Michael Rapino
If 2023 was the year of Taylor Swift, 2024 could be the year of the superfan.
While Swift’s The Eras Tour proved that music fans are willing to spend large sums and travel far to see their favorite artist, for years promoters have improved their revenues by selling premium experiences to concerts and festivals. Whether it’s dynamically priced seats close to the stage, VIP access or a revamped cocktail offering, there are more options for fans willing to pay more to enjoy the sights, sounds and hospitality of live music. Expect an even greater emphasis on this in the new year.
The focus on superfans isn’t confined to live music. The CEOs of Universal Music Group and Warner Music Group both started the year by highlighting a desire to better serve superfans. In the recent past, that may have meant NFTs and newfangled web3 offerings. Today, superfans buy multiple copies of albums (both LP and CD) and merchandise, often directly from the artist’s web store. Streaming services could soon be getting into the game, too, by offering “superfan clubs,” Spotify CEO Daniel Ek suggested in a Jan. 24 open letter.
But live music has a unique ability to upcharge for premium experiences — and add to companies’ bottom lines in the process. Tickets for superstar acts have proven to have remarkably resistant to price increases. In 2023, the average price of a Taylor Swift concert ticket on Stubhub was nearly $1,100. Drake, Morgan Wallen and Beyonce prices averaged about $450, $390 and $324, respectively.
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Emphasis on superfans makes sense in an era of higher priced primary tickets that capture value that would otherwise go the secondary market. Artists are increasingly willing to charge more up front rather than lose money to re-sellers. Still, the typical secondary ticket is still almost twice the price of a primary ticket, Live Nation president and COO Joe Berchtold said during the company’s earnings call on Thursday. Currently, about 9% of Live Nation’s amphitheater business comes from premium offerings such as VIP boxes, added president and CEO Michael Rapino. He thinks that should be 30% to 35% instead. To get those numbers, Live Nation is upgrading the concert experience.
This year, Live Nation plans to spend $300 million of its $540 million of capital expenditures on revenue-generating projects. The top four projects — including Foro Sol in Mexico City and Northwell Health at Jones Beach on Long Island — will account for $150 million of the $300 million. The other half includes several projects in the tens of millions of dollars such as VIP clubs, viewing decks, rock boxes and new bar designs, said Berchtold. Those “tactical improvements,” as he called them, can produce a return on investment in the 40–50% range.
Putting more emphasis on revenue-generating enhancements will boost the bottom line in 2024. Following a stadium-heavy touring slate in 2023, Live Nation will put more tours in owned and operated amphitheaters and arenas that allow the company to capture fan spending on parking and hospitality. Stadium shows have higher average ticket prices, Rapino explained, but amphitheater and arena shows produce higher per-person spending. In other words, the venues are smaller but have better margins for the promoter. As a result, Live Nation expects higher adjusted operating income in the second and third quarters. “We’re going to have a fabulous year,” said Rapino.
Dynamic pricing — seats closer to the stage are priced far above seats further away — is just getting started outside of the United States and presents “a great growth opportunity” as it expands from Europe to South America and Australia, said Rapino. There’s room for growth in the United States, too, as dynamic pricing extends beyond the top artists and into amphitheaters and other concerts. “We still think that’s a multi-year opportunity to continue to grow our top line plus [our] bottom line,” he said.
The price-conscious fan isn’t forgotten as concerts increasingly cater to big spenders. Live Nation offers a lawn pass for amphitheaters called Lawnie Pass — the 2024 edition costs $239 each and offers lawn admission to multiple shows at select amphitheaters — and sold an unlimited pass for select clubs called Club Pass in 2022. And company executives have repeatedly stated that a benefit of dynamic pricing is that higher prices for in-demand seats allow for lower prices for seats further from the stage.
But from live music to music streaming, companies are searching for ways to beef up their margins. As such, expect the market to continue segmenting into higher-value and lower-value fans.
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.
In a rare investor reproach for Live Nation, at the company’s annual meeting held earlier in June, a majority of its shareholders voted against ratifying chief executive Michael Rapino‘s $139-million pay package for 2022.
In an advisory say-on-pay referendum on June 9, more than 53% of votes cast rejected the 2022 compensation packages for promoter Live Nation’s named executives — Rapino, president and CFO Joe Berchtold, chief accounting officer Brian Capo, executive vp John Hopmans and general counsel Michael Rowles, according to a filing released on June 15. In contrast, 94% of the votes cast at its 2020 shareholder meeting were in favor of the say-on-pay proposal, according to Live Nation.
As the shareholder vote was advisory and non-binding, Live Nation’s board will have the ultimate say on any future actions around executive compensation.
Shareholder rebukes like this are rare, and it comes as the Ticketmaster owner is already under fire from fans and regulators over its role in the Taylor Swift Eras Tour ticket debacle. As of May 31, only 1.5% of companies in the Russell 3000 index have failed Say on Pay votes so far this year, according to a report by Harvard Law School’s Forum on Corporate Governance.
In Live Nation’s proxy statement, the company said it believes its “compensation program is reasonable, competitive and strongly focused on pay for performance principles.” A company spokesperson did not respond to requests for comment.
“We believe that the fiscal year 2022 compensation paid to our named executive officers was appropriate and aligned with Live Nation’s fiscal year 2022 results,” the company stated in its proxy, citing the company’s 44% growth in revenue to $16.7 billion in 2022.
Influential shareholder advisory groups Institutional Shareholder Services (ISS) and Glass Lewis recommended shareholders vote against Live Nation’s executive officers’ compensation, citing a “misalignment” between pay and performance in the structure of certain stock equity grants.
ISS actually estimates Rapino’s 2022 compensation higher than what Live Nation published in its proxy — at $156 million for the year. The group raised specific concerns over a “mega grant” Rapino received in July 2022 that it said was worth $120.5 million and a similar award CFO Berchtold received worth $52.6 million. ISS contends the grants were not adequately linked to achieving sustained higher stock prices. Total Live Nation shareholder returns were negative over a one-year period and underperformed the S&P 500 Index, ISS says.
“The current structure could reward these executives for short-term or merely temporary increases in stock price,” ISS researchers wrote, adding that the large one-time equity grants paid were “multiple times larger than the total CEO pay for the company’s peer group…lack clear disclosure regarding the rationale for the size of the awards and other details necessary to assess them.”
Glass Lewis also raised concerns over cash signing bonuses of about $6 million received by Rapino and Berchtold.
“The (bonuses) are not subject to any performance or recoupment provisions,” Glass Lewis researchers wrote. “Such pay levels on a one-time basis outpace total compensation levels afforded executives at some of the largest companies in the U.S. despite being subject to considerably weaker vesting and performance conditions.”
Additional reporting by Glenn Peoples.
The concert travel business, once a reliably modest slice of the estimated global $25 billion concert industry, is being primed as a potential growth category as promoters of all sizes look for new revenue sources to offset rising costs.
As the pandemic has receded and the demand for live entertainment has blossomed, inflation and scarcity have driven up expenses across the board, and the resulting rise in ticket prices is unlikely to cool soon — a recent report from the American Bus Association cited a driver shortage as part of the reason for higher costs and concluded another 7,300 drivers would need to be added to the 28,000 tour bus drivers now working just to meet current demand.
With already tight margins squeezed further, concert promoters are looking for new revenue streams. “Many are seeing the economic impact their events create within their community and realize they’re not participating in that upside, despite taking on the bulk of the risk with their event,” explains Daren Libonati, co-founder of Las Vegas-based Fuse Technologies, which partners with concert promoters to source and sell accommodations and VIP upgrades for their events.
Libonati, a longtime Vegas event veteran who has served as an executive at both MGM and the University of Nevada Las Vegas, wants to help music event organizers unlock “travel per caps,” a twist on the phrase “per caps,” the concert business measurement of the spending on food and beverage per patron at an event. Tapping into travel spending could unlock major value. A March study commissioned by Live Nation found that its marquee Lollapalooza festival generated $270 million for Chicago last year, with fans spending $48.5 million on hotels and over $80 million on food and beverage.
Libonati is just one of a half dozen entrepreneurs who believe that event producers who draw fans from around the world to festivals and concerts should share in the hotel and hospitality revenue those fans generate. These entrepreneurs include Live Nation CEO Michael Rapino, whose company announced a new travel and hospitality firm, Vibee, in April, which is producing a premium cruise based on Electric Daisy Carnival called EDSea and was behind a Resorts World hotel takeover during the flagship dance festival in May. They’re bringing new ideas to market just as two of the biggest players in concert travel have either gone bankrupt or pulled out of the music travel industry.
Pre-pandemic, three types of businesses were involved in concert travel: destination festivals, mostly in Mexico and the Caribbean; high-end packaging as an add-on for domestic events; and music-driven cruises.
Demand for music-driven cruises has been stronger than prior to the pandemic, but those packages are difficult for promoters to make substantial margins on because of the high fixed costs of chartering vessels and hiring crews, as well as the pressure to keep prices low against competing cruise lines.Hotels have lower fixed costs than cruises and come with different expectations: Customers are used to paying a premium for hotel inventory during periods of high demand. That was what helped drive the success of two of the biggest concert travel companies during much of the last two decades, CID Entertainment and Pollen.
CID focused on creating destination events like Luke Bryan’s long-running Crash My Playa at Riviera Cancun in Mexico, as well as travel packages similar to those it put together for the Grateful Dead’s 2015 Fare Thee Well concerts in San Francisco and Chicago. Pollen helped expand hospitality and VIP offerings for events like Bestival, a four-day event held in the south of England.
Pollen, founded in 2014, raised over $200 million from venture capital investors. But the pandemic stalled business, and a series of last-minute cancellations — including a January 2022 J Balvin event in Cancun — cost the company dearly. By October 2022 Pollen had collapsed, owing nearly $100 million in debt.CID Entertainment, launched by Dan Berkowitz in 2007 and purchased by a private equity group in 2016, was merged with a number of sports travel companies in 2020 and eventually sold to entertainment conglomerate Endeavor, where it operates as OnLocation and focuses mainly on big-ticket sporting events like the Super Bowl.
With CID Entertainment and Pollen out, companies like 100x, which Berkowitz launched earlier this year, and Fuse see a gap in the market they can fill. Fuse has been racing to expand its white-label software systems, which make it easy to tack partner hotels and add-on VIP events to a festival’s website for sale, divide revenue and handle credential management and verification through an integration with the ticketing company. The revenue lift from packaging and bundling these items with ticket purchases would then be split with promoters.
Live Nation has made the fastest inroads into the space with Vibee. It launched as both a facilitator of high-end destination events, like the Nov. 9-12 Chasing Sunsets festival in Cabo San Lucas, Mexico, headlined by Tiësto with prices (tickets and hotel included) ranging from $999 to $3,259, and an entrant into the hospitality business for Live Nation’s traditional headline concerts, offering hotel packages paired with VIP upgrades for U2’s U2:UV Achtung Baby shows at the MSG Sphere in Las Vegas. Those packages have already yielded a $20 million boost to revenue from ticket sales for Live Nation and its partners at the Sphere and the Venetian hotel, Rapino explained during a recent investor earnings call.“Vibee is a product where we looked at OnLocation and CID and others that were doing it,” Rapino said. “The challenge these other companies have is the expensive part: the rights. We don’t have that problem.” He added, “These are our rights. We can do it in-house. We don’t have to outsource it and split any of that upside with anyone else but our own businesses.”
That leaves the rest of the sector competing for non-Live Nation events, which by some estimates equals 40% to 50% of the business and billions of dollars in potential revenue. Berkowitz has not yet revealed his plans or business strategy for 100x, while Libonati says that for now, Fuse plans to focus on creating add-on packages for existing events.
Can either firm make enough money to survive without also operating as an event promoter? It will take the right combination of scale and volume, but given the rebound in travel spending across the board — and engagement of dedicated fans — it seems possible.
Danny Robson, co-founder of management firm Leisurely, believes the answer is yes if the artist controls the event. Robson’s client Rüfüs Du Sol sold an impressive 8,000 tickets for the Australian EDM trio’s Sundream festival — a four-day event in San Jose Del Cabo, Mexico, where prices ranged from $700 to $2,000 per person — without a promoter or any outside help.
“The same changes in the business that make destination events lucrative for promoters,” Robson says, “also make these types of events profitable for artists interested in cutting out the middleman.”
Live Nation chief executive Michael Rapino was in Washington D.C. over the weekend, hosting his own party around the White Correspondents Dinner on Saturday.
The Axios After Hours Presented by Live Nation party on Saturday was held at the National Building Museum with media partner Axios after the White House Correspondents dinner ended and included a private performance from rising country star Lainey Wilson.
Rapino, who received $139 million in salary and stocks last year, according to a SEC fillings, isn’t a major political donor and hasn’t appeared at a major congressional hearing in a decade. But with the Live Nation-owned Ticketmaster coming under fire from lawmakers in recent years over long-standing concerns about anti-competitor business practices and the Taylor Swift ticketing crash in November, Rapino’s presence capped off a frenzied lobbying effort over the last two years to build a political base for the company.
Financially, Live Nation had its best year ever in 2022, posting a record $16.7 in revenue last year and $732 million in income. But the growing music conglomerate has largely been politically inactive in the years following its 2010 merger with Ticketmaster.
That changed in 2019 when the Department of Justice recommended extending a consent degree governing the 2010 merger. Last election cycle, Live Nation spent $1.4 million lobbying Congress, more than it has ever spent before. That spending is expected to continue unabridged in 2023 as Live Nation continues to lobby for ticketing reform legislation to curb illegal scalping activities, floating its own FAIR ticketing proposal as as a possible model for legislation.
Live Nation CEO Michael Rapino’s total compensation package rose to $139 million in 2022, up from $13.8 million the previous year.
Rapino’s compensation included a base salary of $3 million, up from $2.6 million in 2021 (which came as Rapino agreed to take a pay reduction during the pandemic). Live Nation entered into a new employment agreement with Rapino in July 2022, ending Dec. 31, 2027, which meant he also earned a $6 million signing bonus.
The executive also earned a $12 million annual cash performance bonus for 2022 and stock awards of $116 million, some of which vest in early 2024, while others vest in four installments through 2027 if the company reaches certain stock price targets.
CFO Joe Berchtold also saw his overall compensation jump to $52.4 million in 2022, up from $5 million the prior year. His base salary increased slightly to $1.3 million from $1.1 million, and he also earned a signing bonus of $6 million and an annual cash performance bonus of $2.5 million. Berchtold received $42.4 million in stock awards.
These pay bumps come after a rocky year for the company.
The Ticketmaster, which falls under Live Nation Entertainment, has faced backlash since its site experienced errors and site slowdowns during its Taylor Swift presale for verified fans in fall 2022. Since then, the company has faced pushback from lawmakers over its merger of Ticketmaster and Live Nation and is said to be undergoing an investigation by the Department of Justice. At the same time, concert attendance has been on the rise, as has the company’s revenue.
This article was originally published by The Hollywood Reporter.
Live Nation president/CEO Michael Rapino is once again dipping into his personal bank account to convey his financial support and commitment to the concert promotion company he’s been building since 2005. On Friday (March 31), he purchased approximately $1 million worth of company stock “in order to maintain his strong level of stock ownership in the Company,” according to a recent Securities and Exchange Commission filing.
The purchase is a bit confusing since it was part of a tax withholding effort and was technically listed as a sale of shares by Rapino rather than an acquisition. But just as he did in March 2020, Rapino spent approximately $1 million of his own money to increase the number of Live Nation shares he held in his portfolio.
Rapino made the March 2020 purchase just as the company’s share price, and most of the stock market, was being battered by fears of a deep recession due to the COVID-19 pandemic. At the time, the company was trading at $38.60 per share, down nearly 50% from weeks earlier when the stock was trading at approximately $74 per share.
Today, that $1 million Rapino invested in the company in 2020 is worth $1.8 million, with the Live Nation stock hovering around $68 to $70 per share — better than it was during the early days of the pandemic, but lower than shareholders want considering that the company enjoyed record revenue in 2022 and is poised for a big 2023 with superstar artists like Beyoncé, Drake and Madonna hitting the road. Rapino’s latest purchase is a way to shore up confidence in the company as it heads into another promising year.
Dragging the company’s share price down are concerns about debt and regulatory pressure from Washington, D.C. Live Nation carried $3.7 billion in debt prior to the pandemic and now shows a debt level of $6 billion. With nearly $5.1 billion of that debt set at a fixed interest rate, the company will easily be able to service its interest payments, but it’s unlikely to raise additional capital for acquisitions in the short term due to federal monetary shifts toward higher interest rates. On the regulatory front, the company is facing both long-term scrutiny over its 2010 merger with Ticketmaster and more recent attention over its handling of the 2022 ticket sale for Taylor Swift‘s Eras Tour.
Friday’s purchase was structured differently than the March 2020 purchase, which saw Rapino buy the $1 million in company shares off the open market. Instead, it was part of a share surrender by Rapino and other executives over taxes due on vested restricted stock awards. As part of the company’s equity incentive plan, Rapino was to surrender 22,204 shares of restricted stock back to the company to cover withholding taxes but opted to pay $1 million out of his own pocket toward taxes due on his 2022 stock award, “hereby retaining ownership of 14,285 shares of common stock of the Company that would have otherwise been surrendered to the Company to pay taxes,” according to the SEC filing.
Rapino currently holds 5.2 million shares of Live Nation, consisting of 3.5 million shares of common stock, options to purchase an additional 600,000 shares and a performance share award targeted at 1.1 million shares of common stock.
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