Live Nation announced Monday that it has raised a $120 million loan and instituted cost cutting measures amid the postponement of many concerts and events during the coronavirus pandemic.
CEO Michael Rapino will also forgo his salary of $3 million, and other executives will take a 50% pay cut as part of the cost-cutting measures. With these measures, the company now has a total liquidity position of $3.8 billion.
“The live entertainment industry has delivered incredible global growth for over 20 years, which speaks to the great passion and resilience of fan demand,” Rapino, president and CEO of Live Nation Entertainment, said in a statement. “With this additional liquidity, the flexibility in our debt covenants, and cost-cutting efforts, we believe that Live Nation has the financial strength to weather this difficult time. We will be ready to ramp back up quickly and once again connect audiences to artists at the concerts they are looking forward to.”
Some of the other measures Live Nation will be taking include hiring freezes, fewer contractors hired, rent re-negotiations, furloughs and eliminating or reducing spending on travel, entertainment, repairs, maintenance and marketing.
The live-entertainment industry stands to lose as much as $9 billion in the worst case scenario, according to projections by the trade publication Pollstar that originally pegged the earnings for the year on ticket sales alone to be at $12.2 million after the first quarter results.
Live Nation, which is the country’s largest live-entertainment company, said that 8,000 ticketed events were either postponed or canceled due to the coronavirus starting in mid-March, and that 15 million tickets were sold for these shows. Approximately 90% of those tickets were merely postponed, but another 1,000 shows and 1.6 million tickets were canceled and refunded to buyers.
Live Nation also says that for venues that offered refunds for postponed events, between 5-20% of ticket buyers elected to take refunds while the rest chose to hang onto their tickets.
“Based on these trends, as well as an analysis of scenarios where refund rates increase above 20%, the company does not expect material declines in its event-related deferred revenue balances given the geographic diversity of the funds, the large portion of funds held by venues, and ongoing ticket sales for events in late 2020 and 2021,” the company said in a statement.