photo: Paweł Czerwiński
Live Nation has taken a number of steps to enhance its liquidity and ability to overcome the financial difficulties of the COVID-19 coronavirus pandemic, including securing an emergency $120 million loan, cutting costs, and, on the part of CEO Michael Rapino, foregoing a base salary altogether.
Live Nation described each of its COVID-19 coping strategies in a recent Securities and Exchange Commission (SEC) filing. As part of an amended credit agreement with an existing lender, Live Nation has gained $120 million in additional debt-spending capacity; if so obliged, Live Nation can boost the credit line to $150 million, provided that the process is initiated prior to May 9th.
Factoring for this new sum, the leading concert promotion giant has $940 million in available credit and roughly $1.84 billion in total liquid capital, after accounting for $914 million in free cash. This substantial liquidity may enable Live Nation to more easily weather COVID-19-related fiscal troubles and operational concerns, compared to other concert organizers.
It’s also worth noting that the company has $2 billion more on the books as deferred revenue (expected income for services or products that will be delivered in the future), but traditionally, these funds are considered assets only after the corresponding work is performed.
To help his company through the coronavirus pandemic, CEO Michael Rapino has temporarily ceased drawing his $3 million annual base salary (though historically, stock has comprised the lion’s share of CEO Rapino’s multimillion-dollar compensation).
Plus, other Live Nation execs have voluntarily halved their yearly earnings.
Finally, Live Nation indicated that it will explore cost-cutting measures, including rent renegotiations, hiring freezes, furloughs, and more. The company hasn’t yet made cuts to any of its approximately 9,000 employees in response to the coronavirus crisis.
Live Nation’s stock, traded under the symbol LYV, experienced a modest upsurge following the SEC filing. At the time of this writing, the company’s per-share price was hovering around $39.50, a roughly three percent increase from the previous close of $38.27.
Live Nation has postponed each of its upcoming concerts because of the coronavirus pandemic. Last week, we reported that the live industry sphere could experience losses of nearly $9 billion if shows are unable to resume in 2020. It all depends upon when event promoters are able to resume normal operations, a question that remains unanswered.
Early on in this thing, Rapino bulked up on the depressed Live Nation stock. He’s no saint.
Ain’t no law against that. What is illegal is dumping the stock knowing that it will tank soon.
Guess what? I bought Live Nation, Boeing, and nearly every airline stock at rock- bottom prices. I will not apologize when I cash out with a nice profit. Instead, I will thank the world for panicking and creating a perfect storm to pocket some retirement money.
It’s called ethics and he lacks them.
I have no idea if he is ethical or moral. But, the transaction you cite in support of that allegation is one done by millions of investors every day. It is capitalism and the free market at work.
Do a shred of research on the guy and you’ll see his ethics.
As for your stock purchases, you didn’t buy at rock bottom prices. Things will get worse for those stocks and stay down for a long while yet. What you’ve done is tie of your funds in a waiting game that most likely won’t pay off for a couple years, if at all.