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Live Nation Entertainment Curbs Costs to Fight Coronavirus Woes

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Live Nation Entertainment, Inc. (LYV - Free Report) announced cost-containment measures in the wake of uncertain market conditions stemming from the coronavirus pandemic.

With the outbreak showing no signs of abatement, most companies across the world are undertaking measures to tackle the situation. The companies are not only stalling productions but are also focusing on cost-cutting actions.

To mitigate the financial impact of the COVID-19 pandemic, the company has taken certain actions to reduce its operating expenses. Moreover, salaries for senior executives have been reduced by up to 50%. Due to the crisis, the company's chief executive officer, Michael Rapino, has voluntarily agreed to forgo 100% of his salary for the duration of the salary reduction program.

Additional cost-reduction efforts like hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs as well as reduction in other discretionary spending have been initiated.

Moreover, the company has established an incremental revolving credit facility of $120 million, extending Live Nation's debt capacity to approximately $940 million.

Notably, president and CEO of Live Nation Entertainment, quoted, "With this additional liquidity, the flexibility in our debt covenants, and cost-cutting efforts, we believe that Live Nation has the financial strength to weather this difficult time. We will be ready to ramp back up quickly and once again connect audiences to artists at the concerts they are looking forward to."

Coronavirus Outbreak Hurts Live Entertainment Business

As of Mar 31, Live Nation has had eight thousand shows impacted by the coronavirus, with 15 million tickets sold. Of this, seven thousand shows with 14 million tickets sold were postponed, accounting for 90% of tickets impacted. The remaining 10% of tickets have been cancelled. 

However, refunds have been issued for tickets for all cancelled shows and the company expects to allow some refunds for postponed shows in the United States as well as select international markets as new event dates are set. In multiple international markets, including Germany, Italy and Belgium, vouchers have been put instead of cash refunds for rescheduled. 

Although, this deadly severe acute respiratory syndrome has claimed too many lives so far, the company shows enough resilience to fight the current calamity. We believe that it will continue to monitor the COVID-19 crisis as well as adjust its business contingency plans to emerge out of this situation.

So far this year, shares of the company have plunged 44.8% compared with the industry’s fall of 58.1%.

Zacks Rank & Stocks to Consider

Live Nation Entertainment currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few better-ranked stocks in the same industry are Camping World Holdings Inc. (CWH - Free Report) , Twin River Worldwide Holdings, Inc. and Lindblad Expeditions Holdings Inc. (LIND - Free Report) . Camping World and Twin River Worldwide each sport a Zacks Rank #1, while Lindblad Expeditions carries a Zacks Rank #2 (Buy). 

2020 earnings for Camping World, Twin River Worldwide and Lindblad Expeditions are expected to rise 197%, 6.1% and 85.7%, respectively.

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