Welcome, Welcome, Welcome back to the Bob Less Sets podcast. My guest today is the most powerful person in the music business, the CEO and president of Live Nation, Michael Rappino. Michael, good to have you on. Thank you, Bob Long. Also to appreciate the time. Okay, I know you're a voracious reader of business books. What are you reading right now? Oh that's a good question. Um, what's my latest? Um, I'm right now reading, but I'm actually, I won't want to say i'm reading. I'm I'm pretty deep into podcast now, so I'm I run every day and I'm podcast for my game. Um. And I have found this very smart Canadian guy, of course, uh Shane Parrish the Knowledge Project. I find him fascinating. He goes very deep all amongst a lot of different, uh kind of strains of life. So he's he's been my latest obsession and I've been going deep on him on YouTube and podcasts. What do you learn from him? He's a real thinker. So his whole his whole business is about The Knowledge Project is just a lot about how do you make decisions? How do you think about life? How do you how do you make the tough uh life decisions, business decisions. So he he kind of uses that framework amongst all the different candidates whoever they they're interviewed. So I like his real methodical thinking. Okay, there's been uh talk recently that the head of Google the lays decisions to the company's detriment. How do you make a decision? And how fast or slow do you make a decision? Uh? No, that's I think that's a really valid point I have. I've been all about the speed of decisions since my early days. I had a young as a young young executive, I had a great mentor who really drilled in that idea that you know, a seventy good fast decision moves the organization. Um so so so do it. So I'm a pretty good distiller. So I'm pretty obsessed with making fast, quick decisions with enough information, enough detail, um to keep things moving. So fully agree with you. That would be an ongoing pet peeve of mind. Make make make enough, make the decisions with enough information to keep things moving. We can fail fast. What's the worst decision you've made? Probably the same ones that I made too fast? Um listen, and Italian blood inside of me gets the emotion going. So I'm probably like everyone else. The decision I've made that was probably fueled on emotion and didn't spend a few extra hours or days um thinking that one through was probably the ones that have gotten me in trouble. So anything that was emotion driven and I didn't digest enough, uh, is the ones that got me in trouble over my days. And do you find you should trust your instincts or after you gather more infer information, do you ultimately make a different decision which is better? No? I think I don't live in a lot of regrets, so I I believe still in the end of the day, the speed of the decision process wins out long term. We now none of us hit you know, a hundred percent. So if you get seventy percent of those decisions right, but you're moving everyone forward. I mean my organization, the employees, you see it. They just want decisions good, bad, or and different. They want they want direction and decisions and they want decision makers. And most of the time that's uh, that's the part that that they look for. So jeez, over the last eighteen months, it was all about decisions. I didn't know which ones are going to be right, and wrong, but they wanted answers and we had to make decisions, and we got probably seventy percent of them. Right. Okay, let's talk about the last year and a half. What do we know March Live Nation the long with the stock market in general crashes, it ultimately rebounds, but then it goes through the roof. But there were no shows. Why does the stock go through the roof when there are no shows and no income? Right? The great question? Right? The uh, the the anticipation, you know, listen, I don't want to get into all the math, but I think the real reality was. You know, Live Nation has been public for fifteen years, so I'm gonna say for ten of those years we were eight dollars. People didn't quite understand us. Um, they didn't get the market. And I had been preaching experience economy for for many years and how important the live show was and that that we were this these social creatures and getting gathering for these two hours were magical. Um. And only the last three or four years did my start my stock start to respond as we kind of produced good results in the market. Went I get this thing called experience economy and live the live events very powerful so we were already on our way up, you know, seventies six or whatever before the crisis. So we had already got good investor credibility that we had delivered what we said we're going to deliver, and they started to really understand this thing called live. As you know, Bob, the market had talked about recorded music for fifty years, so we were always kind of the step child to the story. Only the last five years I think that the market go. You know, this thing called live at Live Nation is a is a real credible big business and it's is important to the artist, as is the record business. So we had already built up the credibility. You're right, Mark, the market crashes, everybody drops and we do no shows. So why does our stock go up? Well at that point, you know, a few interesting things happened. You know, when the when the crisis happened, there were people on the wall street and elsewhere that we're saying, oh my god, no one's gonna ever gather again. It's over. We're all going to be, you know, living in our houses forever. No one's going to go to a movie, theater or a concert. And yeah, I always remember it was the May long week end, and there was the CNN reports from late I think was the Ozak Lakes where everyone was partying like crazy and in the middle of this crisis with no vaccine, that that moment still showed that no matter how dangerous it was, people still wanted to gather, people wanted to get out. And so the market started to realize, Wow, this is really gonna be a pent up demand situation. When when we can gather, it's clear people want to gather, They're gonna run back, They're gonna want to come back. Two shows, um Disneyland, all the good things they do. When when when knife normal? So I started, so we started to see that. The second big news was when the crisis happened. We modeled out probably fifty to seventy percent refund rate. We assumed that the world was gonna want their tickets back, given the economy was about to take a hit again. Two months later, I got an earnings call and I tell the Wall Street that we've only had I think at that point was seven percent refund rates. This idea that you would sell all these tickets in the middle of a crisis, and people held onto that ticket. That was probably the most important fact that if you were an investor, you went, there must be something magical about a live show that while everyone is unemployed, sitting at home, worried about gathering there holding onto that Billie Eilish ticket, they're not gonna sell it. So this, this must be a magical moment in their lives. This must be important to them, Um and um. So you added that in that started to get investors realized. You remember Wall Streets buying the future, not the present. So you don't buy your stock today worried about what my company is gonna do this month, you buy it there. So if you're an investor looking at Live Nation, you probably said, wow, I think this live experience business in general is going to boom. We're seeing that happen. I think that the low refund rate definitely delivers that factual story. And then we did our own work. We went in and cut a lot of costs, and we were able to tell Wall Street that when we do come back, we've had the luxury of having some time off, we're gonna operate a bit more efficiently. We've We've said to the Wall Street will will you know We'll still do the same amount of shows but on a smaller cost basis. So if you're an investor and you're already valued me at seventy five dollars going into the crisis, you sat here and said, what do I think about the future. I think they're gonna be leaner than than they were before they went in, so they'll make a bit more money. I think there's a boom happening, and this thing called live must be really really valuable to customers because there's not even cashing it in in one of the greatest crisis is in history. I want to bet on this category, and I want to bet on the market leader, so that I think of anything. Sometimes the digital reality of everyone staying home had happened proved to a lot of investors how important that the social uh concert experience really is and how endearing it is to the customers. And we're seeing that playoff. What do you think the value of Live Nation is? Is her head room? Yeah, I've always believed that, you know, we're we're this incredible listen. I believe in Live for a long time. So I've been saying this, you know, for many many years. Um, I think recorded has its side of the world. But I think live is is very very unique. It's if you think about live music, it's the only unduplicate herble asset that's really survived this entertainment revolution. Everything else is pretty much got duplicated and digitized, UM and and and that's great. But two hours, Bob as you know those goose bumps you get when you watch the Eagles, um, you don't get that on an iPad. So we have this very unique industry that is non duplicatable um in in a in a world where everything else has become duplicate, herble and commoditized. I think this category has a long life. It's been you know, since the Caveman days. We've been dancing around music. I think my ten year old, my eight year old can't wait to go to a concert. And now they find them differently. They you know, the YouTube TikTok, all the different ways they're discovering it has changed. But they still want to go see post Malone um at a live show. They still want to see it. So I believe that the future of live is stronger than ever two is. You know this from your record days. Live was really unexploited because it wasn't a global business. Live followed the record business, so for thirty or forty years, you only toured where you sold records, which basically meant you were a US Western Europe business. That's all the labels cared about in generally for thirty or forty years. The minute the Internet unlocked, the fan um was everywhere. So Rihanna has two hundred million followers regardless of where her record was sold. She's got, you know, thirty million followers in Brazil, so now we can go to Brazil and sell out stadiums. We weren't able to be a global business before because we really could only go tour where the record label was selling the record, promoting the album, buying the airplay. Overnight that nineteen year old and Mala and Cape Town uh Is discovered the artist on their own, and now that fan is global. So our business has been booming because as big as you think Live Nation is, we're market share on a global basis. Were we got lots of markets that are on fire and going to grow over the next ten years that are just finally getting great venues in South America, South Eastern Europe, Asia, UM, so it'll be a global business. UM. Lots of growth globally for the next you know, multiple years, as as the infrastructure gets built and the artist goes global. So this industry has got a lot of upside in it. So who owns Live Nation stock? Can you break it down us generally? Yeah, it's so it's obviously a public company traded uh, you know, freely stock. The Liberty Media, which the Liberty Media was an investor in I a c. Which was ticket Master, so they owned fifteen percent of Ticketmaster. When we merged with Ticketmaster, we uh we inherited the Liberty Media, uh, which is John Malone, Greg Mfei. So they've been there now the last I don't know eight years or so. They've increased their stake and they currently own thirty of Live Nation and then seventy percent of Live Nation is freely traded amongst uh, you know, the public and institutions. Okay Malone and the name of the company has changed a few times, but he made his money in the cable business and has had great success. His right end person is Greg Maffey, who's chairman of the Live Nation board. So what does he do or what input would he might have that would influence the direction of the company or you're thinking, well, listen, I don't want to undersell or oversell. You know a board, Liberty has been incredible shareholder and John Malone and Greg I give them full credit because they play long um and UM and they they always let the operator and the CEE do his job. And John's history has been clear on that. Whether you've seen the recent days David zaslof move that John controls Mike Freeze most most of his history is about backing good CEO s um and letting them do what they do. So they've been incredible shareholders. I mean again, when we were eight bucks and ten bucks, not once would gregor John talk about the stock price. So we just talked about how we're going to grow the company. So they've been great, real long term shareholders. That's the best thing you can help for in any equity or any debt you have, is that they're playing long along with you. UM. Given I'm playing long my entire equity since I started this company fifteen years ago, and what public has been about my equity, not my pay So I'm only playing for long term equity, and you want your shareholders playing for that. So they've been great. Greg is is that. You know, we've had multiple chairman now Greg has been the chairman. He's been very supportive UM. But Liberty does not bother me in any operational part at all, and and a board doesn't do that, that's not their job. We we meet four times a year and we talked about long term strategy. How are we going to grow the company. What are the opportunities to grow it? What do I need? What does the company need? What resources? UM to help grow our vision? So we set the strategy internal. We we show up at board meetings with our vision, our long term plan, and their job is to ask the tough questions to make it a better plan and then ultimately support it. But zero operation input, only long term resource input. Now, one thing you know, we live in the era of disinformation and misinformation is we've discussed previously, Liberty cannot literally take over all the stock. There's a limit on their percentage. Can you explain that? Yeah, I mean it's we We ended up inheriting a shareholder agreement that was the Ticketmaster I A C to sharehold agreement. So when we when they merged in with us, we inherited it. Liberty two board seats and maximum equity ownership UM. And that's that's kind of where they are at, and we've been thrilled to have them at that UM. So they can't buy more stock in theory under the shareholder agreement UM. And that's uh, you know that's kind of been in place now for ten plus years and and we'll will exist as long as as the board and and Liberty think it makes sense. Okay, need let's just say Live Nation is a public company. Do you do have quarterly earnings reports? To what? How much of your time is based on servicing Wall Street? Obviously you're on the calls, but and you have a CFO, how much of your time does it take? Doesn't take much of my time. I got a great team, and you know, you build a great team around you. You know, we've been public for fifteen years now, so this is this is not a new skill to us, if you want to call it. It's uh, it's baked into our DNA and corporate staff. So Joe, Joe Burtof is my president CFO. His team is amazing. They do all the hard work, all the audit work, all of the financial work, all the preparation for the reports. I have limited UM, you know, input into all of that. In terms of the governance of it. My job is to set the vision and deal with the future of the business and the strategy of the business. So it doesn't take a lot of my time. It absolutely takes a lot of their time. And if you worked in their department, they would tell you that's a that's a lot of work. But it's a contained corporate group that works with them to get those reports done and are earning earning is done. But you know, listen, a G I'm sure is no different. I'm sure Phil is not letting them off the hook very easily. I'm sure they're preparing week monthly and J and others are answering to Denver and preparing um whatever they've got to prepare in a monthly and a bi monthly basis to to keep growing their business. So anytime you get to a certain state big someone is asking where the where the businesses and looking for ongoing reports. So I just say that in the sense of I've never I always have said I don't don't find public being a negative on my business. I I've always said I think being public has been a great, great advantage to my business. For the last fifteen years, UM, because it does take you out of the bubble that you live in in the music business, and it makes you better because ultimately, when you're dealing with Wall Street or investors, UM, they don't care that I know, UM, you know, Bano. What they care about is what's the business all doing? What what what's the prospects of the business. How are you going to grow the business. So it does get you out of that bubble of music relevance that we all think we live in. And then you have to cross that street and talk to adults about what is your really your business and what's the core of your business and how are you going to grow your business? And I think that's made us healthy because we've been able to keep one ft in the core of what the business is about, but also step outside of the echo chamber of Hollywood and the music business and talk about our business from a more strategic perspective. UM. And I think that's made us good. UM. And also you know, as you you've seen, we gotta wake up four times a year and and deliver and talk out loud about what we're gonna do and actually deliver that UM. So that accountability um, his, I think made us, made us a much better company. Okay, Now the average punter would say, you want a company with no debt. I remember when Irving was still working at Live Nations says, you know, if you have no debt, you have a lazy balance sheet and you're right for a takeover. How much debt does Live Nation have? And what's its philosophy and debt? For those who really don't understand, can you play that out a little bit right? Yeah? That was my famous first earnings call when we went public in two thousand five, I was and we spun out of clear channel. They were gonna I remember going to add add four or fion in debt to us, and I convinced Randall and Mark May's that we didn't want that debt. I wanted to start with a fresh, clean slate so we could build our business. And Randall Mace was still on my board was supportive. So I'm very proud that I have no debt. And my first earnings call, an analyst gets on and says, you have a lazy balance sheet, and I had no idea what he was talking about. Only on on the earnings call would you find out that no debt was a bad thing. Um So, yes, that's the famous lazy balance sheet. UM No. So you know that the prospect of debt is simple. You're you're gonna grow a company, um and you're gonna ultimately need to borrow debt to grow your business as you're building your business um. And you know, depending on what error you're and what's the cost of debt, and debt historically has been fairly cheap. So we look at we look at Live Nation. Most companies look at what is your your kind of your leverage rate against your profit, your ibada, and you never want to be, you know, two over leveraged. We've always been somewhere around three times leverage. So that would mean whatever my IBADA is, we would have three times that in debt. That would be considered a very very safe balance sheet, a smart balance sheet because if you could borrow to three dollars to help grow your company and you can get a better return for that debt than what the cost is, you should do that. UM. So we've always been on that. We're living right now even through this crisis, because we had a conservative balance sheet going in. We're probably leveraged that four times and at the time we get through twenty two twenty two, will start putting paying back down our debt and will live somewhere in the three times leverage debt, which would be very very conservative. On Wall Street companies you hear about that get in trouble would be seven eight time leverage on their on their ebitda um. But we've always been very conservad it Evan, we'll stay in that same range. Okay, let's leave the finance behind for a moment and go more down to the street and the consumer level. What we hear is America's open for business. Live shows are returning. Generally speaking, very few live shows have played of a major caliber, not small club shows and not socially distant shows. So we had the food fighters at MSG. Certainly Vegas is open, but as we talk, the Delta variant is raging now. Of the people who are getting that are the unvaccinated. But the first question is when can we expect or is it still in the balance full playing of shows. Well, last weekend was really the start for us. Our amphitheater season open last last Friday, so that would have been you know, Jimmy Buffett's Luke Bryant sold out Amphitheater shows from Boss then all the way down Nashville, etcetera. So that that was our first weekend of full twenty seven. Amphitheater tours started last weekend, so we're fully kind of committed now on across the board. Amphitheater season is full open, full capacity UM and our first big festival is in two weeks that is Rolling Loud in Miami, a couple hundred thousand people. So as of now we're fully open. The UK opens on Monday, and we have eleven large festivals happening in the UK in the month of August. So aside from all of the Delta UH, recent news UH seemed to be full, full steam ahead and in all states and in the UK. The rest of the world looks like it's gonna gonna be a few months up until maybe six months behind, depending on where they are. But we still still are unscheduled and opening up right now across America. Okay, let's just say, if you print a disclaimer, let's start from the threshold. Some of these acts are printing disclaimers vaccinated people only. Okay, we all know that in the honor system there are people who slipped through. What is Live Nations feeling about this? And where does the liability lie? You have lawyers who say, ultimately your disclaimers work where they think they're gonna work, or you buy insurance? Is it the act? Is it? Live Nation? Amplify that please? I mean it's all it's all new territory as you know, Uh, you know what I what I like everyone to be vaccinated? Absolutely? Um? Is it? Is it? As you know in America, no simple system right now from federal to state. Everyone is making their own decisions, um and um. And it's you know, as you know, it started six months ago where we thought everyone was gonna have to vaccine passport. May be there're gonna be some minimum requirements to everyone just kind of dropped, dropped all requirements and and in a in a state to open has opened. So right now we're we're in you know, we're following whatever the latest government state mandate is. Um. And also as you know, many of I work for the artist and many of them have some some have different opinions on what they want or don't want in terms of vaccine requirements. UM. So we've been we're open up now. We don't think that the liability is is going to be a factor. Um. In the big picture, it's very very you know, everyone's vaccinated, everyone has the opportunity to get vaccinated everyone. No one's forced to go to a concert. Um. All all of those things that happened at that concert or well well disclosed. So we don't think right now that there's any not any. We don't think there's large liability issues overall. Okay, who decides if it's vaccinated? Only show the artist or live nation or the building. Pretty much the states right now, so as you know, it's Florida, Texas, most states you can't demand vaccine requirements. Um. So other than right now New York and California, those are the only two states who are still some regulations over five thousand seats in terms of vaccine. Every other state is pretty much open for business, not requiring passports, are not requiring vaccines for for large events. So we're following whatever the state regulation is is what we've been following. Okay, now talking about your SHED shows that played, how was attendance last weekend? Was great? We were you know, we really saw after July four any of the SHED stuff that wasn't popping on the on sale really got a big kick after July fourth, and we assume after everyone either saw it on TV or felt they were opened up and saw the world opening up. That seemed to be kind of the next level of validation for customers saying this is real, the show is happening, buy a ticket. So last weekend we had a record uh kind of weekend, and um, we're seeing every day now the raps are doing better and better on the amphitheater shows that were some of them were stalled, and I think that's a lot of confusion in the marketplace and customers weren't sure is it going to happen not I have to be vaccinated, don't So I think some of that confusion has slowly lifted as these shows are actually playing now and people believe that there there, we are open for business and what is the future of the shed. Certainly when you took over and you inherited the buildings, a lot of them, a lot of people felt that many of them were built on the cheap and they were tired. Where we at with this sheds, you know, they continue to be an incredible good experience. I mean, they're they're not a billion dollar indoor arena like the latest San Francisco arena by far. But they are a beautiful place for eighteen thousand people to sit outside under the stars and uh drink a beer and um smoke a joint if they want and watch a show. So we still see the vitality of the amphitheater has not waned at all. We've had record years coming out of nineteen. Um, so we're still you know, we we still believe our fifty amphitheaters are real vibrant. We did a lot of work. Really, where we had to do the real work, Bob, was the programming of them. We had to make sure that they weren't just old classic rock. Um. So, I don't know, five six years ago we made sure we really you know, went after a younger artist, pop artist, hip hop artists, make sure we expanded the portfolio and that was successful. The business has been strong and eighteen and nineteen were record years and we assumed twenty two will be a record year. So um, they continue to be a strong piece of our business. Um overall, and we're still and we're still and we're still opening them. I mean, we like developing them. They're they're they're good businesses. Okay, are those books nationally or locally? About seventy national local on the amphitheaters, and then what about live nation in general? When is something book nationally and when is something book locally? Well, we have if you do macro numbers, we did about thirty thousand shows in forty countries in two thousand nineteen. If you just did a national versus local, you would have out of those thirty thousand shows, you'd only have six or seven thousand toured shows and about twenty five thousand local booked. So it is still a local business. Globally, you know, the Milan, Italy is the Spain, the Australia's there's still the majority of that business is still a local book business. The tours we do on the national level, we would do, you know, we would only do uh, we only do a few global tours a year. We do a lot of US tours a year. But it's still a local business, a national business, and and then last a global business. All moving towards national and global. In five years from now and ten years from now you and I will talk, those numbers will keep moving to central as artists are now especially younger managers look at the tour as something that they would want to lock in on a national and global basis as a partner. Um. So we're seeing a lot of that movement. Okay, tell me about the revenue streams. How many revenue streams do you have at Live Nation? What's the great line that one of the investors used were like a river of nichols. Um, you have of a lot, But I mean generally you're you know the business model is you we spend six billion dollars a year at midnight for those thirty thousand shows. Those shows put a hundred million people through our through the venues. UM. So once at that course six billion, that return is the is the low margin piece. Artists are making most of that money um. And then our job is to monetize the hundred million people that walk through the door. So you have advertising as a big business for us. Sponsorship advertising, um, that's a huge, big business for us. You have the second biggest is just all the incilliary revenue, whether it's the food, the beverage, the parking, the rebates when we put shows in um in arenas, we've got a rebate system if we put so many shows in a year, so putting shows in you're getting paid either in your building or someone else's um. And and then three would be our service fees at Ticketmaster would be our our our our third revenue stream. So those are the those are the three big pieces. And how do they split up in terms of let's call it net in to those three streams, what they conduce, they're almost let's you could almost call them thirty three percent each in a macro level, they're they're all equally important. Ok, okay, just thirty three percent for sponsorship, thirty three percent for ticket for the actual show, and the other thirty percent we would call ticket Master, Yeah, I ticket Master on site and sillerary revenue and thirty three advertising very small, very small percent at the door. What was the status of sponsorship when you took over fifteen years ago, and what is it today? And what does it look like and what are the opportunities? It's a great line. You know, I looked sponsorship. I mean, listen, I looked at Live Nation at the time we were sponsorship was a uh, you know, a banner at at an amphitheater. It was a it was a you know, I think one of the things we did right at Live Nations, we we took a lot of things away from the promoter in a positive sense. Right, the promoter shouldn't be worried about sponsorship and venue management and websites. Here's a pee books and market shows. So when we put Russell and built a sponsorship division, UM, I think that's that's why far been our biggest growth because today you know it is servicing CMO CEO relationships. It's a we have an incredible ad network that we sell across our platform. We've got a measurement system to sell it, to validate the sponsorship on site offsite UM. We have incredible on site distribution system where you can talk to and target customers and and UM and use segmentation to to look use our data to really narrow down exactly. So a very professionalized business versus banners. I mean, our job is ultimately we're trying to sell an audience to a brand. And the more you know about the audience and the more you can convince them that you can target that audience and measure it, the better you're going to do in advertising. So we look at our business as a hundred million audience it's a huge audience. Advertisers, well, they spend a lot of money on TV and digital, that's a different world. They're always looking to say, well, how do I touch customers directly, whether it's through music, sports, events, UM and if we can be the leader by saying listen, were not not only want to uh be your partner, but we know nineteen to twenty four year old, this demo, that knows this UM that has appeals to this target and we can reach them on Thursdays at scale, we can help you sell Evolvo. I mean, the more targeted and the more precise our data is, the better our businesses were with the brand. So that would be the if you want to simplify it. That's the that's the core why we're we we do so well in that space is we have a very smart data team, a very smart segmentation team, and we're selling the audience, not the artist. So we can sell you enough scale to UM to advertise on our platform, whether it's on site, whether it's through a digital through a email, touch through our app, through a through their app, through an event. You know, there's a host of ways we can reach those hundred million people. For you. But most importantly advertising is do you know your customer? Can you tell us who your customer is? And can we measure and monitor if we're if we're really reaching them with success. Um. So that's our ongoing work and and and advancement and that in that business. Okay, forty years ago this started with the Rolling Stones and jove on what did jo Van got? They got their name on the actual ticket. Then we had a lot of money coming into sponsorship and then all Wa Baddison Avenue pulled back and said, we're not sure we're getting value for our money. If you have a car, CuPy, you have a deep pocket potential sponsor, what is the what are you selling them that really works? What works today? You know Jet Generally a sponsor is gonna come to us, or brand's gonna come to us and say I have a I need to reach a target. They know who they want to reach obviously, So when a brand comes to us and says, you know, we really are having a tough time reaching you know, forty to fifty five year old boomers who we think want to buy the Audi car, because there, you know, this is our target. Can you reach them? That's how it would start right. Our job then is to say, well, actually, let us show you average customer that goes to the Grateful Dead, but you know, we can give you a whole bunch of shows. We have sixteen point one million forty to fifty five year old customers that are showing up at our events in our database. We could reach them. We want out. So that's the first piece. Convince them that we have a big enough audience that they care about that seems relevant to them. Now too is then let's develop a program that can hit those sixty million customers. That's that's good for you in the brand. And that's where whether it's as lame is putting the car on site, the simplest idea to We're gonna email all of those customers. We're gonna offer them every time you come in for a free demo at the audi dealer, you're gonna get a first access to a concert ticket. You're gonna get a access to a show, you're gonna get a free ticket. There's a hundred different programs you're gonna create the real magic. And what we do is we've got a great team in New York Customer under Darren Wolfe, who is creating these programs to meet that brand's need. So it's every brand's gonna be slightly different. They're all got some idea reaching customers in the music space on site, uh, in a live environment, and then they want to create some branded program ROMP for it, and that's what we're we're best at doing for them. Needles just say big Star, certainly superstars. They say the tour is sponsored by ex company. Do they bring that to you or do you sometimes bring that sponsor to them? How does that work? I would that would be separate. And you're right where you're referring to earlier was every brand manager or CMO probably got burnt by doing an artist sponsorship a tour deal, probably didn't get the value they wanted because it's hard to do a tour deal and one tour um and put some signs up in the in the boardwalk and signs in the in the in the VIP gallery and do some meet and greets and think that's a lot of value. That's not, you know, not reaching a lot of customers. So you saw brand brand's kind of went two ways. The either went really deep with an artist and did a real image program where they really got you know, a d doesn't Beyonce where they really integrated the artists into their brand and um and those are you know, very deep relationships and and and let's call those um you know those artists direct. We don't have anything to do with those. The the the artist and the brand come together and a bigger and a bigger deal and hopefully that works for them. If the brand wants to be in the live business, they probably have ended up coming to UH to Live Nation or a promoter and said, you know what, I don't want one event, I want scale. So that's why we did a good job over these last few years. If we don't sell the artists tour, we sell the fact that we have a hundred million people coming to a to our audience where the you know, let's call it the NFL. We have a large audience, so we can deliver your message multiple times to a large audience space. And that's the only way, you know, you tend to win. And advertising is large reach with good impact and direct messaging. So we end up never selling one tour that's probably not going to be efficient. We're going to sell you a summer six month program, a two month, a five year program. We're gonna sell you a lot of customers over time that your program can touch and and deliver against. That's where really we've turned it from a one off business to a credible sales channel that brands say, Okay, I can I can use Live Nation. I can put an advertising program together and I'm going to reach a large audience base over the summer. That's an efficient buy for me. Um and I'll add that to my marketing mix. Okay. This suddenly drifts into ticketing because certainly for the big acts, they have deals with m X or maybe City where people can get tickets, card members can get tickets early. Now this of course involves Ticketmaster. Let's say it's a Live Nation show. How does this all work out? Yeah? I think for the last ten years, I think American Express God Blessing, they created that program called Front of the Line. I give them full credit because it's one of the you programs that probably has lived this long. Now. It's been replicated by most credit card companies. Um And I think every credit card company probably has some relationship with some sports team and our promoter. UM And I think the access to tickets, it's probably the biggest value a customer wants, right, the hardest thing to do is to get a great ticket to a show because there's such a big demand and limited supply. So pre sales became a big um item for brands that we're willing to pay, uh, sponts willing to pay promoters, artists venues for access to tickets for their fan base in exchange for a sponsorship check. So uh, we're we've all participated in it. It's a good revenue stream um for US. Live Nation has it for some of our shows. Sometimes artists have it directly, promoters, festivals, sports teams. So pre sales has been a really defined category of sponsorship, if you want to call it um, started by American Express and now used by most brands as a value to the sponsorship package. Okay, dirty little secret of the business is that on the on sale it could be a twenty thousand seat arena, and on the on sale date fewer than a thousand tickets are ultimately available. Then who decides on all the varying levels of pre sale? Why does that exist? Why are we in this world? Yeah? I wouldn't say that's the case anymore. That that models flushed out over the years, you don't have any more of these UM's not anymore. But the no comp tour is pretty much standard now. If you're running a big tour and you're the tour accountant, you ain't given record, label, sponsor, you're not giving anyone anything for free. UM. So that changed over the last five six years, if you want to call it. Most tours now are a no cop tour meeting. Unless I'm proving to that artist that I'm taking tickets and delivering them to a sponsor media property and getting something in return. Uh, they're not getting tickets anymore. And if the label needs them, the labels buying them. So I would say that that isn't really the challenge anymore. Most of the tickets that are going to go on sale at ten o'clock, a very small you know what would be a percent small percent is held for UM for anything other than now, if there's a sponsor involved, maybe they've done a big sponsorship deal. Maybe there's a thousand tickets, two thousand tickets, ten but there wouldn't be. There would be most most shows, most tickets, large majority are going to be available on on pre sale slash on sale, Okay, let me, Yeah, you entered the point. I was actually more interest did less than the no comp I'm glad you covered that. But with many acts, there are different levels of pre sale, such when the general public gets a bite, most of the tickets have already been sold. I'm not talking about any neferious activity. But there's the credit card, there's the fian club. How does that come about in what's the status of that today? But again, let's not use one brush to paint the business. Right, there's you know this, this business always gets talked about at the time. There's there's ten artists that can make the rules different. Then there's the rest of us. Right, So most shows, you know, I look at my pre sales on most tours. You know, there's a very small amount of states that a pre sale will go real clean and sell four or five thousand tickets on a pre sale before the on sell on the Saturday. You know that's that's that's the one percent rule most of the time a pre sale. If you do a pre sale and you do a thousand tick kits are two thousand tickets, you're happy, um, and you'll you're you'll gladly exchange some of that direct marketing that that brand used to help you sell some tickets. I mean, Bob, you know this. Most shows don't sell out. Nine shows don't sell out. So most of the time our challenge isn't that we sold out and don't have tickets. Most of the time is is it's not sold. We don't have a ton of marketing and concert promotion as you know. This is you know, in a big world of all the marketing messages out there. Um, we have a very small marketing budget per show, per tour in retrospect to the amount of noise in the marketplace. So we're always going to find and look for any trick sponsor pre sale media. Well well look, well we're probably going to resort to many tricks to try to get a little bit of news or a little bit of noise around a on sale or pre sale. Um, just because it's it's it's so tough to break clutter on you know, when you're forget if you're you know Taylor Swifter, you know, the Beyonces of the world, the rest of the businesses. God, I'm going on sale on Saturday, is seven others going on sale. I got a thirty thousand dollar budget per city. Um, I got forty thousand spend in Los Angeles, which buys you, you know what, nothing. So you're trying to break a little clutter on a Saturday morning. So you'll take that pre sale when you when when a commerce or a credit cards going to talk direct to their probably targeted fan that wants to buy a ticket. Um, So I would say to you Macro, I don't believe pre sales are the problem with the customer. Um. You know, we can get into scalpers at some point, but the real problem on a Saturday at ten isn't that the tickets are sold two pre sales. The problem at ten o'clock is the tickets are sold because the secondary markets very vibrant. Okay, what actually works instead of in terms of promoting a show, I mean print, TV, Facebook, online. Yeah, it's been um to to changes. Ultimately, the none of the mainline advertising tends to work anymore. You know, there's it's a direct business now. So the best way to sell a ticket is to use the artist socials they have. They are direct to consumer brands now, as you know. So you want to find a fan, go on their Instagram and they probably got twenty million followers or however many some of them have a hundred millions. So you're gonna sell a fan a ticket, probably start with their own their their brands, their social networks. Uh So if you go and look at our database, Live Nation's database of ticket buyers, and the and the artist database, those are probably your two best places you're gonna start. If I advertise against that those two databases, you're probably going to find out most of your customers are there. Uh. Second, then you're right, we do spend a lot on Facebook, Instagram. Uh those those are those are the best kind of response tools for an event. Um. So that that's kind of the the two places to spend digital online and start with the digital online on the artist's main network, and then anyone else's databased like Live Nations or probably a E G. S or American suppress whoever has a large customer database of ticket purchased purchasers um that are like minded or pass buyers. So all online, all digital now, all anything radio print, TV we do is probably just vanity. It's not probably going to convert. It's too wide. We can go targeted now and reach you know, you only have to find thirteen or fourteen thousand fans in Los Angeles to fill a Staples Center. So you don't need a billboard on sunset when you're trying to find thirteen thousand people and a ten million population. You don't actually want to shoot a shotgun. You wanna you want to. You want to be very targeted. You want to find those fans that went before, fans look like they want to go um or existing fans. So more digital we span, the more target and we spend, the more efficient it is. Okay, you mentioned the scalpers, you mentioned the on sale time, the bots, etcetera. Hey, what is the status of that? And be will they pretty much buy anything or only the hot tours? Uh? Well, let me let me just after one. Let me just say one thing before we jump to it. You know, one of the things we see in conscious though, I would say to you is I don't think we have an awareness program problem. Most of the time the artist, uh that And as much as people think that's an awareness problem, you only go to one or two shows a year. I've said this before. I'm gonna forget you know, Yes, if you're nineteen to twenty four, you're gonna go to six or seven. But generally this is not a This isn't like you're in the supermarket and you see something at the check oudisle and you buy it. Going to show is a committed game. You have to find four other people that even like the band. You've got to commit in ahead, got to find a babysitter, you gotta go. Let's it's a many travel experience. So going to show is that we we've done our research is about a two week two week process before you buy the ticket. So it's a committed game. So it's not as if you're you're you know, you just found out about it and uh and I decided to go. I say that in that most of our research will tell you the reason I don't go isn't because I didn't know about the show. Most of the time, it's probably gonna be about pricing. So I always remind my team we don't have an awareness problem. We have a pricing problem. So I may know about the show, but you know what, do I want to go again? I've been twice, I've seen the band. The minute we send them a price offer, we see big, big action. And that's typical of you know, travel hotels. Any of these kind of businesses where you know it's a depreciating asset. Generally you can motivate people by price. So you see a lot of that happening, or you'll that's best. The best way to move a ticket probably is because we were overpriced it, um and um, and that's that's usually the best way to kind of kick ticket sales versus pounding some more advertising on a on an Instagram ad um not so. So that's just a side note. Is it's not only just do I know about the tour, but can I afford to go to the tour this time? Maybe you know there's some things are price resistant, but um um. Sometimes that that tends to be our best lever is promotion. Um so so scalping you you you uh, you know it's ironic, right we we are the only product in the world it's worth worth more of the second it's sold. That's that kind of goes against business sense. Um. Maybe sneakers are becoming that now, but generally the way business works as you try to match market pricing to supply. Right, if you and I owned a company and the and we found out that it's sold out every second that we put it on see we'd probably say we should increase the price UM. And that's how the traditional businesses all work. They find that price resistance sweet spot where there's enough demand UM to meet the need, but it's price properly. So we're in this tough industry where the artist is an incredible brand manager, play him long, and he smartly doesn't want to just take that one show and price it to perfection. He wants to price it to what he thinks is affordable and right for the fan, UM for the long term. So it does create though, a big challenge because anytime you have an eight to ten billion dollar industry called secondary UM, it's gonna be get it's gonna get very professionalized. It's a real business and it's legal in America UM and endorsed, so it's not it's not the hideaway business anymore. It's not a bad business. It's a real business. It's called you know, reselling tickets and it's been legitimized and UM, so it's it's professionalized and it's real as the reality. UM. Some countries around the world have you know, put caps on it and you can only resell a ticket for ten percent and fifteen and they've reacted differently, and I kind of like some of that thinking. But the real in America is the sports business legitimized scalping long before the before US meaning the music business, So it's professionalized. The NFL, the NBA, the NHL. Every team has its own exchange. He saw the Dodgers a couple of years ago did an RFP for their secondary tickets, got like seventy six million. So the biggest question I always get from artists is why are all my tickets on the secondary? Well, the reality is that venue you're playing in probably has a sports team and probably has a secondary deal. And you know, most sports teams don't sell out on a Monday night. For every hot hockey team or basketball or baseball. You if you owned a team, you probably got some suits and a bunch of Tuesday nights not selling out. So you've done a secondary deal with somebody, and as part of that deal, you've probably given them a suite or access to um good seats when the concerts come to that venue too. Um so we're already starting every show is starting with probably season tickets or some level tickets sold or packaged in a sports secondary deal in that venue. So you've you've started already with you know, the the artist probably has or some of those seats are already been been bought up or or purchased UM. And they're they're incredible price um price managers. They know how to buy a lot of inventory. They lose on some and make make on the others, and are very good at at figuring out the whole macro version of what to buy from Saturday night basketball to baseball to concert seats. So very professionalized, very software driven, data driven. A lot of these companies. So this is this is a real business. And I only say that because you know, sometimes in the space we get a lot of a lot of a lot of talk about it and and and until we recognize it's a real legitimate industry StubHub see geek ve. These are professional companies, public companies now UM. The reselling of a ticket has been a you know, into unless someone wants to wake up and do some legislation or or try to do something different. It's a legitimate business UM, and it's part of the system. I think I try to convince artists every now and then that it's not the boogeyman, because it's real and it does live. It is existence, so we should think about it now. If you want to solve it, the best way to do is to price your product differently. But if you don't price your product differently, you're probably going to be um at some point. There's no way around it. The secondary market will exist. Okay, but let's talk about the on sale availability. Uh, no one knows. You might know the exact numbers of tickets that go to spot you are acquired via box and go to scalpers as opposed to regular customers. Forget the reselling of that ticket. What percentage on a sellout show end up in the hands of the secondary market essentially from the on sale date. Well, again, I don't want to paint one picture because again you know, shows aren't selling out and don't have a hot on sale. So I don't want to paint one number and say, oh, you know, every concert goes, but you are, you know, on the ones that get the press, the the bts is of the world, the ones where the where the family members trying to buy that ticket for their their their their daughter or son. The hot ticket you're gonna, you know, we're gonna. I looked at a number, you know, we've we've stopped over thirty billion bots over the last while, I mean Saturday morning on sale bots trying to steal tickets or grab tickets UM is a is the biggest challenge in our space. So when you hit a hot on sale UM on a marketplace on a Saturday morning, you know you're you're gonna get a high percentage of those tickets are going to be acquired by bots slash scalpers at ten ten between ten and ten oh five, right, we're always living that. By ten oh five, somebody's mad that they think Ticketmaster must have given tickets to the scalper because there's ten pages of bots of us pages on Google saying they've got tickets available. But they're they're fast and they can eat up ticket inventory very very fast with the computerized bots. So it's a big problem ten o'clock or on sales in general being being scooped up by by bots. Um is a big part of the what makes the experience of ten buying a ticket uh not great for a fan. They're they're confused on why it's sold up in a minute, and why there's pages of self helpers with tickets available, and what are the strategies at your company to combat that. Well, we're you know, as I remind people, Ticketmaster would spend the most of any buddy. There's there's were brought the only one that's spending any money, right, Yeah, there's no one else is waking up trying to stop a secondary buy on a ten o'clock Um so, so Ticketmaster has you know, huge security department. We're gonna spend tens and tens of millions a year on software and bots and trying to find bad actors. And is that Bob Luffett's trying to buy a ticket or is it an I P? But you know this is it's an arms race. These are professional businesses. This isn't like, you know, an easy I P to trace and stop it. So we do our best to try to deliver an on sale that a fan has a shot at buying a ticket at the regular price. But the reality is, you know, the business, that the business. There's no one else out there spending a dollar trying to stop a bought at ten o'clock. StubHub, seek geek Um, access tickets, the sports. I mean, there's no one else spending a dollar trying to stop an on sale Um, so we're we are as big as Ticketmaster is. It's still in a ten billion dollar arms race. It's a tough business to be able to develop any any stoppage against ten o'clock on sale at that level, when when there's that much money involved. Okay, let's just look at the take the long view. As you mentioned earlier. I remember forty years ago cable TV, if you wanted to get a channel for free, you could go to the actual cable. They put these filters on. You remove the filter, you got the page channel for free. Then they digitized everything. There was no theft. Needless to say, you know, we're going to move from hard tickets two tickets on the device in this product progress, is there a way that's actually hurt the box and hurt the scalpers. You know, we're we're digitizing our ticket the last couple of years, and you're right, when you move from a PDF to a digital ticket, you in theory can could imply some control. Um, But in America, UM, you know, there's no political will to put any rules in place to limit um those those those uh, those those controls. So we have a digital ticket, we could in theory say that you bought a ticket to the Jimmy Buffett Show, you can't resell it. You can only resell it with a ten percent uplift. UM. But if we try to impose any kind of controls on that, you know, scalpers and others are pretty good at lobbyists and getting someone cranked up that there's a free marketplace and who owns that ticket and I should be able to do whatever I want with that ticket and controls by anyone are allowed. So we don't see the marketplace. We're looking to try to control the sale of the ticket. That's our challenge. We we believe that there could be controls. You could do it tomorrow, um, but there isn't there. There isn't the political appetite both in sports most artists want to clean on sale at ten o'clock is a reality. UM. So we don't see We don't see it as a way to you know, uh, we don't see it as something that will come into effect and make a difference. We think that the market um StubHub and others have have done a good job of convincing everyone in Congress and I otherwise that a ticket should be freely traded. I mean, you look you got Bill Pascal. Look at his boss act. He's he actually wants the irony is he's doing. His boss act is about making sure that the scalper has free controlled access to every ticket that I, Ticketmaster and others when you put a ticket on sales should make our platform freely UM available that if you buy it on any secondary site, that I can walk in the building and have free access and free free distribution and control, so that that shows you where the where the marketplace is um. So we we believe that listening to digital tickets good for Live Nation and ticket Master from a from a business perspective, because going back to my earlier story about sponsorship, the more I know who Bob Luffitz is that walked in the building, that's a big advantage to me just from doing a better job in my marketing talking to you next time, up selling you. So for me, it's just good to turn a PDF into a piece of data, and the better I can use that data to sell more tickets, up sell and have a better relationship with the customer. It's good for us turning those hundred million people to walk in the door from a PDF into it actual segment of digital human file is much better for our business. I don't think though, we're going to be successful imposing restrictions on the on the business and the distribution of that ticket or the transfer ability of that ticket. I don't think there's the political will to limit any of it. Part of what we got into um with some of these centators was just you know, our ticket and is it really transferable? And a lot of the them of the stuff you you read about was about was were we going to limit the distribution of our ticket? Where we're gonna make you buy a ticket a ticket Master as a digital ticket and the only way you could resell it was at the Ticketmaster resale um. And that's that was kind of the big basis of a closed platform that the scalpers and others had excited some of the Congress about. We had never planned on doing that. We don't believe in a closed platform that market is long sled. We're we're we're I've got an open platform to date UM. But that shows you that that's kind of the the the the the intent of the lobbyists and what their concerns were that that anyone would imply any kind of control or rules on the ticket. Prior to the shutdown, there was a lot of noise your company about the verified m what's the status of that now and was it effective? You know? I think we I think prior you know. The good news is the shutdown gave us a lot of time to rethink what is it we want to get done uh in our ticketing strategy. Um And I think we. I think we were fighting the fight with some band aids that probably weren't effective enough overall to make a difference. Um. So, I think we've learned that verified fan is another tool in the toolbox. Is it a good idea? Yes, it's a great idea, Bob that if I'm going to go on sale, that I can get verified fans registered in advance, so I at least have a shot on the on sale of saying Bob Left is registered and now we can sell you a ticket on Friday. It's a great system to take a little bit of load off the on sale and distribute it through the week prior to So it's a good tool. Some bands, as you know, are very obsessed with I want to do everything I can to make sure the fan buys my ticket and no one else does and at Ticketmaster, we gotta have those tools and um and we'll have them. I would just say I think we're probably less obsessed with trying to roll out verified fan as we are at rolling out digital ticketing, which is more important overall, and that with the more we get the ticket digitized, the better the experiences for everybody, and the better it is for our overall business. Okay, let's talk about pricing. Pricing is very different than it used to be used to. If you had an expensive just you know, use round numbers. If the best seats were two hundred dollars, the seats and the rafters were a hundred, what do we know the seats and the raffers have. Rafters have gone down to fifty in many cases, and the seats up front of gone to five hundred with what is conventionally known as platinum. So what is the the You know, this is always a game other than the stones have their own style. Uh, it's always a game of pricing. What is you now? And ticket Master and Live Nation are the experts because they see this every day. Whereas an act only goes on tour maybe once every other year. What do you tell acts in terms of pricing these days, Well, two things, going back to our first point. You know there's still billions of dollars in secondary and business out there, so we know we're not pricing the house right, so we have opportunity to at least gap to get some of that front of the house economics for the artist. And again going back to what we said, the shows I'm dealing with in life are not selling out, so I don't ever have a problem selling the front part of the house. I do have a problem selling the back part. Go to my other point on why is the problem pricing not awareness, So I'm always going to convince an artist to redistribute the pricing and how low can we get the back end of the house and probably subsidize the back end of the house on the front up front of the house. So if we can get that perfect sell out, we want to make sure that we have you know, affordable seats in the back last row that's sell out. And if you've got to take twenty dollars off the back row ticket, I'd rather add it to the front row to still get the same gross but but price it properly um with the back end. So artists, you know, listen, We're we were a business that was very very rudimentary for years. As you know, we had three scalings, was you know, a hundred seventy nine and forty nine and forty dates were the same whether it was a Friday in New York or Tuesday in Pittsburgh. So you know, I would say in general, we've We've been talking to artists for the last five years just about nobody prices their product that way anymore. You know, you got a price to the market. You know that the aisle seat is worth more than the middle seat, Friday night's worth more than Monday night. New York is going to be more expensive than Pittsburgh. So I would say that we have, you know, worked hard on a pricing model over all to say what's the best way to price your tour depending on what city, what date. Is it three prices or is there five or six price points that are better for the house? Um? So yeah, I I every year the artists are getting better, We're getting better at price in the house to sell it out, maximize the gross take a little bit of that secondary money off the table that that they weren't participating in, but still find that fine line, whether it's still accessible enough that it sells through. And that's been the kind of the science and art over the last five years and a lot of why the grosses have continually go up and grossers will go up for the next you know, five six years, because we're still dramatically under priced across the board. Now, speaking of that, what we know is the hardcore fans will pay the most, whether it be a platinum ticket or whether it be a ticket that's purchased on a secondary market. They'll pay four hundred and fifty dollars to sit in the first fifteen rows and are thrilled. Okay, yes, some New York City Los Angeles shows you have fat cats who just want to be there, But generally speaking, that is not the case in every market. So these are high demand items. Will we ever get to the point where acts will realize that maybe it's just a perception from the seventies and reality, we should price the tickets at what their value truly is. Oh yeah, that that's gonna happen. I think you're gonna see the you know, like you said, we we do a bad job on pr as an industry because it's a very a concert ticket is still very affordable overall, if you go look at average ticket prices, forget the high ones, just average for sports concerts still affordable. And you are right, there is somehow the NBA gets gets to write press releases about the hundred thousand dollar front row as a positive. Um and this business. If Bruce charges more than a hundred and fifty, you know, it's it's it's a story. So you're right. I think that slowly, the artist of today, the next generation artist is going to look at the tour and realize that their fans, that they want to sell directly to their fans, that some fans will spend more for that experience, and they're better off having that experience and taking that dollar into their growth than someone else. Um and and and and compared to other things, it's still wildly affordable. I mean, I took my boys to Disney World. I mean, geez uh, that's not a cheap day. Um So most of the other things that are this valuable in life. You know, you don't go to eighty concerts a year, like sports teams. There's you know, that band comes to town maybe what once every three years, to Los Angeles. That's a high demand product. That's an incredible experience. You can see it once every three years. That's gonna be worth a lot more than you know, eighty games a year for a sports team that you can see every year. So yeah, we were still completely underpriced. I think this next generation will will come to reconcile that they don't have to be ashamed of how spectacular that experience on stages. There's spending a fortune these artists on the production. Now you mean fifty forty seventy trucks at stadiums. They're putting these incredible shows on. So um, I think that pricing will start to reflect the demand over time. It's the best way to address the market. Let's talk about the Stones inflex pricing. That's not your company, that's Concerts West. But essentially there's no scalping because they change the price based on demand and conventionally you get a ticket day of Is that the future? Is that really only for the Stones? Well, I listen, I do give. I've always given, you know, I think Mixed just a genius business manager. We did this, We did the show at the Hollywood Bowl and I remember it was I don't know, I'm gonna get the exact math wrong, but it might have been a forty year anniversary and he had charged six dollars forty years ago and it was six d this time. And he said, you know, the the sett list hasn't changed, just the price. So I think, Uh, he's done a fabulous job from day one of being about the business and and uh and being that's been accepted as part of his brand. So I think the Stones are incredible success story. Um, but you're right, it's gonna take more artists like that that are gonna say I have a product that should be dynamically priced and should match demand. And we're seeing that from I would say when you talked to new younger managers of today thinking about touring there, they come at it in a in a more fresh way that way on why why am I not going to charge the right price? Why is scuppers? Why wouldn't I price a house differently? So I think there's a there'll be a new generation of pricing that comes up through through the next ten years. Okay, let's switch to the fees. You and me both know the inside the history of the fees whatever, but the public really can't get it, can you explain how Ticketmaster doesn't get the entire fee. Yeah, I mean again, the fee was part of the original um price UM that Fred Rosen when he started ticket Master. You know, to have an exclusive ticketing service in your building. UM. You you charged a service fee to execute the business. And you know, it started at one or two dollars. And Fred would tell you the story. Every year when he went to renew that venue, would say, great, just add another dollar, add another dollar, and and it got at it for many years. UM. And it used to be you know, six dollars, seven dollars, eight dollars, and it was split probably fifty fifty back in the day ticket Master in the venue. UM. And then ultimately venues continue to uh to uh kind of gets hooked on the drug of the service fee, and ultimately, you know, today you look at service fees and venues UM, it does becomeing a very important part of P and L UM in that venue, and it's the high margin piece of the business. As a revenue stream UM that you you know, you're you're used to having and part of financing your building and your operations. As talent costs or in sports for sports business athletes or however, their bills have gone up, so it has become a very lucrative piece of business for venues. Now, you're right, in a typical venue, in a sports venue, a sports ticket, the team and the venue are probably getting of the service fee. So if it's a thirty forty dollar service be um, they're gonna get it. In a concert ticket and a typical big arena show, um, ticketmaster's gonna get the same thing. We're gonna get two bucks, three bucks out of that forty or forty five dollar service fee. The rest would go to the venue. UM. So it's you're right. We we have a you know, a challenge where the ticketmaster takes the punch in the head for the no tickets available at ten am and a thirty five dollar service fee, two things we really have no control over. One we're not making thirty five and two week we can't control that the market gets bought up by secondary business because of underpriced industry. So you're right, it's a tough it's a tough pr hit to handle, um and and um, and it's kind of been part of now a historic revenue stream that that that seems to be uh here to stay as as as venues and sports and music costs of risen. So what percentage of ticket Master's ticket sales and or revenue are contracts as opposed to sports another verticals? Um? What would be the off? You know, roughly ticket Master sold about five million tickets last year globally. Um, sports would be sports would be of that business from a sales perspective. Um. So yeah, that's about the split. I mean, I'm gonna we do a ton of season tickets involved where we make no fees. Um. So those are kind of called no feed, no tickets. But what sixty or seventy percent of the business would be sports in general? But we make more money on our concert on the concert business than the sports business. Um. Because obviously Live Nation happens to be a ticket a concert provider or concert venue. You where we're uh, we're servicing ourselves, okay forgetting making an exclusive deal with the building. Why should someone use Ticketmaster as opposed to one of its competitors. Well, if you're you know, there's there's there's almost there's two businesses and ticketing. Right, there's the non sports venue and then there's a sports venue. There's let's call it reserve tickets versus single tickets. If you're in the single ticket business, event right business, festival business, UM, that's not a hard business to solve in terms of software. So they all do a great job and we do a good job in it. Ticketmaster has done a great job for many years in servicing sports teams. Sports teams are incredibly high demand. So when you're doing UM, when you're servicing the sports NFL team, NBA team, NHL team, you know, we did an audit recently. We'll run over two to three hundred different programs products for all of those teams, reports, UM, transfer ability, season tickets, sports. So that the biggest success the ticket Master has had is if you're going to be if you're if you're a big sports team and you have a season ticket based in a single taste base, you need you need software to service all of that. UH. Ticket Master has two great platforms, Arctics and Hosts, which service your season tickets as well as your single tickets all together, manage all of those transfer those, provide audits for you, sell your tickets for you, cancel them, manage your box office. All of the infrastructure needed to be a great enterprise platform for season and UM single tickets. That's a complex business to manage, and every team has twenty different customized things they on it to do. I wanted to talk to this, I wanted to do this with a sponsor. I wanted to do this with the Hall of Famer. So it's a real it's a real hard model to scale ticketing at the level it is and be absolutely customizable to such level. So that's really where its strength has been. When we launched our own ticketing company, we thought we would be able to do it, and we really realized that there was a hundred I had an audit company come and look at Live Nation ticketing versus Ticketmaster, and there was like a hundred nine seven things that Ticketmaster did for the venue that we couldn't even do. So it was all of this years of customization for Broadway for the venues UM that have made that platform very very viable UM and and UM and useful for the venue. So you have two things that Ticketmaster does better than most people. It's got a highly scalable platform, meaning it can handle billions of bots at ten am. We'll still customize it to your needs. When you say I'm a a football team that needs you to do this on a Sunday with the church for a benefit form for an exhibition game. Very very hard problems to solve at scale. The second thing that has done really well when we broke the company too, is it still happens to be incredible big e commerce marketplace. If you look at putting your if we're gonna service you as the venue, the biggest value you're gonna get is we're gonna sell your ticket at our marketplace where a majority of customers go to still buy their tickets, where it has the highest um you know, the e commerce scores of ticket sales. So one, we're gonna, you know, do two things. We're gonna have a great platform that's scalable yet customizable, and to we're gonna have the best marketplace to put that ticket for sale, help you sell that ticket, use our database, sell you more tickets, and we can we prove over and over if you leave our platform, odds are your ticket sales will go down just because we happen to have a big audience. Um. So we're we're we've been you know, successful at keeping both of those plates mean well, lots of engineers every day customizing our main platform and great e commerce people thinking about how we keep putting mor um, fixing our ux, getting to the app, making sure we can sell tickets better than anyone else when it comes to that seat map and I want to ticket um to my football game or my my one off game. So still too great skills and global that have been able to uh to to lead the pack there. Okay, if Live Nation hast of the concert market internationally, what percentage does Ticketmaster have domestically and Live Nation associated ticketing platforms around the world have internationally well Globally, the ticket team business is still fairly fragmented, So I don't know if we have that number there would be I wouldn't be a big number globally because his markets are still fragmented. Um and in the US again, you know the business of ticketing globally and ticketing in the US when you add when you look at the market of ticketing, we do a great job on one segment called arenas and uh and and amphitheaters, but you know, there's a whole world of ticketing that we don't participate in or don't have a high score. Whether it's you know, all the college businesses that Paciolan do the secondary business now sec of Sports seek geeks and Vivid's okay. Now you have an act that wants to go on the road, how do you convince them to come to Live Nation as opposed to a competitor. And at the end of the day, does it really just come down the money? Uh, you know it's it's never about the money. But it's always about the money, as they say. You know, listen, you still have to have the infrastructure to get the job done right. You can, you can win anything. It's it's the repeat business that matters. So you know the big piece of our businesses. We have a hundred offices in forty countries, so you know, think about it. Ultimately, we're a huge distribution company as well as a financing company, so you have to do both things. You have to make sure that you have the best financial incentives to win the business. Um. And whether it's a tour or it's local, but ultimately you've got to make sure you can execute the show. Um, you have the best economics for the band, whether they show up in Milan, Pittsburgh, Toronto, or um or Australia. So you know, our our strength has always been go global. A global business is what the artist needs today. Have offices and all the main cities, have the best marketing staff, production venue deals, marketing deals, sponsorship deals, um. And that ends up being you know kind of the business. If we can have the best players and most of the markets around the world, we can convince any artists that we can take care of their tour market at the best, execute at the best, get the best venue rates, get the best production rates, as well as pay the proper financing deal to to secure the deal because of your other revenue streams. Do you find if there's a competition live nation, if it chooses to can always pay more. Now, I mean you know most most of the ultimately you know, the tour that the local business is still a dog fight as you know, you know denver you're fighting. You know your guys versus uh guys. Everyone's got similar revenue streams, so tends to be the same same. No, we don't have any new tricks that the others don't have. So we've all got the same revenue streams. And if it's a tour, it's us versus a g um. They've got similar revenue streams. As you know, they own the buildings, they have the sponsorship, so we all have the same revenue streams to to use to win the tour or the local day eight. We just happen to think that, you know, Uh, I've always believed that it's a local business, and I think that's our competitive advantage very Having a hundred offices and thirty thousand staff executing your tour is a is a big investment to make, but it ultimately makes a difference when you're looking at that band and and talking about do you have boots on the ground to to make that happen. Now, you also have touring deals. I remember talking to you one day there was a relatively nason act with some action and you made an overall touring deal. So how prevalent are those and what's the philosophy behind that? Well, you know, touring deals, let's go. You know, ten twelve years ago was not It was not the norm. And I think every year you've seen more and more artists look at kind of uh looking for a partnership with someone us a g um and um, and I think they become more or of the of the norm, which would make sense because you know, I always remind artists or managers and agents that you know the same reason why you have a record deal. You didn't. You didn't sell off your record by by record store by city. You probably did a record deal because you want one partner thinking about your business on a longer term basis, on a marketing basis. So I truly believe that if you have a tour partner thinking about your tour on a global basis, you might not you know, make money and Denver, but you might make make money in Argentina and South America. You're going to make a different investment basis if it's spread over time and you can play together and you're gonna try to build a pot together. So I think I think an artist today, I think a manager today has a whole new business than he did of the old management system. Right, the old manager had to get you a record deal and a tour deal. The new manager today has got a whole new world to think about on influencers and how he's going to build his brand and what they going to do with that artist. I think when it comes to touring, I don't think it's that complex. In the end, I think he wants to meet with his agent talk about his tour plans and find a good, committed partner that's going to pay market rate with great marketing and support and get that done. I don't think there's a they are obsessed, um with what exact artist or what promoter and spain is doing the deal. I think they're more obsessed with who's my promoter? And I've got to think about that, just like I thought about my record partner. I want to play with a partner that's thinking long term with me. So we've seen that more and more um an artist looking for bigger deals, longer term deals. So what does a tour deal look like in what percentage of your business is that? Or to put another way, how many of you have? Well, because on a global basis, you know we you know I mentioned earlier we did thirty thousand shows. We might have five thousand of those would be a tour deal. A tour deal could be forty dates in America, could be a hundred dates globally, could be one year deal, could be three year deals depending if the artist is on cycle or once a couple of cycle deal or a certain amount of shows. So somewhere between you know, one cycle and three cycles maybe a tour deal. Okay, what's the future of the agency business If we're looking from the agency side. Music representation is a small revenue share of these giant agencies, and certainly when you have the monster acts, do they really need an agent at all? So what's your thought about where that's all going. Well, you know, I think anyone, I think we've all got squeezed in the business. Right. Ultimately, the artist has done a great job of building their business over time, and the manager, the agent, the promoter, everyone ultimately had gotten squeezed over time. Promoter, I know used to be it used to be what a fifty fifty eight twenty manager used to get paid on gross versus net, And an agent's gotten squeezed. So I think we're all in the same business. The middleman ultimately gets squeezed over time if you don't reinvent your business or diversify it. I as a promoter, knew that we wouldn't we couldn't exist. Just as a promoter fifteen years ago when I was you know, looked at Live Nation, it was that to me was just one piece of the business. You had to build a much more diversified business model over time. To win, which we worked on. I think the agents have done the same thing. I think whether you're William Morris or c A A, they've all you know, William Morris obviously very different with UFC and others, but I think they looked at it as a macro business and they've diversified into other businesses to build around it UM so they can try to offer value to those artists and clients, UM beyond just their you know, the historic business model. So I think they'll I think that listen, they're great brands at the car CEA William Morris case you now joining. I think the role of an agent UH is a is a good check and balance for the manager UM. And I think the agent will continue to evolve their services UM, much like the labels have evolved. Right everyone looked at the labels and all of a sudden they're making money on Peloton that no one predicted. So I think the artists are gonna make a lot of money there direct to consumer brands. Right now, every artist wants his own vodka is tequilas, Monetizing his Instagram is TikTok. There's lots of ways to monetize these artists. Outside of the tour alone. The agents are all looking at how do we how do we add more value to the to the UH, to the to the artist. How do we get them into venture deals together, how do we monetize their privates? How do we ponetize um affairs and festivals. So still a big piece of the business and and a whole new world for the agents that they keep evolving their skill set. One thing we know is the traditional let's put the traditional major label business is very different from it used to use. Some major labels controlled most of the market place, certainly in the era of physical distribution, and those were the acts that sold the tickets. Now more than ever, if you look at pole Star, you look at grosses, it could be completely different from the Spotify top fifty. So in a music level, what is going on in general? What do you see in the marketplace? Yeah, you know, but I saw that that that's been consistent for quite a while. I mean, even pop music that charts, we're not always reflective of the sale on the venue, so that that's not new to me. UM. We we've seen that disconnect from disco days onward. It didn't always mean that you could sell tickets. So, um, you know, I I don't see that as uh is anything that affects the business differently, you know, I do think that you look at the business, you know, it's a day and you look at hip hop businesses as you know, let's call that the new rock and roll or the rock and roll of today's generation. That's vibrant and big as ever Travis Scott do you name them are selling out and driving driving venues like the rock and roll of the past. So that's relevant and bigger than ever. Um So I don't, I don't. I don't think the the charts reflective on the ticket sales is a new disconnect. I think that's been happening for for a long time. Okay, so what do we know? You're in this business three d in sixty five days a year. Certainly new managers they may only have one act and are wept behind the year. So what do you say to new managers who have a successful act, it's got some action. What lessons do they need to learn? What do they have to wake up to? Wow, it's a great it's a great one. You know, I think they're you know that you see the the chain happening in this new era of managers um in that there they're driving their artists. Probably is celebrities more than artists at times. Um And I do think that, you know, we we often remind them that even though they may be able to get a vodka line or sell some Instagram ads, longevity means you've got to have hits and you've got to apprentice yourself on that road and connect. Uh So I would say sometimes, you know, I was with a manager and we had a tour that wasn't selling well, and I said to what what are we gonna do? And and he said, well, you know, we're getting paid for privates and we're gonna launch a hot sauce because we have a lot of followers. And I thought, wow, Now, for thirty years, Bob, that answer would have been, you know, we're gonna get in the art we're gonna get in the studio, we've got a single coming, and we're gonna sell some tickets. Um So, I do think that, you know, over night, now if you have twenty million followers, you can sell some Instagram ads and make a living. Um So, I think that they have to watch that fine line between driving their brand monetizing their brand. But ultimately, if they're gonna play long, they've still got to put those hits. They've got to have the playlist, and they've got to be be able to connect on stage and sell arenas. I mean, i'd always tell that artist, sell the arena, sell the amphitheater. If you can sell the stadium, then start the monetization because you'll never you'll never get that chance to get that run and build that business. But once you stand on stage as a stadium act and get that rarefied air, the next the next thirty or forty years are set. But you've got to get there. That you're you're you're defined as an artist on what you do on stage, and if you can get to that rarefied stadium, even that sell outs arena business, you become an artist of a different caliber and then you're probably going to be able to have a career, even if it's a diminishing career of casinos and fairs eventually, but the more people you can perform to and really live is where you make fans on on on you know, on Spotify is where you you sell some some streams, but but you you you cement long term fans when they see you live. Um. And the more you do that and you put all that hard work in and go global and go play some festivals, solidify that fan base and then and then the monetization will come. Versus you get monetize it too fast and early, that artist isn't gonna want to get on that plane and go all the way to Belgium to play that festival, or build that build that road show. So you know I'm biased because I live and live, but we've seen it over and over. If you build a live audience, you build a fan base live. That magic that you make with that fan in that field or in that stadium or that festival carries your brand for long time. And what is the status of Live Nations management company? Is that a future business? When we see that fade away sold off? No, No, we we like we like it um Um. You know, it started organically, so it's not it's not meant to be uh, anything more than than the obvious. We started with jay Z and rock Nation and it was our kind of our first shot at being in business with an artist and a manager company. Um. And then we've expanded slowly over time. Obviously, what Irvan was was here for a bit and gone and we have our seventeen management companies. Now we'd be investors in UM. I love that division Artist Nation. UH. It's great to be that connected to the artist and the manager to see the world from their view here what's going on from the record deals to the uh to to the madness and and and selling off their records and publishing rights and and obviously it helps drive our core business. Is if if you're if you're building those relationships, it does it does ultimately get you to win a few jump balls, um when you're battling for the tour. So we just you know, concluded a deal recently. Well we'll keep building that division. UM. We think it's a good adjacent business to our core business, high margin compared to uh, the concert business. So we like it, okay. And what's the status of festivals both domestically and worldwide? What do we know? There were a few then there were too many where we at now you know, there's a I think a little bit of a shakeout happened. Probably obviously COVID did did help. We've we even struck out a few. I think we I think we shut down twelve that weren't working that we didn't love over over our festival portfolio. Um So, I I think you're seeing the bars getting higher, which is um to kind of make make a successful festival work. Um So, if you're lucky enough to be in space like Lalla Palooza is, or Coachella or Bonnaroo or a c l um where you seem to be passage of right in in that consumer space, they're fabulous businesses. I mean, Lola Palooza is. You know, I can't take any of the credit. It was everyone else. But you know what a brand they built that we're now sitting in all of these festivals in South America, over in Europe. It's through traveling festival brand that that's worked well. So festivals are still you know, consumers love them to death on a global basis. We have a couple hundred of them and I love them still, whether they're boutique ideas like we're doing in England too big ideas. Um I think there's still vibrant, still lots of landscape. I think you know, you and I've talked about it. I think I don't. I don't think all of a sudden you can just launch a mainline festival with you know, three different genres of music over the weekend and expect a hundred thousand anymore. I think they become like any industry. They went out wide, then they the big ones survived, and then the niche one started to create their own space. So we see it happening now, a niche idea in a good location against a certain genre of music or a certain theme. Look look at Eddie's festival we're doing in uh Down near San Diego on the ocean, a real beach theme, and of UM sold out obviously through COVID, sold out. But so I like the I like the super served ideas where they're hitting a certain target, certain location um, and they're less They're almost less talent reliant because they have more of a thematic and soul to them, and those ones tend to work, and the band is the compliment to the theme, not just a bad line or typically we have a good lineup with a bad name and we think it's a festival, but it's not. It's got no soul, no no, no, no real reason for existing other than the lineup. So I think those are gone. We don't green light many of those anymore. If you've had a good idea or a great location. Uh, those seem to be working well. Okay, if you use Elton John's song, I'm still standing. You look at your tenure at Live Nation. There are a lot of people in power that are no longer there. You have remained. What makes you successful both from the beginning and now you personally. Oh jeez, I know you have to kind of my therapy session on Thursdays to dig into that one as we're as we're strying to solve that. You know, I don't know, none of us can understand what are superhuman power is. But uh um, you know, I think I got lucky early in life that I really really loved live entertainment and I found a passion early. So I do think that's been part of the success, right because from my early days this was what I wanted to do. So I was very focused, been very focused on building this kind of business in this space. Um uh. And I do think that's the real reason I'm successful. I didn't want to run a record label, I didn't want to run anything else, but I wanted to build a live concert company. And I think my focus and a little bit of my Thunderbay Warrior in me Um. And that grit added together with that complete focused agenda is how we ended up kind of staying on course here. Most people that I was battling with the most things I've been through, they didn't have the obsessive focus I had on a live event business. I mean, they might have wanted to be in business, they might have wanted a music's business, they might have other agendas. But you had to wake up early and go to bed late to beat me on this core business idea because this is this is what I think about nightly daily. Yeah, but knowing a little bit more than we've talked about here so far, going back to the top. You were working for Lobat. They had a company library. You literally read every book in the library. Yeah, you can say grip, but there's more of a dedication, more of an effort. Obviously an intelligence point too, that is really a key component. Yeah, you know, Um, maybe it's small town values. There's a little bit of Canadian and you when you when you grow up in Canada, um and you're you know, you're you're looking at ABC and CBS every day and looking at this big, big country called America, telling you how great they are you. You definitely don't grow up in Canada thinking that you have any of the answers. You don't think you're the smartest on the block. You think you have a lot to prove and a lot to learn. So I would say from from my insecure, small thunder Bay roots, um, you know, my obsession with learning and trying to outwork and outlearn the other guy still exists today. So I think that that tenacity of I'm going to work harder and because I'm not the smartest guy in the room, I better read and understand and and and and kind of figure out every angle to the the equation um to get this job done. So absolutely that that that burning desire to learn, observe, digest um has has stayed with me. I still don't think I've arrived. I don't think I got it figured out yet. I don't. I'm not resting on my laurels. So that tenacity to keep keep striving to be better having arrived yet has been I guess probably a good a good thing. Okay, in the live side of the business. Uh, it's not like the way they used to shuffle the decks at record companies, which they've done a little bit less of now, and there are lifers, you know, Louis Messina, you know a lot of other ones. How long do you plan to do this? You know, I would say what I love about the live business very different than the record business. Um. Now, the record business has not produced a lot of entrepreneurs overall. You know, there's been a few big winners, obviously Geffen and you know, Jimmy and Clive um. But generally they're they're they're like the movie studios. They work within an existing system. UM. I love the live business because it is filled with characters and entrepreneurs still to date. So I I do believe one of the strengths of Live Nation is we've just been continually able to reinvent ourselves because you know, the the innovator's dilemma is always how do you keep making your big company innovative? Well, you've got to keep injecting it with some of the craziest right, You've got to inject it with entrepreneurship. Um. And and every day we're waking up doing a new joint venture with the latest you know, um, festival hustler, entrepreneur, venue operator, promoter, My company is filled with them. We have hundreds of joint ventures. UM. So I do find that we've been able to although run a very big public company, uh the entrepreneurial flair and me still gets fed uh daily and I get the deal and live with some of the greatest entrepreneurs, the crazies, the fun the big thinkers. None of these guys in the entertainment space in theory have worked for a company. As you know, the messina is, the Focals, the Dennis Desmond's, the c three guys, the insomniac Pascals, the Ron Lafittes, all the managers. None of them think they work for me. They don't work for a company. We're a federation. So I do find that exhilarating. I wouldn't be able to work in a traditional business like lebat and others, where it was just kind of filled with a line workers. I do love the entrepreneurship that that the live business feeds um and reinvents itself and overnight there's a new entrepreneur. As you know, if he if he finds the right field with the right idea, he can be the next Paul Tollett. Right, So we're always on pursuit of kind of like America's got talent, we're always looking for new talent. Um. We read a fine your self by it and uh and I love being part of that and and um. So that's that's what finds it exciting. So it's it's far from a job to me. As you know, you've got lucky every now and then, find your passion, do it with great people, have success. I'll run this one as as long as it's still exciting and fun. Okay, thank you, Michael. This has been so great. Thanks for talking to our own audience. Really appreciate it. Thank you, Bob appreciated. Until next time. This is Bob Left Sense