The Compound and Friends - Live from The Compound with Michael Rapino

Episode Date: May 24, 2022

On this special episode of Live from The Compound, Live Nation CEO Michael Rapino joins Downtown Josh Brown and Michael Batnick! Follow Michael Rapino: https://twitter.com/Michael_Rapino Check out The Compound shop: https://idontshop.com Follow The Compound on Instagram: https://instagram.com/thecompoundnews Follow The Compound on Twitter: https://twitter.com/thecompoundnews Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello everybody and welcome to The Compound. Thank you so much for joining us this evening. It's Monday night and you know if we schedule something for Monday night, we're usually bringing on somebody special tonight. I am so excited to introduce you guys to somebody who I have admired from afar for a long time, and I'm actually a shareholder of his, Michael Rapinoe, who is the president and CEO of Live Nation, and probably one of the most influential people in music. Is that a stretch, or do you think you are? How would you phrase it? You know, live is pretty important to the artist. I think, you know, as we say, it's 90% of their revenue.

We spend about $6 billion at midnight. So I think live's a pretty good partner to the business. Okay, so you're going to own that. You're a pretty influential guy. Listen, I want to give people your backstory because it's amazing. And I know it secondhand from, from Brooke and you know, I've read a bunch about you, but I want to hear it in your own words because I want people to understand

the vision behind what you started, where you came from so that they, and then we're going to talk about live nation as it stands today, which $20 billion publicly, publicly traded company, absolute giant in the music biz. But where did it all come from and where did you come from? Right.

The condensed story is I grew up in a small town, Thunder Bay, Canada, went to university at Lakehead University, ranked very high on the social calendar in Canada. It's a beer-drinking capital. So I started booking shows in college, and I did a great show with Jeff Healy, Canadian artist, and some local promoters. Loved the business. And at the time, in Canada, there was a Rolling Stones Steel Wheels tour. Some other promoters were working. And I just loved the idea of being the promoter, sitting backstage, putting the show on. And I had one of my mentors, Robert Peters, and I sat in a bar in Thunder Bay on a napkin,

said, I want to build the largest live entertainment company in the world. I just saw how special it was. Now, I did know, though, one thing I would say is I was smart enough to know in the world. I just saw how special it was. Now, I did know, though, one thing I would say is I was smart enough to know in the music business, I needed to go get some real skills first. And I went and worked at Labatt Breweries, who was the largest concert promoter in Canada. They own the largest promoter. They own the Blue Jays. So I worked 10 years there, which was really, I think, the secret sauce. I got 10 years of packaged goods, real hard strategy, brand marketing. I was also in charge of sports and entertainment there.

So I dealt with big bands. I dealt with the Blue Jays and entertainment. But it was really, I think that was a magical time of understanding big business strategy, had a great mentor. And then I left and started my own company in Canada called Core Audience with Steve Herman and went on my own, got my first private equity loan, started building there and ended up selling to SFX, Bob Sillerman. And then so SFX sells to Clear Channel.

Clear Channel. And then you're playing really in the big leagues at Clear Channel, which was probably very important to seeing the very, very high-level, top-down view of the business. Right. I didn't even know. Clear Channel bought them a month later. And then the second lucky thing I got is I went to London, and they asked me to stay in Europe and build international, which I think is the critical part of my career, because you can get very, very consumed if you're sitting in New York with just the New York concert and the US

model. And I went to Europe and started traveling, and Clear Channel called up and said, we're going to spin this off. It doesn't work for us anymore. And they recruited, looked at a few options. And they recruited, looked at a few options. I had, at that point, built international from zero to a strong business. And the Mays family, Randall Mays, big fan, said, why don't you spin this off? And we had six months to come up with a name and a strategy, and we spun it off then. So I think my Labatt background, a big business understanding, business plans, I went to university to be an accountant because my dad's an accountant. So I've got a good right brain, left brain, I guess. But that early stuff was the foundation. A lot of people in the

music business start too early, get one skill set, but maybe not wide enough. And I think going to Europe was just, I think the biggest strategy I learned in Europe is this is a global business. It's not a US business. And you've got to think globally if you're going to play long. So Europe had big festival shows before the United States, I think. They were early to that? Do I have that right? Yeah, because two different models, right?

There's no basketball, hockey outside of America. So you don't have the arena network that you have here, right? There's no basketball, hockey outside of America. So you don't have the arena network that you have here, right? So every city, everyone has a garden and that's the go-to play in town. Where over there, you've got soccer stadiums with 80,000, doesn't work every day. So festivals have long kind of been in the business. They started in the streets, Italy, et cetera. They're common to have a community festival. And then Glastonbury became kind of the MSG of festivals in Europe. So our business over there is lots of festivals versus here, lots of arena tours, if you wanted to compare. Slowly some new arenas being built, but festival business. What I learned in Europe that really changed my management style is I remember when I was there, one of my US bosses said to me, you have no head office.

Where's your big head office? And I went to the one, we bought a promoter in Holland. And I went to him and said, you should be the vice president of festivals for Europe. You know festivals. And he's like, Rapinoe, I'm a Dutch promoter. I'm not telling the Germans or the UK, the Brits what to do. So I really learned that to be a good leader, you've got to actually have really good people decentralized. Not about a central office barking down to the field, but real entrepreneurship at the bottom up. And the only way those

entrepreneurs stay in a big company is you've got to find that balance of letting entrepreneurs be creative and do what they do best while still guiding a global strategy, but not over-managing them. And that's really, if you look today, what we're made up of 100 offices in 40 countries, management companies, promoters. These are real, real entrepreneurs that we've been able to keep over and over because we try to find that model where my head office is very small. I don't have a big empire that barks down. We have a decentralized organization that stays very, very creative and works its way

up. So that's what I learned in Europe. Head offices don't work. So some of the most successful publicly traded companies in America have that same decentralization theme to the way they've built themselves out. I mean, Berkshire Hathaway being an obvious example, he's got 30 people in the home office in Nebraska. And the people that really are running the show are running the show locally where it counts. Well, it takes a, it's a little like FOMO, right? You know, I learned early that the hardest part about being the leader is having a small to-do list and a big don't do list.

But it's really easy to have a big head office. Like I would love 22 other VPs on this floor giving me data points around festivals and sales. And I get to guarantee you the minute I do that, my entrepreneurs aren't staying. Because there's that tension of as you get bigger, innovators dilemma, how do you run a big company, but keep entrepreneurial spirit alive? Generally, the bureaucracy of head office will kick that out. So you got to find this governance, where it where you have global strategy and global governance, but you want entrepreneurs, Roc Nation, your management companies, C3 and festivals, Insomniac this weekend in EDC put together one of the greatest

shows ever if you go look online. These are great entrepreneurs that want to run their business their way. Yeah, you guys have taken ownership of some of the biggest festivals or annually recurring shows that, in their own right, have a huge brand name. And it seems from the outside looking in, in large part, you let them run their show that made it famous. There's something they're doing that people like about it. that made it famous. There's something they're doing that people like about it. So you don't have people in New York or LA infiltrating that event and turning into something that would be maybe a little bit more vanilla or lowest common denominator. Like you're letting these things be

special, which I think is really admirable. Yeah. Yeah. Synergy is a, you know, it's very overplayed at times, right? You can have, you want back office synergy and corporate. There's a lot of things you can synergize that the entrepreneur doesn't care about. But, you know, Herman Sherman in Belgium, who's been a legendary promoter forever that runs the Rector Festival his way, he doesn't want me saying, here's my president of global festivals telling you what to book. Holland are the most entrepreneurial. Mojo, Leon Ramaker, Pink Pop, and others.

So yeah, having this real local entrepreneurial flair, letting these entrepreneurs coexist in a big company, that's the hardest part you have when you're running this kind of model. Okay, so 2010, Live Nation is formed. It's a combination of Ticketmaster and Live Nation. No, you missed it. No, no. So we launched 2005 Live Nation launch.

Excuse me. I was thinking of the merger as 2010. Yeah, yeah. The only reason I say is because the Ticketmaster, you know, that was a pivotal moment. We launched in 2005 as a small concert company, and we outsourced to Ticketmaster. And I always had a few core principles. One, that we had to go direct to consumer. I was obsessed

back then that if we didn't own the customer relationship, we would be squeezed in the middle. The artist would win, and whoever talks to the customer. So I only say this because it was a pivotal moment for us. We made about $110 million EBITDA. I think 90 came from Ticketmaster. And I went to the board and said, I can't renew, even though they're going to offer us 110th. If we don't own the customer, we're going to be screwed. We can't build our sponsorship business.

We won't own the data. We won't be valuable. So that was a huge monumental move for us, not to take the big check, to walk away from Ticketmaster, launch our own ticketing company, to then have Ticketmaster get spun out. And then Barry and I and Irving sat down and said, why don't we put them together? If I had renewed earlier, they don't need us. It's a very different story. And I only say that because I do believe we kind of did Netflix or Spotify. We kind of went consumer direct early as a B2B business.

And we knew that if we own the customer, that was going to be foundation to our data, our advertising, and being valuable to the artist. Now, I say it because that bet was huge. advertising and being valuable to the artist. Now I say it because that bet was huge. I mean, I would say to the board, this was a CEO that put his job on the line because on January 1, I was either going to replicate that 90 million from Ticketmaster and be able to ticket, or it was going to collapse. It wouldn't work. But I was such a big volume of Ticketmaster, I knew we had to make that bet and own the customer direct. So Ticketmaster at that time was part of IAC, Barry Diller's group? Well, they had just done that spun where he broke IAC into five different companies, I think, and spun Ticketmaster by itself.

So Ticketmaster was then spun by itself when we were just leaving, I think, the same time period. Now, you're 33% owned by John Malone's group, Liberty. Yes. And they have you classified under SiriusXM or XM Sirius? OK. So we inherited them through IAC, right? They were 15% shareholders in IAC. We inherited John at the time, was on our board. And then they bought up from 15% to the maximumAC. We inherited John at the time was on our board.

And then they bought up from 15 to the maximum they can own at 33. Okay. And I would imagine you have some great stories of things you've learned from people like Barry and John Malone over the years that have probably helped you become a better manager of a large business. You seem to have the entrepreneurial part down, but then the managing it is like a new challenge as you got bigger. Yeah, for sure. I think we've had, you know,

I think I've had a pretty authentic mission. So I've played long always in this business. I think most of my board, all the shareholders that have been around me have seen, you know, the way I've acted, the way I've bought shares, the way I've played long with my compensation. So I think we got that part figured. But yeah, Liberty has been a fabulous shareholder. They play long, as you know, they

came in at geez, eight bucks. I think I've been one of their greatest performers. They probably didn't really understand early on. But John and Greg and the team have been monumental in kind of helping us in those early days. Not so much advice, just having a stable shareholder that wasn't worried what the stock price was that day, but was looking for what was this business going to be over time. So it's been good. I mean, obviously, COVID was great to have them. Yes, I would imagine. We're going to go into the present day now, and then Mike's going to jump in,

and we're going to talk a little bit about the environment that we're in today. So we'll, I guess, let's just go through some of the superlatives from the last quarter. Wait, Josh, before we get to the most recent quarter, which was a blowout, as they say, can you talk about what COVID was like? There were groups of stocks, the stay-at-home stocks, the reopen, and you guys were in the epicenter of the latter,

which, and so it was every day you were just checking the list of stocks, this one versus that one, to see where COVID was going, right? And so, but during 2020, obviously, you guys are the most economically sensitive company. Revenue went from, I don't know, you guys looked to do like $1.5 to $3 billion a quarter, and it went down to $74 million. What was that moment in time like? Yeah, that was, when the music died, yeah, we got on the call with 40 global presidents who all got shut down that week. Unheard of, obviously, right? We were walking

into 19. We had already pre-sold what was going to be a record year. So we thought we were headed for, you know, the monster year. And then, boom, the music stops. Jumping on that call with those 40 presidents to talk about our running costs, all those obvious skills, but not something we focused on every day as we were building the company. I've used the line. I got on the phone with Malone, and he gave me the great line. He said, you know, whoever can hold their breath the longest is going to win. How long can you hold your breath? So we had to go through the, okay, well, I got this running cost. I'm

going to get it down. I got this much in the bank. I think the gift we got the first two months was just truly you were the captain on the Titanic in the sense of you had no idea when and how this was going to play out, whether it was two months, six months, or a year. But you had to get on those global employee calls and make everyone feel fairly confident that the things were going to be OK. Were you in disbelief when your people told you, hey, man, we've got to cancel a million shows? Yeah. You were, right? Day by day, you were. Because at first, it was, oh, it's just Europe or it's just asia i mean you know maybe just postpone it'll be the summer it'll

be two months it'll be three then it's slowly the market crashing you know and then you know the god the hype uh no one's ever going to go outside again uh you know there were some instagrams and artists doing some some video so now you know no one's ever going to go to a show. They're going to just watch their YouTube video and it's been replaced. So yeah, you lived in a couple months of, and at that point we had sold a couple billion in tickets. So I would say the, you know, the glitter of hope started to be, we had modeled that we thought 75% of people were going to refund their tickets. I mean, the world was, the consumers were hurting. The gift that we got by the first earnings, and I think why our stock then did the takeoff, was we were like, I think at that point, we were at like 6% refund rate.

94% of people were holding onto their tickets. So people wanted to see the show when it came back. They were willing to wait. They weren't asking you for the refund. Refund, yeah. That's amazing. You know, I had been selling in terms of my proposition had always been, and it took a while, is this experience economy?

I know that sounds cliche. But concerts, if you go do any survey right now, you're going to see that a customer is going to say going to a show is in the top three memorable experiences that they have is going to say going to a show is in the top three memorable experiences that they have to do. They go to two a year. And we all remember their Kodak moments. You know, when you took your kid or your wife or your girlfriend, whatever version you go to, your buddies to ACDC or your kid to Harry Styles, these are magic moments. They're not duplicatable. They've been around since caveman days, social gathering, all those kind of cliche things.

This actually was the greatest demonstration, right? Because now we're in a pandemic and people are saying, no matter what's going on, I gotta go see Billie Eilish when the show's back. I'm coming. I'm actually so excited about it because I wanna get out of the house. So that kind of pent up demand and that idea that in the middle of a crisis, you may be out of work or you may be cut back.

You're going through a lot and you're not calling 1-800 for the refund. That ticket is important to you as a kind of a beacon of hope when you get through this. That was that. And that May long weekend, I always say, was the difference too. Remember in the pandemic, there was a May long weekend and CNN was reporting like all these kids partying on lakes and they all came together. And it was kind of that, no matter how dire it was, this idea of the social gather is just innate in us. We're going to come together.

So yeah, that was kind of the pivot. Once we got through the storm and we modeled the idea of 75% of that $2 billion going back out, now we're sitting on 94% of that $2 billion. So we didn't have the cash crunch we thought we might have. We were able to retain. So Michael, if everybody had called back their cash and said, you know what? I don't care about the show. I need the money right now. It would have been a very different situation. Well, it would have been the how long could you hold your breath wouldn't have been the, hey, we can take our running down of this and we can hold our breath for a few.

You know, I gave the we could, you know, worst case, John, we got we could sit here for three years if we have to with all of our capacity, our bank. Now, if you didn't have that, if you had the refunds, then it might, you know, it would have been a shorter time period for sure. I think that separated you from other reopen. I'm sure you don't love being called a reopen play, but I think that separated you from, for example, the airlines, not as simple to just cease operations, especially when you consider the equipment costs and all the loans tied to that. So I think you guys probably had more in common with, let's say, theme parks. It's not pleasant

furloughing workers and putting everything on ice, but it's also not quite as costly as it might have been if you had these other expenses. Yeah, we had, you know, we got basically most available, right? So we went from, you know, 200 plus a month in cost to you can get down to 100 overnight. And, you know, what we learned in 40 countries, you know, 39 of those countries have pretty good systems in place already in terms of unemployment insurance and universal health care and etc so it wasn't as painful to some countries to to uh to have to deal with the the uh this temporary layoffs but you're right we were variable so we were able to ramp down sit tight and then ramp up as the volume came back now not now not only did people hold on to their tickets for the eventual uh return of concerts the

advertisers didn't move either. The sponsors, they wanted to honor their – they wanted to be there for – I guess they have a certain dollar amount. They chose to allot it to live music. They understand the power of people associating their favorite artists with a brand and the power of live activation. And they didn't pull either. It seems as though that just was able to roll into the following year.

And that worked out probably better than you might've guessed if you didn't know. Yeah, we would have, you know, similar story. We, you know, I would back up though, because I have done both been the promoter and I wrote the check to the NFL on my Labatt days. When we built Live Nation, we always said that we had to turn the pyramid upside down.

And the president of sponsorship advertising is as important as my president of talent. The old model was always the pyramid, right? The talent guys at the top and everything is kind of subpar after that. So I would say that our division and sponsorship are 600 people that work there. We have worked long to kind of be the NFL of music.

That was always our kind of our protocol here. So one, we have great deep relationships. They're long, they're solving problems for our customers. But you're right, like everything, who knew in March, if all of them were going to say, listen, we're going to break our contract, we're going to pause, overwhelming support all across the industry. They all wanted to hold that pole position of whatever category they had. Okay. And so in, in, in March, in March,

excuse me, 2020 during their pandemic, Scott got killed, felt like 60% or so. And then just a year later, you guys were at all-time highs ahead of where you were in 2019. And I remember saying to Josh, or maybe myself when Josh bought the stock, I don't understand how Life Nation is doing so well. Are you telling me that the business is better positioned today than they were pre-pandemic? And the market is usually right, and it was right in this case, because in your most recent earnings report, you guys said that you continue to build your flywheel over 70 million tickets now sold for shows in 2022, which is up 36% compared to this point in 2019. So two part question. What is it like when you see that you guys are just absolutely demolishing, right? Like you're firing on all cylinders,

the business cannot be doing better than it is right now. And you've got the stock sell off, whatever, 3%, 4% the next day, because now we're in a much different market environment where maybe the market is looking past what you did or what you're doing and onto what's going to happen to the overall macro economy in the next 12 months where you guys can maybe continue to demolish, but you're not going to get the benefit of it just given where we are in the cycle. continue to demolish, but you're not going to get the benefit of it just given where we are in the cycle. Yeah. I mean, I've been at this 15 years. I've been $2 and $20 and I've lived the up and down. So I'm just thankful that we got a strong cashflow business at the core. I'm okay with some of the overall pullback right now. Maybe things were a little too hot. Maybe all of these companies that 10, 15 years later still can't make a return need to get a little slapped, right? So everything was running a little hot, overvalued. We ran this company the old-fashioned way when we went public. People cared about what was the profit, what was the EBITDA, what's your return on. So to be sitting here where we are right now, we think we're going to have a record 22.

We've said that out loud. We think we're going to have a record 23. We think our both top line and bottom line will be record numbers. I think we're going to be able to continue to expand and bolt on and build our business. So I don't know. Does the market, when the market turns around, I'll, I know when it turns around, we will have two, three more years behind us of continued strong growth. Like we've been doing for the last 10. Historically, we've been talking about,

oh, I'm sorry. Historically, how sensitive have, has the concert business been to, I know we haven't seen a lot of inflation last 20 years, but maybe to a retrenching consumer, given that people buy these tickets far out in advance, is it that economically sensitive? Or I guess it's on a spectrum. But what do you think about that? Right. You know, historically, over 30 years, this has been fairly recession-proof, as they say.

This has been fairly recession-proof, as they say. 2010, let's call it the worst time for the industry. Ticket sales were down 10%. And then the year after, it was a record year from the year before. So it's not really had a big effect. Now, I'd say a few factors to think about. One is we still are dramatically underpriced. And that's part of why we think we have a great growth story. There's a $12 billion secondary business that exists. That means that that's ultimately,

at least three of that is music that we'd love to bring back into the middle for the artist and us. Right. So that means we're absolutely, we're about the only product out there that is worth more the second it's sold. Generally in business, you just actually price to the market, but we're about the only product out there that is worth more the second it's sold. Generally in business, you just actually price to the market. But we're dealing with the artist brand and what makes sense. But every year, year after year, you've been seeing us slowly chip away and convince the artist to charge a bit more for the front row, charge a little less for the back row, drive some of that. So we still think great opportunity in pricing. drive some of that. So we still think great opportunity in pricing. Secondary, having a record quarter would just say to you, then there's still big appetite for the ticket. So we think there's pricing at the top end that's still unrealized. That doesn't seem to be any

pullback at all. We just went on sale on the last weekend, Kendrick Lamar's tour, global tour, demand stronger than ever. So we're seeing stuff that's just going on. Then two is, you know, people think and they write about the big headline prices. This is compared to sports. It's a $35 ticket. This is nothing compared to going to an NBA game, an NHL or NFL. This is a very affordable opportunity. So what we've typically seen in a recession or a pullback is you might not go to Disneyland, you might not buy the dishwasher, but you're going to

go to Keith Urban at the amphitheater, you and three friends. It's still a really affordable but high-value escape if you can't go and do something more expensive. You've got to live your life somehow, and your favorite artist coming to town, not Madison Square Garden, but like a nationwide tour, it's probably affordable to see a show or two just like it was the prior year. Yeah.

Cheaper than going for dinner. You know, $35 ticket. You're not getting a fancy bottle of wine and a dinner anywhere. So we still think it's a truly, totally accessible to all levels. and a dinner anywhere. So we still think it's a truly, totally accessible to all levels. We think the price of the top end is important because the more we price from the front, the more we reduce the back end, right? We have never sold a ticket or a show where we sold the back out and not the

front. That's not how it works. You're always, you're always selling the front, but you it's the back that you've got to work on. And it's usually maybe it should be 39 instead of 59 for the back row. Can we talk about that? In your remarks from the last conference call, you said the industry continues to embrace market-based pricing, particularly on the best tickets, shifting 500 million to artists for shows this year,

resulting from a double-digit increase in ticket pricing and reducing the price arbitrage in the secondary market. What exactly do you mean by that? And why is that an opportunity for Live Nation? Well, again, we're just sitting with these artists. And we can look at all the data historically. You're talking about going on tour. You're presenting all the pricing options to the artist.

And this is an industry that's been fairly unsophisticated historically. An artist said, I'm going to go on tour. I'm going to play 60 dates. And they said, listen, it's going to be 129, 79, and 39, three scalings. Doesn't matter if it's New York or Pittsburgh, Monday or Friday. That doesn't make a ton of sense. Right. So we've been slow as an industry to get to that kind of airline hotel model where everything's dynamic. Nobody paid the same price besides you. And it's all about at midnight or at nine o'clock, you want every ticket sold regardless of the price. Now historically, there used to be pushback. Artists would be, I don't want to change the price once I've announced it. I want one pricing. They've all become more sophisticated.

They all see the secondary market more than anything. Helps that kind of sunlight on the secondary market. And they see these tickets trading for $400, $1,000. It's a little easier to them to say, listen, on a Friday night in New York, it's not $110. It's $210. And we can change. And we can change. But Pittsburgh on a Wednesday might be $98. So we ran all these. We built a bunch of Pricemaster models. So we can run a model for an artist now. We can show them 50 different scalings up to five. And our point is always, if you can take that artist from three scalings to four, five, six, you start to expand your gross and you start to tap into the top end, as well as the bottom end in terms of sell through. So every year, artists are more

sophisticated. They want to look at all the gross opportunities. They want to play with that model on what's an end seat worth versus a middle. And we could now say, when you take an artist's first plan, help them model it up and get some of that secondary. That's where that $500 million, if you just stayed in the old model, it's all going to go out the door on the secondary versus coming in. Every artist wants to play to a full room. It's hard to envision an artist who doesn't. So if flexibility in pricing will put more asses in the seats in a part of the arena that they might not necessarily normally sell out, it's got to be a win-win, right?

And they also want to sell to you, Josh, right? Like, they don't want to sell to a middleman um if josh if josh is a super fan that wants to buy a platinum ticket for 300 bucks then let's sell josh that ticket don't sell it for a hundred and have a middleman sell it so you know they're they they understand that now and and they see the marketplace and they listen i always say artists are genius ceos in general they are the smartest brand managers alive. So it's not maximize every dollar. There's a fine line on what does the brand stand for?

How do they want to present that? And you can accomplish more of those goals now of still stand for good value, let your average fan buy a ticket, but be smarter on overall scaling. And we have kind of, I'd say, second inning out of nine. That's why when we talk about this, so much more pricing opportunity over time that can walk with the brand. One way that you could maybe do some variable pricing and additional benefits for consumers are with NFTs.

And I want to ask you about this because I've been going to Madison Square Garden my entire life to watch the Knicks, unfortunately. And I know that I saw the Kobe game when he scored 62, and I saw Jordan on the Wizards score a couple of game-winning shots. But I don't really remember when I was eight years old which games I saw. And so to be able to have a digital scrapbook of all the venues that you go to, I think would be pretty cool. So I'd be curious to know if you guys have thought about that at all. Yeah, I think the concert timeline

would be a smart idea. We would definitely be, you know, we're like everyone else. We've been, you know, watching the space. We manage a lot of artists. So some of the artists have dabbled more at direct NFT drops. And as an overall ticket master, we've been working hard with the NFL, NBA.

We did all the NFT tickets for the Super Bowl and given them all digital tickets. Live Nation, we've been doing digital kind of collector tickets. So at least you have something of a visual digital art versus an email. I think with that stuff, as long as people don't feel like they're buying something that definitely has value on the secondary market. What Michael is describing to me is not the traditional NFT – traditional. It's not the typical NFT in the art world where somebody says, hey, I love this. I would keep it. But if somebody offered me 10x the money because the artist becomes famous, I would also sell it.

Nobody wants, probably nobody wants to buy his ticket stub from a Kobe game from a long time ago because they didn't experience it. It doesn't have the same meaning to them that it has to him. So is it like separating out what is an NFT versus what is just like a digital collectible? Well, a digital scrapbook. You know, people use stuff like scrapbooks. Like to be able to track your trajectory of, okay, my first concert in 1994,

I saw Meatloaf. It was the bad out of hell one. And then to be able to, like, I don't remember what my second concert was or my third, but I remember my first. Right. Yeah, I would say, I think you're, you know, Josh, what you're saying is what what we look at, there's NFT,

the technology, and then there's the NFT, the product, right? Yeah. The top shots and others. We've avoided any of the buy it and it could be worth something momentary kind of yard sale we saw go on. We watched all that. Smart. And we wanted it to settle down. We think blockchain and NFT is a great technology that you can use for products like a timeline, a scrapbook, just because they're digital captured in a manifest. But we in the music business in general, you really haven't seen anyone succeed at anything that didn't look like a one-time grab. So we're we're kind of cautiously watching it we like the technology for other reasons but we're not we're not looking to do anything in terms of consumer tradables that we think has any longevity we certainly haven't unlocked that yet i think i think it'll probably develop into more of like an

artist fan club almost like an id card i'm in the i'm in the club i get a discount for the next show yeah what about community what about like digital concerts if people can't go physically to the venue but they want to be able to hold on so i wanted to i wanted to pitch you an idea and if if you guys run with it i i just want a shout out for it i i just i look at all of the i look at all of the streaming services and streaming apps, and all of them have some live concerts. They have some live comedy, let's say. Like whatever. They all have that component.

But nobody's like the MTV of the streaming era. But you guys arguably are the best positioned that exists to say, you know what? For music lovers, let's say it's 10% of the population who would just have live music playing all day on their TV and they just love it or that's what they want to watch on their phone as opposed to a scripted drama or whatever. Why not have the standalone app that's on-demand live music all the time from all your artists, all your venues? There could be a channel where you can watch a whole concert or there could be a channel where you just watch 20 different artists do their biggest hit back to back to back, kind of like the old MTV. Are you guys thinking about positioning yourselves that way? Is it a big enough category to have its own streaming app? Have you thought about pricing?

I'm impatient. Why aren't we there yet? Yeah, no, it's a great point. We have done many versions of the LNTV and the ESPN and live and wanted to do all of that. When you just look at our inventory and say they have 30,000 shows, that's 110 shows a day somewhere in the world. Why aren't we streaming those? Then you get into a couple realities.

One is the minute the live is easy, the minute it's recorded, it's tougher because then you get into label rights. So you'll see live streaming a festival isn't perceived or recorded right. If you delay it 10 minutes, it's recorded, and then you get into labels and what's that going to cost you to clear and all that. So you've got added costs.

That's why you see us do lots of our festivals are all streamed live. We just did a deal with Hulu where we're going to put all of our shows on all the festivals on Hulu live stream. But to your bigger point, so we've tried over the time on the LNTV idea, a few things come into it. One, you got rights problems. Okay. Two, even in the peak of HBO and the big show, people don't want to really watch two hours of anything, even your favorite artist. So it sounds romantic, but no one's watching live anything. Then you have the two problems over here.

YouTube does it better than anybody. So we were going to, I launched a program with Apple back in the day called Bootleg because Instant Live. I believed that we could institutionalize bootlegging. And we ended up shutting it down with Apple. It was one of their only partnerships they had ever done historically. And we sat there and said, YouTube has done a better job than all of us. Because every night there's someone, right now you can go on and find out who played last night in Nashville. And there's 17 camera views from some fans doing that. So YouTube is giving that solution.

You really probably only want to watch Drake's one song you like. So you're going to go to YouTube. Michael celebrates the whole Drake catalog. But yes, I'd be good with one or two songs and then go on with my life. If I'm not at the thing. All right, so that's really what it is. Being at the thing is better.

Yeah, and the ones that matter like anything, Beyonce, Drake's, the big ones that can maybe drive your Sopranos kind of hits, well, they're all doing what they got to do with their brands and they're monetizing them and doing their own direct relationship. So now we look at festival TV a little bit different. We can put all of our festivals somewhere because it's kind of lean back music,

and you might put Lollapalooza or Coachella on YouTube in the background. So that's a little different. But we haven't been able to unlock really. Cuban tried it with AXS TV. We met with him earlier in life about that version. Could it be a dedicated channel? But you couldn't get enough superstar power to power it. And no one was watching two hours of the show.

And now, especially with TikTok and YouTube and small consumption bites. 30 seconds. You're just like an old product. Gotcha. Now, I do say all that. I've spent a fortune from YouTube. or we've invested, Vice TV, Yahoo. I mean, I've tried every angle of this. I do feel good about when I keep reminding people there's a reason that it can't be duplicated.

We will, you know, those two hours that you go see it are very magical. The very small super fan that wants to watch two hours of anybody. Right. magical the very small super fan that wants to watch two hours of anybody right so you right so focusing on that live event really is at the core of what live nation is so maybe that is the better approach after all forget I had that idea the worst idea I've ever heard yeah hey Michael we're not gonna keep you much longer wanted to get to one more question for you um so you guys now have lapped 2019 we're no longer talking about post-pandemic live nation you're a bigger business uh than you were prior and i think in many ways that's just a great uh symbolic victory for america and for humanity i guess uh that we're all back i went to the first live show back at MSG,

which was Foo Fighters. So that was last summer, I think, already at this point. Oh, when Chappelle came out. Yeah. So just like having been there in the room and looking at everybody without masks on for the first time, and at that point, I think it was 18 months. It was right after the vaccinations went.

So that was just, to me, very obvious why I'm a shareholder in Live Nation. What would you tell other shareholders or other people who are looking at the stock why you think it's the right investment for the next five or 10 years, the long game, as you phrased it? What gets you excited about what's coming up? I'd start with, if you go supply-demand, no matter what you read, the artist needs to go on the road. The road is where he's going to make most of their money or she but it's also you know curse rock had this great line when i was talking to him recently you know the road is where you make

your fan base right so there's a lot of a lot of digital streaming and you can be a one-hit wonder and you can have great streams but if you can sell out that arena when you go and do those hundred dates from you know from cape town to mil, that's where you build fans, long-enduring fans. And artists know that. They know the difference between the artist that can fill venues and the artist that can stream a song. And if you can fill venues, then you're going to have a long career, and that machine's going to work for you in many ways. So every artist knows that there's the got to make great art, but that art can connect. And then it's ultimately, you got to go build a fan base. And if you build a fan base,

Rolling Stones and Drake's and all that I've showed you, then you'll have a long global career. So one, the artist has to pull, this is a long-term supply. Artists need to get on the road. But I think the part that gets overlooked, it's a global demand business. So I say that, and this was a business that for 50 years was a US, Western Europe business. That's all you toured. You didn't tour anywhere else because there wasn't a legitimate system. The reason you didn't tour is record labels didn't work in those markets, where they were called the illegal markets. So that artist was popular in Germany and France and Italy and Canada because MTV, record label, Tower Records, the machine radio was built. And then we could sell tickets there. Again, my globalization,

but the minute the internet unlocked this, the game changed. Now that 19-year-old in Columbia, Cape Town, knows that Tyler dropped an album last night and is a fan. There's no gatekeepers telling them about that. So we look at this incredible global opportunity. As big as we look like we are, we're still only 30% of the global market share. And outside of America, we just started in Latin America with our Ossessa and Rock and Rio, but huge business there. We have minimum market share. Asia, we have minimum market share. Eastern Europe, growing. We think Africa has some great potential. Talking a lot about that. We just did our first Middle East tour with Maroon 5. Sold out everything instantly.

first Middle East tour with Maroon 5. Sold out everything instantly. So it's a global business. And we're kind of like any global platform. We have a great advantage on a global basis. But we think the industry grows. Most of the growth for the next 10 years will come international. Those markets are new, right? They're slowly, they're getting their first arena in San Paulo. We just recently announced we're going to build an arena there. These are markets. There's 100 cities that all want to be New York. They all want Drake, Taylor Swift, and Rolling Stones to play there.

So we look at this as a global growth business that's going to grow organically, we think, on a 10% basis a year. We think we can grow into that market share on a global basis. And we think that the artist is going to be strong in terms of the supply chain. So you put those two together, the market leader like us is probably going to ride that wave on a global basis for our continued double-digit growth. From the artist's perspective, of course they want to see their fans in all these places. But it may not be until a company of your stature hey live nation is the promoter and live nation's involved with the venue and they can trust that it's going to be done right and you guys have built that that uh i guess you guys

have built that reputation to the point where you can really open this up to the whole world and have the artists and fans follow? Oh, yeah. You look at it. I mean, every artist has the same aspiration. I mean, they're not—that's the wrong way to say it, but Pittsburgh's nice, but they're all, how do we play Sao Paulo? How do we play Rock in Rio in Brazil?

How do we get to—they've got the same globe we all do, and they know it's a foreign— when you're a brand now, and they're all the same Rihannas, they're all creators, right? They're all direct-to-consumer brands. And they all have these incredible audiences wherever that TikTok, Instagram, 30, 40, 200 million followers. So they're instantly their own studio. But they can see it. We can see it from our artists. You look at their fan base, and if you were their manager, you'd go, well, you have a hundred million followers and 32 million are an American.

The 66% is outside of America. Yeah. You're going to sit there and go, well, we got to go travel. We're huge in Asia. We got to go do an Asian tour. We got to do a Latin America. The data's there now to see these artists, why they're so global. And they all know that if they're going to launch a brand and they want to be and launch a product eventually, they're going to have a global business and they're going

to go be part of selling on a global basis. They've all understood now this is a global business. They've got a global fan base. They've got to have global hits. They've got to go global tour. And they're going to have global product extensions from that. One of the gifts, as I said, when I moved to Europe that I figured out early was, yes, let's grow the American business, but let's run fast and have a global platform because the artist is coming. So the reason I went hard on 100 offices in 40 countries was to get there. I wanted to build this global platform. So when we sat with this artist and said, and it happens every day now,

that young artist I just met with downstairs and the manager, they look at us and go, we want to do 100 dates. Where do we go in the world? They now know it. It's not America only. It's a, where do we go? And we give them the, we have a global office.

We can give a global offer. We can, when you land in Milan, when you land in Cape Town, we have a local office, local advertising, production, lighting. We can help you, guarantee. Town, we have a local office, local advertising, production, lighting, we can help you, guarantee. So our kind of a local business from an execution, but a global kind of efficiency from a tour buy is kind of our secret sauce. Well, I'm really happy as somebody who owns a stock, as a long-term investor, to be along

for that ride. And I wanted to say thank you on behalf of all of the other shareholders for getting us through the pandemic period. And you guys are stronger than ever. And I'm really excited about all the things that you're talking about. And mostly, I wanted to say thank you for joining Michael and I on The Compound, being part of the show tonight, and being so generous with your time. We really appreciate it.

Thank you, guys. I appreciate your support. Anytime. Awesome. And I'll see you at a live show sometime. Yes, please let me know. All right, Michael. Thanks again.

And thanks to all of you guys for coming through for the live and for all of your witty comments and questions and a lot of great stuff in the chat. We appreciate you guys. And make sure you treat yourself to a show sometime this summer. Go see somebody. Please. It's a great experience and you should never take it for granted again. Alright, we're out. Thanks, guys. Outro Music