spotify co-founders Daniel Ek and Martin Lorentzon once again topped the list of largest stockholdings in public music companies. Ek’s 15.9% stake is worth nearly $4.8 billion while Lorentzon’s 11.2% stake has a market value of nearly $3.4 billion. Both Ek and Lorentzon have benefitted from Spotify’s share price more than doubling so far in 2023. In September 2022, the inaugural Money Makers list had Ek’s stake at $3.6 billion and Lorentzon’s shares at $2.3 billion.
The billionaire club also includes No. 3 HYBE chairman Bang Si-hyuk, whose 31.8% of outstanding shares are worth $2.54 billion, and No. 4 CTS Eventim CEO Klaus-Peter Schulenberg, whose 38.8% stake — held indirectly through his KPS Foundation non-profit — is worth $2.25 billion. They, too, have benefitted from higher share prices in 2023. Last year, Bang’s stake was worth $1.7 billion and Schulenberg’s shares were valued at $2.1 billion.
These top four shareholders and three others in the top 10 have one important thing in common — they are company founders. At No. 5, Park Jin-young, founder of K-pop company JYP Entertainment, owns a $559 million stake in the label and agency he launched in 1997. Another K-pop mogul, No. 8 Hyunsuk Yang, chairman of YG Entertainment, owns shares worth $199 million in the company he founded in 1996. And No. 9 Denis Ladegaillerie, CEO of 18-year-old French music company Believe, has a 12.5% stake worth $112.7 million.
Live Nation’s Rapino again landed in the top 10 for amassing a stockholding over a lengthy career, during which he has helped significantly increase his company’s value. Rapino, the only CEO Live Nation has ever known, took the helm in 2005 just months before the company was spun off from Clear Channel Entertainment with a market capitalization of $692 million. Since then, Live Nation’s market capitalization has grown at over 20% compound annual growth rate to $19.1 billion. Rapino’s 3.46 million shares represent a 1.5% stake worth $291 million.
Selling a company that one founded is another way onto the list. Scooter Braun, CEO of HYBE America, has a 0.9% stake in HYBE worth $69.8 million. That’s good for No. 10 on the list of executive stock ownership. Braun, HYBE’s second-largest individual shareholder behind chairman Bang, sold his company, Ithaca Holdings — including SB Projects and Big Machine Label Group — to HYBE in 2021 for $1.1 billion.
These rankings are based on publicly available financial statements and filings — such as proxy statements, annual reports and Form 4 filings that reveal employees’ recent stock transactions — that publicly traded companies are required by law to file for transparency to investors. So, the list includes executives from Live Nation but not its largest competitor, the privately held AEG Live.
Some major music companies are excluded because they are not standalone entities. Conglomerates that break out the financial performance of their music companies — e.g., Sony Corp. (owner of Sony Music Entertainment) and Bertelsmann (owner of BMG) — don’t disclose compensation details for heads of record labels and music publishers. Important digital platforms such as Apple Music and Amazon Music are relatively small parts of much larger corporations.
The Money Makers executive compensation table includes only the named executive officers: the CEO, the CFO and the next most highly paid executives. While securities laws vary by country, they generally require public companies to named executive officers’ salary, bonuses, stock awards and stock option grants and the value of benefits such as private airplane access and security.
And while Billboard tracked the compensation of every named executive for publicly traded music companies, the top 10 reflects two facts: The largest companies tend to have the largest pay packages and companies within the United States tend to pay better than companies in other countries.
The list of stock ownership is also taken from public disclosures. The amounts include common stock owned directly or indirectly by the executive. The list does not include former executives — such as former Warner Music Group CEO Stephen Cooper — who are no longer employed at the company and no longer required to disclose stock transactions.