Operator: Good afternoon. My name is John and I'll be your conference operator today. At this time, I would like to welcome everyone to Live Nation's Third Quarter 2024 Earnings Call. I would now like to turn the call over to Ms. Yong. Thank you, Ms. Yong. You may begin your conference.

Amy Yong: Good afternoon and welcome to the Live Nation third quarter 2024 earnings conference call. Joining us today is our President and CEO, Michael Rapino; and our President and CFO, Joe Berchtold. We would like to remind you that this afternoon's call will contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company's anticipated financial performance, business prospects, new developments, and similar matters. Please refer to Live Nation's SEC filings, including the risk factors and cautionary statements included in the company's most recent filings on Forms 10-K, 10-Q, 8-K for a description of risks and uncertainties that could impact the actual results. Live Nation will also refer to some non-GAAP measures on this call. In accordance with the SEC Regulation G, Live Nation has provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in our earnings release. The release reconciliation can be found under the Financial Information section on Live Nation's website. With that I'll turn it over to Joe for brief remarks.

Joe Berchtold: Thank you, everyone, for joining our quarterly conference call. I think we'll go right into questions on the release. And as everybody knows, we have our investor presentation coming up Wednesday and then again on Thursday.

Operator: Thank you. At this time, we will be conducting the question-and-answer session. [Operator Instructions] One moment while we poll for questions. And the first question comes from the line of Brandon Ross with LightShed Partners. Please proceed with your question.

Brandon Ross: Hi. Thanks for the questions. First, you gave a lot of very positive forward-looking indicators in the release. I was hoping you could help us think about how that's eventually going to flow through the P&L. And I guess on the Ticketmaster side, it's been a tough year. Assume that outlook on stadiums is going to reverse that trend, but how will that look over Q4, Q1 and next year from a timing perspective? And then on Concerts, it was a big margin year. Can that continue next year in addition to the obvious topline growth that the indicators are showing?

Joe Berchtold: Thanks, Brandon. This is Joe. I'll start and then Michael can add. Starting with Ticketmaster and starting with Q4, as we noted for October first quarter of the month, Ticketmaster sales were up 15% year-on-year. Concerts, they're up 23%. So, we're expecting that great stadium and arena pipeline to start to manifest itself in Q4 and deliver a very strong Q4 in Ticketmaster. Next week alone we have over 200 stadium and arena shows going on sale. So, we're, I think in a period of unprecedented level of activity for Ticketmaster in Q4. And then that will continue into Q1 and through next year. We expect next year's Ticketmaster to look more like a '23 where you've got that great volume of stadium activity that you get with the on sale, but then you also get as it plays off and some of the deferred events that you have in Europe that you recognize as the events play off. So, a strong Q4, strong next year for Ticketmaster. Concerts, obviously, next year, expectations strong for a continued AOI growth, having growth in arenas and amphitheaters from our baseline of this year. Added to that, the more like '23 or beyond in stadiums should be very strong revenue growth, very strong AOI growth. I think it's probably a bit early to know the exact mix of all those venues for margins, but overall, both strong revenue and AOI growth for the Concert business.

Brandon Ross: Okay. And a lot of investors think that Trump is going to be a very good thing for you. I'm sure you've studied it very closely. Just wanted to hear what your thoughts on, are on how he's going to approach antitrust and the associated remedies. Do you think they will favor structural or behavioral? And then separately, from a timing perspective, when do you think you'll next have an opportunity to get to the table with the DOJ? Thanks.

Joe Berchtold: Thanks. Yes, I think, it's still very early in the transition process. So, we're hesitant to say too much, but absolutely, we are hopeful that we'll see a return to the more traditional antitrust approach where the agencies have generally tried to find ways to solve problems they see with targeted remedies that minimize government intervention in the marketplace. And without getting into the specifics, at least some parts of the case, we think believe reflect a much more interventionist philosophy today than you'd expect of a Republican administration. Obviously, the request to break up Live Nation and Ticketmaster would be an example of that highly interventionist approach. So, we'll obviously be ready to engage as soon as they are. They need to get through the appointments and get things settled on their end, but we'd certainly be hopeful that we could start engaging with them early in next year.

Brandon Ross: Thank you.

Operator: And the next question comes from the line of David Karnovsky with JPMorgan. Please proceed with your question.

David Karnovsky: Hi. Thank you. Just two from me. First, on the revision to 2023 financials. Can you walk through what triggered that and what the notable changes are? And I didn't see it in the release, but you have an updated '23 AOI and free cash flow. And then second, you called out for Q4 a possible mid-teens FX impact to NOI due to LatAm. Can you just refresh us on the general mix of LatAm versus other regions in the fourth quarter? And then any early view on how to think about FX into '25? Thanks.

Joe Berchtold: Sure. So, first on the revisions to the financials. So, for context, what we had is we had a non-cash non-operating tax adjustment that we had to make. This has to do with when we purchased Ocessa and a difference between statutory and US GAAP accounting on some non-consolidated investments. So, it was just on the US side. We missed -- we paid the taxes in Mexico. We missed it in the US. It was not material to our '20 or '23 numbers, but working through with the auditors, we made the decision, it made sense to restate those numbers. So, again, a one-time non-cash non-material to those numbers. In terms of the FX impact, we had previously talked about Q4 this year looking strong in Latin America, which it still does. All the operating metrics we've been talking about in terms of both the supply and the demand profile are looking good. We've also just seen a downturn in the FX on Latin American markets over the past several weeks. And because we had a disproportionate amount of growth in the numbers coming from those markets this fourth quarter, we just wanted to flag that, therefore that has a disproportionate impact on our AOI and NOI for the quarter. We don't look at it as being material when you step back and you look at the full year '25 and the magnitude of activity that we're going to have. It's more just a Q4 modeling point for people to be aware of and we'll see how some of the FX plays out over time and we'll update you. But I don't think it's a material '25 issue at this point. It's really just more a '24, which tends to be our lowest activity. So, when you have your lowest activity quarter and you have where your growth is coming from get impacted by FX, so that can just start to swing things around.

David Karnovsky: Thank you.

Operator: And the next question comes from the line of Stephen Laszczyk with Goldman Sachs. Please proceed with your question.

Stephen Laszczyk: Hi. Great. Thanks for taking the questions. Two, if I could. Maybe first for Michael, you called out in Sponsorship the number of strategic partners increasing by 20% this year. I'm curious, looking out to '25, how you would encourage us to think about the Sponsorship business next year. Are there any verticals of the business where you see maybe outsized opportunities for execution where you could replicate this performance? And then second for Joe, on the Concert segment AOI in 4Q, you called out some of the on-sales coming in over the next couple of weeks here. I'd be curious if you could help us think about how much marketing spend could be associated with those on-sales and maybe any color on just how to think about 4Q Concert segment AOI. Thank you.

Michael Rapino: Thank you, Stephen. On the Concert, on the Sponsorship side, again, we'll be giving more guidance this week as we get to our Investor Day. But Sponsorship has continually been our star for the last decade or so, multiple years of double-digit growth. We look at this business still very, very strong, very different than maybe some of the advertising challenges other companies have. We see overall companies spending more money on-site experiential and moving dollars into that segment. And anytime that happens, that's good for our business. We tend to rise with that. So, we look at '25 and onward as continual AOI growth that we've been able to deliver in the past in Sponsorship. One of the foundational drivers of that is our globalization. And every time we do more shows around the world, we provide ourselves more opportunity and more sponsors. So, when you're doing all these Latin American shows, when you're doing shows now in India, Middle East, Singapore, Asia, growing our Australian business, it just provides us more and more inventory to open new borders and new relationships. So, as our global pipe continues to grow, so will our Sponsorship and we'll see continued growth.

Joe Berchtold: And Stephen, as it relates to Concert in Q4, obviously, Q4 in Concerts is a peculiar beast because in some regards, right, the more we're ramping up for a great next year, the more that impacts our AOI. So, I think, as we're standing here, we'd expect a double-digit increase in our advertising expenditure that we have to write off at the end of the year. We're certainly ramping up activity and personnel to be prepared to handle the tremendous volume of shows that we're doing next year. But I think even with all that, as we're looking at the numbers now as again as the broad context, we do expect our margins for the full year in the Concert business to land around where they were in 2019. I'm not going to worry three or four months from now, plus or minus 10, 15 basis points, but I think that in total, we expect it to come in around where we were in 2019.

Stephen Laszczyk: Great. Thank you both.

Operator: And the next question comes from the line of Cameron Mansson-Perrone from Morgan Stanley. Please proceed with your question.

Cameron Mansson-Perrone: Thank you. On the CapEx increase, I was wondering if you could provide some color on what the pipeline right now looks like for new venue opportunities. And then for the new AMP project, anything further on what changed to pull that forward? I'm assuming that was already in the pipeline as of July, and it's more of just a timing consideration, but any color there? And then to follow up on the Sponsorship question, Michael, growing the number of partners that are generating over 100, sorry, 1 million. Can you talk about, is that new sponsors or is it expanding current or existing relationships? And maybe what's allowing you to execute, if it's growing those relationships, what's allowing you to execute so well there? Thanks.

Michael Rapino: Quickly on Sponsorship, see, for a few years, we've been saying anytime you can take that regional relationship or that started that relationship at a large brand, form that relationship, deliver for them, we tend to do good at then getting the next time around with the CMO talking broader programs. So, we continue to grow our current base of sponsors. We tend to have a very good renewal rate and we tend to be able to upgrade you once we've gotten you into the ecosystem and understand your brand needs. So, most of it is coming from current customer base of our 900 to 1,000 sponsors and growing our current base with them and then obviously expanding outside markets. On real estate, Joe will give you the updates. We continue to have a great pipeline. We'll take you more of details for you this week in terms of what venues are going to be kind of rolling out into '25 onward and the CapEx returns on that.

Joe Berchtold: Yes. And on the specifics of the CapEx here for the quarter, as you know, we often build buildings in partnership with others. So, this is a situation where we have a partner we've been talking to for an extended period about doing an amphitheater together. That partner had already put a fair bit of capital into the ground and it was only recently that we then signed the formal agreement. By signing the formal agreement, which would give us controlling interest in the amphitheater, we then need to move all the CapEx onto our books. So, you saw the increase of $50 million of expected CapEx for the year, but you also saw a $30 million increase in the capital coming from other parties. So, most of the capital on this project is what a partner has already put into it. So, the net cash that we're putting out is somewhat less than that. In terms of the new venues, as we noted in the release, we expect to bring 14 more venues online, either with substantial refurbishment or new-build over the next year and change through the end of '25 accounting for about 8 million incremental fans. As Michael noted, we will get into more detail on sort of the mid-range planning on venues over the next couple of days.

Cameron Mansson-Perrone: Got it. That's all helpful. Thanks, guys.

Operator: And the next question comes from the line of Peter Henderson with Bank of America. Please proceed with your question.

Peter Henderson: Can you provide some color on what initiatives are resonating most with fans and driving up the per-caps? And where do you think per-caps can go over time? And then just related to that, I mean, how much opportunity remains to implement tiered experiences and where are you monetizing on super or premium fans the most versus regular or casual fans? Thanks.

Michael Rapino: Well, I'll give a quick shot again. We'll get into more detail this week because those are pretty strategic broad questions. On the premium fan or super fan, I know I hear other companies talk about it. We've been selling to the super fan for quite a while, we call that the premium fans that launched a VIP experience at the show. So, that's kind of been an ongoing skill-set we've had forever. Our job every year is, we see that pie still underserviced. We've used percentages in the past 2%, 4%, 6% of the show is premium. We think it can grow up to 20% and more. So, a lot of the refurbishments we're doing at venues is about taking regular seats and turning them into better experiences for premium experiences at night. So, we think premium experiences is a big underpin to our entire growth forward because it's using the same customer base, but we always sell out of the boxes, sell out of the premium inventory first, we never have a problem selling that. So, we think that is a big part of our CapEx and our refurbished as well as our new buildings. When we're building them, we're starting with this mandate that they must have a certain higher percentage of premium seats and lounges and experiences. So, those venues start with a much better return. First question, shoot again the first question.

Peter Henderson: Just what where do you think -- what initiatives are sort of resonating most with the fans and driving up per-caps? And where do you think per-caps can go over time?

Michael Rapino: Most of it is, I've said this before, sports, these new venues, the $1 billion arenas have done a fabulous job, the stadiums, the SoFi stadiums. They've all kind of -- we're all following the same playbook. We all probably started in a very traditional food and beverage offering, whether that was the old forum here in LA versus the new Intuit Dome, it's night and day and most of it is around having more POS, it's around having different high-end value offerings in the -- in your food and beverage bundle to both having mocktails, non-alcoholic options, higher-level food versus the traditional food. So, that's the ongoing path we see in our amphitheaters, our theaters, our arenas. We've been using this $2 per head growth over the last few years. We think that's something in the future we can continue on. So, it's all-around upgrading our current customer base, our apps. Our venues probably are the lower-end of good, great quality F&B from historic measures. So, every year, it's about upgrading that amount of POS offering, upgrading our selection, increasing our premium offering, and all of that combination, we think still has lots of runway left.

Peter Henderson: Thank you.

Operator: And the next question comes from the line of David Katz with Jefferies. Please proceed with your question.

David Katz: Hi, evening. Thanks for taking my questions. Number one, past week or so has brought quite a bit of change. I'm wondering if your thoughts have started to shift or philosophies started to shift around M&A given sort of the change over the past week? And then I have one quick follow-up please.

Michael Rapino: No, we haven't, nothing's really changed in the last couple of years, the way we've been moving around the world and building our business. We don't have any sizable M&A targets that we would do with or without where the regulation stands in America. We like kind of what we're doing. You see us at an arena in Austin, at an amphitheater in some white space or a 5,000 seat, and similar around the world. We're always kind of looking in these 100 cities that are out there that want great entertainment and whether it's an amphitheater or a festival or promoter we like bolting those on and we have a big pipe of those around the world. Nothing has changed over the last two years and I don't think anything changes going forward.

David Katz: Okay. Understood. And I just wanted to ask a more general question about the secondary ticketing market, which I recognize is a smaller part and in some sense a strategic portion of kind of what you do. But it seems as though every time we have something like a World Series and ticket prices get high, it just draws a tremendous amount of attention that sometimes is seems a bit misplaced toward you as the biggest. Are there any strategies or and maybe this is not the best forum to talk about them, but it's just something that comes to mind that we've written about a bit and I thought I would raise it and see if there's any answer that's appropriate here.

Joe Berchtold: Yes. I think it's, go ahead.

Michael Rapino: Much broader statement, but yes, we are always a little amused that sports is kind of a badge of honor how expensive those tickets go for, but music which is priced much lower than sports seems to get more of the emotional reaction. But America seems to be a market where secondary is free-to-run. We hope there's always been this hope between different legislators would get better regulation around secondary, hasn't really come to life yet around that minimum at least bots and spec selling and some of the other practices around secondary that we'd like to clean up. So, we hope over time seems to be more and more attention around the secondary market. So, we hope over time, better regulations get put in place to help the consumer.

David Katz: Got it.

Operator: And the final question comes from the line of Peter Supino with Wolfe Research. Please proceed with your question.

Peter Supino: Thanks. Hi, team. A question about Ticketmaster. With all the activism at the DOJ, a question that we've heard a lot in the last year has related to the defensibility of Ticketmaster's competitive position and one of the pillars of that is technology. And so I wondered if you could just comment on the investments that Ticketmaster is making in technology, whether it relates to bots or demand-generation or other initiatives that you think are the most important ways Ticketmaster is reinforcing and extending its competitive position technologically? Thanks.

Joe Berchtold: Sure. Yes. And Peter, as you know, we spend tens of millions of dollars in capital on Ticketmaster. I think first and foremost, we need to continue to innovate the products that we offer to, on the enterprise side to our venues, to promoters, others who use the platform. Past recent years, that's included a lot around pricing technology to help everybody understand the market value of the content they're delivering. It certainly also is on the marketing side, developing great marketing science capabilities to help people market their shows. Big investments over the past couple of years on continuing to enhance our ability to handle that high-demand on-sale. We think Ticketmaster is the best in the world and we've seen a number of on-sales recently where Ticketmaster has been able to deliver a much better experience and sell tickets at a volume that others have been unable to handle. And then obviously also just on the ticket itself, all the things that we've done around digital tickets and as you said, trying to stop bots. So, range of consumer-facing technologies as well. We expect that's ongoing, right, Ticketmaster is a technology company. So, we're going to continue to be developing products on both an enterprise and a marketplace basis.

Operator: And at this time there are no further questions. Now, I'd like to pass the call back over to the Live Nation management team for closing remarks.

Michael Rapino: Thank you, everybody, and look forward to talking more about our business this week.

Operator: And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.