Jim Carroll

Music, Life and everything else

Is Live Nation’s day of reckoning approaching?

The bigger they are, the harder they fall. As the music business story of the summer Stateside continues to be about cancelled shows and underperforming gigs, industry big cheeses Live Nation have found themselves experiencing a huge stock market siump. …

Fri, Jul 23, 2010, 09:58

   

The bigger they are, the harder they fall. As the music business story of the summer Stateside continues to be about cancelled shows and underperforming gigs, industry big cheeses Live Nation have found themselves experiencing a huge stock market siump.

Last week, the company lost $432 million of its market capitalisation as shares collapsed by over 20 per cent after a warning about weak ticket sales.

The dive was accelerated by a botched investor presentation. As the company attempted to blame the media and dismiss Pollstar data (while simultaneously citing stats from that company in another part of the presentation), investors got nervous. Live Nation boss Irving Azoff’s strop about “shortsighted” investors didn’t help the mood either. Cue a massive sell-off.

Live Nation’s day of reckoning has been on the cards for some time. The problem for the company is that their business model is flakey and the numbers have never added up.

The company has operated as a music business Pac-Man in recent years, gobbling up everything in sight including venues, promoters and Ticketmaster as well as moving into non-core areas like labels and artist management.

But the current slump in the music market means Live Nation’s revenue projections are off, while their core concert management business has consistently been in the red since 2005.

It’s worth noting that Live Nation’s exposure is not just confined to the US market. They’re a significant Euroepan player, controling a large chunk of the UK market via its partnership with MCD boss Denis Desmond’s Gaeity Investments.

In a recent interview with IQ magazine, Desmond confirmed that the plan is to recreate that partnership in Ireland.

“In England, we’ve got Live Nation/Gaeity which works great and the plan is to recreate that in Ireland. We are talking, we are nearly there.”

We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 10 days from the date of publication.