Live Nation Entertainment Inc (LYV) — Q2 2022 Earnings Call Transcript

Good afternoon. Thank you for joining us. The second quarter confirmed that the live entertainment industry is back globally and bigger than ever. Live Nation led this return and continues to deliver the best global network to support artists as they play shows for fans around the world. Every key operating metric is at an all-time high as we promoted more concerts, had more fans attend shows, spent more money, sold more tickets and enabled brands to connect with fans at a scale we have never seen before. As a result, relative to 2019, we saw over a 40% increase in revenue to $4.4 billion and a 50% increase in AOI to $480 million. With most of the world fully reopened, it’s clear that concerts remain a high priority for fans. Consumers are seeking out and spending more on experiences. The growing demand for live music and events is driving our business to record levels, far outpacing any macro issues or cost increases. Momentum across our business has remained strong in recent months and weeks, with demand combined with the substantial concert pipeline giving us confidence in our ongoing growth this year and into 2023. During the second quarter, we promoted over 12,000 concerts for 33.5 million fans, each up over 20% relative to the second quarter of 2019. Of the over 6 million additional fans this quarter, 5 million of that growth came from international markets, driven by the addition of OCESA and the reopening of most global markets with a particularly strong focus and demand through Europe and Latin America. Growth was broad-based with double-digit attendance increases at venues of all types, demonstrating strong demand for events at all sizes from large-scale stadiums and festivals to clubs and theaters. Even as show count and attendance grew, fans demonstrated their willingness to pay more for the best seats, with the average price of a ticket for our concerts this year up 10% globally relative to 2019, which remains less than U.S. inflation levels over the period. At the same time, our average entry price for concerts remains affordable at $33, up only 5% from 2019. With market-based pricing being widely adopted by most tours, we expect to shift over $500 million from the secondary market to artists this year, continuing to support those who created the concert and ensuring they benefit from it. On the venue side of our concert business, we continue to build our portfolio of operated venues with an active pipeline of almost 30 new venues across the globe. We are seeing the benefit of operating more venues as the number of fans who attended shows in our owned and operated venues during the quarter was up 13% to over 14 million fans, and we expect that figure to reach over 50 million for the full year. Fans are spending more on-site, with average per fan revenue up 20% at each of our amphitheaters, festivals, theaters, and clubs relative to 2019, with the average per fan revenue at our amphitheaters this year at $38.50, up 30% relative to 2019. Our ticket business also demonstrated strong growth in the quarter, with transacted fee-bearing ticket volume up 48% to 77 million tickets and transacted GTV up 76% to $7.3 billion, both relative to 2019. This is our highest fee-bearing GTV quarter ever, with April, May, and June accounting for three of our top five all-time fee-bearing months. Seventy-five percent of this growth came from concerts, another indicator of the high demand for live music. Along with the volume increase, transacted ticket prices globally were up approximately 15% for the first half of the year relative to 2019, as both concerts and sporting events saw similar low double-digit price increases during the period. Even with strong primary ticketing sales and increased pricing, demand for live events on our secondary ticketing marketplace remains high, and as a result, our GTV more than doubled for the quarter relative to 2019. We are continuing to see the benefits of our technology investments at Ticketmaster, including our global leadership in digital ticketing. With new capabilities and the sales effectiveness of our ticketing marketplace, we consistently deliver high ticket sales for our event organizers. As a result, we continue to win business from new and existing clients. In the first half of this year, we had 12.8 million net new fee-bearing tickets to our marketplace, led again this year by our international markets, which accounted for 60% of this new growth. Sponsorship has also benefited from the concert flywheel this quarter, driving 74% growth in revenue relative to 2019. We further enabled more brands to connect with an increasing number of fans on a global basis. Festival sponsorship has performed particularly well during the first half of the year, more than doubling from 2019, led by nine new festivals in our Mexico and Latin American businesses, which accounted for roughly half this increase, along with broad growth in sponsorship levels across most of the North American festivals. We are also adding more clients in technology, telecom, and purchase path integration, including Google, AWS, and Hulu, with these categories collectively more than doubling this sponsorship since 2019. As we look forward to the second half of 2022 and into 2023, we have sold over 100 million tickets for our concerts this year, more than we sold for the entire year 2019. Fan demand remained strong, resulting in continued growth in ticket buying and on-site spending. Given the long-term nature of most of our sponsorship partnerships, our planned sponsorship for the year is now fully committed. As we prepare for 2023, everywhere globally is open for concerts. We are actively routing all of our markets with the largest artist pipeline we have ever seen at this point in the year. For the 2023 tours we have put on sale so far, all signs continue to point to strong fan demand. With that, I will let Joe take you through more details of our results.

Thanks, Michael, and good afternoon, everyone. As with last quarter, we find 2019 to be the most relevant comparison for understanding our operations and key performance indicators, so we will mainly focus on Q2 of 2019. For the Company, our reported revenue of $4.4 billion for the quarter exceeded Q2 2019 by $1.3 billion, representing a 40% increase. On a constant currency basis, our revenue was $4.6 billion for the quarter, reflecting an approximate 4% impact from the strengthening of the U.S. dollar. Our reported AOI of $480 million for the quarter was $160 million higher than in 2019, a 50% increase driven by over $100 million improvement in ticketing and $80 million in sponsorship. On a constant currency basis, our Q2 AOI was $502 million. The negative foreign exchange impact of $23 million or 4% was mainly due to the devaluation of the euro and the pound. This quarter marked not only our highest Q2 AOI ever but also our highest quarterly AOI overall, surpassing our previous record quarter, which was Q3 of 2019, by 12%. This is notable considering Q3 is typically our strongest AOI quarter each year, and we converted nearly 80% of this AOI into adjusted free cash flow of $379 million. Let me provide some additional insight on each division before discussing the leading indicators for the full year. In concerts, our AOI was $123 million for the quarter, compared to $133 million in Q2 of 2019. It was one of the best second quarters for concerts, despite limited activity in the Asia Pacific region and rising operating costs. While OCESA had a robust return, its AOI was mainly driven by sponsorship and ticketing, as its concerts division bore most of the costs. In the quarter, we had over 33 million fans attending 12,500 events, which is a nearly 25% increase compared to Q2 of 2019, when 27 million fans attended 10,000 shows. We're still witnessing growth in on-site spending with no indications of a slowdown. I'll share our observations from this year by venue type across our owned or operated buildings. In our amphitheaters, ancillary per fan revenue has increased to $38.50, up by $9 per fan over 2019 levels or a 30% growth. At our theaters and clubs in the U.S., ancillary per fan revenue rose by over 25%, fueled by higher concession sales and increased purchases of premium packages and fast lane entry. In our U.K. theaters and clubs, ancillary per fan revenue increased by 20% compared to 2019, mainly due to increased food and beverage consumption and pricing optimization, along with the move towards cashless payments. Lastly, at our major festivals, higher spending on concessions and VIP experiences has led to a more than 30% rise in ancillary per fan revenue. The consistent theme is that as we enhance our hospitality operations and offer more premium options, fans are eager to improve their experience. We still see significant potential for growing these higher-quality experience offerings across our global portfolio, which now includes over 400 venues and festivals. Next, ticketing had another exceptional quarter, generating $231 million of AOI, making it the most profitable quarter ever for ticketing, surpassing the record set in the previous year’s fourth quarter and nearly doubling the Q2 2019 AOI of $124 million. This growth came from both primary and secondary ticketing, with transacted ticketing GTV increasing by 69% and 141%, respectively. Excluding refunds, we transacted 77 million tickets, our highest quarterly total ever, exceeding our previous record of 65 million tickets in Q4 2021 by 18%, and being 25 million tickets or 48% higher than Q2 of 2019. Excluding refunds, transacted ticketing GTV reached $7.3 billion, our highest quarterly figure, surpassing the prior record of $6.6 billion in Q4 2021 by 11% and up $3.1 billion or 76% over Q2 of 2019. International markets are now mostly back and contributing to this growth, with transacted ticketing GTV up 67% compared to Q2 2019. As Michael mentioned, about 75% of our growth stemmed from concerts, driven by increased fan attendance and the rescheduling of several on-sales that were expected in Q3 to Q2. Even as more ticket value is captured for content organizers, our secondary marketplaces continue to experience rapid growth, with four of our five best resale days occurring in Q2 and 12 of our top 20 resale days in 2022. We believe the secondary market is a key indicator for primary pricing opportunities in the coming years and also serves as a buffer against demand fluctuations. Finally, sponsorship had its best quarter ever, achieving $178 million in AOI, which is 80% higher than Q2 2019’s AOI of $98 million. With the full reopening of the U.S., U.K., and Mainland Europe, we saw significant growth in both on-site and online sponsorship, both reaching record Q2 AOI figures. The expansion of our large multiyear multi-asset sponsors highlights our value in connecting live music fans with global brands. We are approaching 100 major sponsors that collectively generate over $0.5 billion in revenue and account for nearly 75% of our growth relative to 2019. Looking ahead to the remainder of 2022, based on our leading indicators through late July relative to 2019, confirmed show bookings have increased by over 30%, supported by double-digit growth across all markets and venue types. Our concert ticket sales have surpassed 100 million tickets for events this year, up 38% and exceeding our full-year 2019 fan count. Therefore, we anticipate a strong Q3 for concerts with more shows and higher attendance, including growth at our owned or operated venues, where we continue to see robust increases in average per fan spend. Similar to last year, we are extending the amphitheater season later in the year, adding over 1 million fans in Q4 compared to 2019. Michael also noted that much of our Q2 fan growth was driven by international markets, which is an excellent indicator of the overall health of our global fan base. However, I want to caution against overestimating this for the U.S. market, as we expect North America to be the primary driver of our fan growth in Q3. Ticketing has sold 183 million primary fee-bearing tickets for events this year, a 30% increase, with 122 million tickets designated for concert events, which is 42% higher than in 2019. In addition, we hold $3.2 billion in event-related deferred revenue, doubling our level in Q2 2019. This largely consists of tickets sold by Ticketmaster for Live Nation concerts, though revenue and AOI have not yet been recognized and will be over the upcoming year as these events occur. We are on track for a robust Q3 in ticketing as our deferred revenue gets recognized, although this is also influenced by some on-sales shifting into Q2. On the sponsorship front, we expect continued growth driven by our strong Q3 festival lineup, which will also involve some on-site activation support. On the cost front, we continue to feel the impact primarily in the venues we operate—amphitheaters, theaters, clubs, and festivals. However, in all scenarios, we are achieving increased profitability per fan due to the uptick in ticket and ancillary revenue. A few other points for 2022: due to our presence in the U.K. and mainland Europe, we have been facing foreign exchange headwinds. Until the end of June, our AOI was negatively impacted by $23 million, primarily during the second quarter as the U.S. dollar gained strength against the euro and the British pound. Based on current exchange rates, we anticipate a continued 3% to 4% impact on our AOI in the second half. We provided updated guidance on line items affecting our EPS calculation last quarter, with one notable change being an expectation of persistent FX headwinds for the rest of the year, which at current forward rates translates to an approximate $15 million quarterly below-the-line expense from currency exchange losses related to our foreign balance sheet revaluation. Anticipating growth opportunities ahead, we expect 2022 capital expenditures to be about $375 million, with two-thirds directed toward revenue-generating projects. We project free cash flow conversion from AOI to approximate mid-50s for the entire year. We ended Q2 with $2.5 billion in available liquidity, combining free cash and untapped revolver capacity, providing us the flexibility to keep investing in growth. We are comfortable with our leverage, with over 85% of our debt at a fixed rate and an average debt cost of about 4.3%, which positions us well in this interest rate environment. Now, let me open the call for questions.

Michael, I wanted to get your thoughts on pricing in VIP tickets. We've seen artists and VIP inventory, even amid some fan pushback and negative press, which looks to me to be a break from prior years. So do you think the industry has collectively gotten to a place where artists are now comfortable reclaiming the secondary market economics? And then, how much more room is there to drive this process?

Thank you. For some time now, we've mentioned that we believe the secondary market, estimated to be worth between $10 billion and $12 billion globally, needs to start benefiting artists in some way. The pricing is too visible, and as artists work hard to create their shows, they notice the online prices. Many artists are realizing they'd prefer to capture some of that revenue up front. They don’t want to be sold out at $200 only for someone else to profit $2,000. Fans don’t really get a deal; they’re still spending $2,000 on resale. Artists are exploring how they can meet some of that demand upfront. Both artists and venues share the goal of filling every seat for the best experience rather than focusing solely on gross revenue. Currently, the portion of total growth coming from price premium and dynamic pricing is still minimal, around 1% to 2%, and it’s nearly absent outside the U.S. So, there’s significant potential for artists to consider premium and dynamic pricing strategies to better price their products, fill venues, lower back-end prices, and capture more at the front. We believe there are many years of opportunity for us to develop this on a global scale.

Okay. Great. And then I just wanted to ask on concert AOI in the quarter. I think it was roughly flat versus '19, and that's with the increase in fans and the per caps. Just wondering if you could speak to the impact of things like cost inflation, mix. I know you said APAC wasn't fully open and then maybe timing as well. I think Q2 '19, if I remember correctly, had some pull forward from Q3 in that year?

This is Joe. Yes, I'll take that. I think we identified several factors that were a combination of timing and one-time events that affected this quarter. The Asia Pacific region is not fully operational yet; we're setting up the organization to be ready. The structure of OCESA's profit and loss statement means that they generate their revenue primarily through ticketing and sponsorship, while most of their expenses come from concerts. We mentioned some increases in operating costs for our venues, which still maintain profitability on a per fan basis, but there are some costs involved. I wouldn't put too much emphasis on one quarter. For example, a lot of our growth was seen in international markets, whereas North America experienced slower growth this quarter. However, we anticipate significant growth in North America in Q3. Looking at the overall numbers, North America has seen a 30% growth with our 100 million tickets. Therefore, as we move into Q3, it is expected that some of that will shift. I just don't want to read too much into this.

I want to elaborate on David's question regarding platinum ticketing. Michael, could you explain how platinum ticketing functions, particularly who determines the prices and the schedule for ticket releases? How do you view the transition from immediate availability of all tickets at the on-sale to a gradual release over time? What is your perspective on balancing potential revenue and maximizing profits for artists with considerations of fandom and fairness, and what role do you see yourself playing in that?

All right. That's a lot. I'll try to take some pieces. We work for the artist as a B2B business. The artist determines when and how they tour. Our role is to provide all the tools, platforms, and services they need to succeed on their tour. Their decisions are strategic, as they have to balance the demands of their fans with supply, demand, and pricing. Some artists, like The Rolling Stones, excel at conveying their brand and delivering that experience. Artists are always trying to navigate how to make the show accessible for all fans while figuring out fair pricing versus potential earnings. They recognize that by keeping prices slightly higher—like 1% or 2%—they can improve their economics compared to scalpers, while still pricing the majority of tickets at a stable brand position. Historically, the industry has set three ticket prices: 140, 79, and 39, consistently across different cities and nights. Now, with advancements in dynamic smart pricing, bands are becoming more sophisticated and can learn how to price tickets better, reducing losses to secondary sales while still maintaining an overall ticket price. This allows them to balance consumer demand, their brand, and the financial leakage they've been experiencing.

Sorry, Brandon. I just want to respond to one comment. Your commentary about trickling out tickets isn’t a standard practice we do. The speed of ticketing has to do with how fast some of them sell out; if the artist prices a lot of tickets at market price, they may not sell out immediately. Ticketmaster takes all the tickets and puts them directly on sale, not trying to limit supply or anything in that manner. I just want to make sure we are clear about that.

Yes. No, I wasn't agreeing with that decision anyway.

Yes. I believe we are addressing marketplace concerns because consumers tend to get frustrated when there are many secondary tickets available at 10:00. In the past, a fan would find the tickets sold out by then and would have to go to the secondary market to buy a good seat. Currently, we are navigating that process to provide information to the fans. Our responsibility at Ticketmaster is to ensure that every sale is made directly and not directed into the secondary market, while also supplying all the data to the artists so they can adjust as needed.

Got it. And then talking about dynamic pricing, if there were to be some downturn in the next year or so that affected the live entertainment business, do you see the same tools providing the flexibility to respond to market conditions in bringing ticket prices down as much as you bring them up in this demand environment?

Sure. Controls can be used. Go ahead, Michael.

No. I mentioned it in our last call; we examined the previous recession where ticket sales dropped to single digits, but we didn’t have these tools at that time. Now, we analyze data pricing and dynamic pricing and incorporate market data algorithms to determine the optimal price point for sales. Given the current potential in the premium secondary market, we have the ability to adjust ticket prices up or down by 5% or 10% to align with inflation and supply/demand while still ensuring the venue sells out and adjusting prices if necessary.

The other part of the buffer, Brandon, is just the secondary market itself and how big it is. It's continued growth, right? The secondary market for us grew 140% this quarter, so that indicates that even if some pricing is going up on the primary side, the secondary is growing even faster in terms of volume and price points. So our first line of defense is keeping our eye on secondary and using that as a buffer if there are any variations in demand.

Got it. And then finally, if you could just double-click on the 30 additional venues that you're talking about adding. What venue types are those? And how impactful do you see that to be in the future?

In our investor conference, we wanted to emphasize that this has always been a robust business, but we've recently increased our focus on operational design. Over the past few years, we've added between 20 to 30 venues annually. Boston has been a remarkable success, and we currently have 30 venues in the pipeline, with an additional 75 planned globally. These venues range from clubs to arenas, catering to identified market gaps. We see significant opportunities. When we operate a venue, we benefit from sponsorship, ticketing, food and beverage, and all revenue streams, which contribute to our highest returns.

On fan growth for the year, maybe for Joe, I think you mentioned in your prepared remarks not to extrapolate international growth or contribution on the U.S. market this year. Can you unpack that for us a little bit and maybe touch on what portion of fan growth you expect will come from acquisitions versus organic growth in markets like the U.S. or the U.K. this year?

Sure. I'll use as the basis the 100-or-so million tickets that we sold through July because I think that gives the numbers and the facts. As I indicated, within that, the U.S. is up just over 30%, and international was up around 40%. So you have strong organic growth across both North America and internationally. Our primary acquisition, of course, would be OCESA, which would account for somewhat less than half of the international growth. The international growth, even without acquisitions, would be in the mid- to high 20s. This is not acquisition-dependent growth; it is organic plus acquisition.

Great. That's helpful. And then maybe one for Michael. I was curious if you're seeing any unique trends develop in terms of fan behavior this year. For example, we've seen more first-time concert-goers come out this year or fans set to attend events with greater frequency. Any data points or trends that you’re seeing, opening portions of the market up going forward that maybe you haven't seen come into the industry before?

Yes, I’ll take this. Michael is having some audio problems here. What we're seeing is a broad-based, high priority for going to concerts from fans interested in attending. We certainly have people who haven’t gone to concerts in a long time. We have fans who are now going to one concert, now attending two. We have people going to many. It’s not that you can pull it apart as one factor; you’re seeing a return to shows and a broad pattern on site.

Concert ticket prices. I want to go back to that being up 10% year-over-year versus 2019. Joe, can you break out how much of this increase is being driven by market pricing versus ticket price increases at the on-sale?

Yes. As Michael said, the dynamically priced tickets represent a very small percentage of the overall tickets. So it’s not going to be felt by most people. I would guess that less than half of the impact comes from that. The entry price of $33 represents a 5% increase from 2019, which can be used as a proxy for overall ticket pricing. The remainder may be driven by more front-of-house activity. Because there's a lot of attention on how much overall ticket prices are up, if you look at the U.S. market, it’s up between 12% and 13% in terms of inflation over the past three years.

I wanted to get a little more color on international markets and the international landscape. If we are seeing a lot of strong demand, is it relatively even across international markets relative to the U.S., or are there any markets that are stronger or weaker?

Yes, we're seeing no difference right now in demand across the globe. You could look at Springsteen, who just went on sale last week; global stadiums across Europe sold out as fast as here, similar to Post Malone and Kendrick. The tours that sold here sold just as fast in our international markets. Latin America, specifically Mexico, continues to see completely record demand. We're also still seeing strong walk-up at festivals and on-site as of last weekend. So that's our current data. There has been no pullback yet in Europe or any international market.

Great. Am I allowed to follow up, or would you prefer I went back in the queue?

Go ahead.

Okay. With respect to digital initiatives around ticketing, could you talk about sort of — it’s obviously exciting and productive, kind of what inning you’d say we're in, and any observations surprising or otherwise so far?

Yes, we're still in the early stages. This is the first summer where we are implementing our data and technology on a larger scale, which allows us to engage fans after they purchase tickets, offering upsells to those attending events at our venues and connecting them with sponsors. We've observed significant growth in our upsell rates, as we note our average spending per fan has increased, especially at our amphitheaters with more premium parking options, enhanced entry experiences, and VIP clubs. Our ability to effectively reach fans through our platform has contributed to this success, rather than relying solely on them to navigate everything on the night of the event. We're pleased with the progress we've made so far.

With Asia Pacific still limited this quarter, could you talk a bit more about how quickly that ramps from here? And maybe a bit more on the long-term opportunity there, volume and the recent acquisitions in Thailand and the Philippines. I think there are plans in place to bring Lollapalooza to India next year. Any color on how that comes together and how large stuff could be would be great.

Yes, most of that, I think it was Asia referenced. We’re currently in 40 countries, with a hundred offices in 40 countries, retaining varying degrees of market share from the U.S. to Cape Town or South Africa. We've got a robust global platform, which has always been our first priority; so we can say to any artists that we can put you on the road in any market and make sponsorship happen. When we get to launch or build festivals and operate venues, ticketing, and sponsorship – we start to see the flywheel work. Latin America was significantly undeveloped in all markets; now with OCESA, we’ve got the flywheel actively working in Mexico. We bought festivals in Latin America with Rockland Rio and are bringing Lollapalooza, while acquiring a couple of promoters will enable venues. The flywheel is starting to kick off in Brazil, Colombia, and Argentina. We can go from zero market share to big opportunities. Western Europe still contains some markets where we remain undeveloped, such as Portugal or Spain, and you’ll see us continually adding festivals or promoters or venues in these markets. In Asia, we have a sturdy business presence in Australia and New Zealand. Still, as we move up to the Pacific Rim, we're truly starting to establish the flywheel in those markets. Japan is the most developed; we need to do more work in that area. We view Asia as an underdeveloped territory with low market share but huge opportunities moving forward. Like everyone, we see Asia, Latin America, and the Middle East, and Eastern Europe as areas where we lack real market share. However, that consumer now on TikTok knows that Drake dropped the video last night, whether they are in Singapore, India, or Cape Town. We have a global product and lots of opportunities to keep growing.

Recognizing that we cannot change the weather or natural conditions, and considering the seasonal nature of events, there seems to be a pattern among concertgoers. People are attending multiple concerts, similar to how blockbuster movies attract repeat viewings. Do you believe that the initiatives you are pursuing will impact the seasonal trends in your business? Specifically, do you think Q4 might become more active compared to historical data, especially when excluding weather-related concerns?

Yes, this is Joe. I gave you some numbers that in our amphitheaters, we expect to have about 1 million more fans attending shows than we had in 2019. So we're certainly seeing an extension of the amphitheater outdoor season, particularly through the more southern states. Theaters and clubs have always been active in Q4. Arenas tend not to be as big, just because it gets inhibited by more of the holidays. We will see a bit of that impact but not dramatically.

We view our business as global. In the U.S., arenas for the NBA, NHL, and NFL are busy from fall to winter. We can take many of these artists and direct them to Asia Pacific and Latin America, allowing us to generate a year-round business globally. The industry has concentrated too much on the U.S. and Western Europe's summer markets. As we expand in these various markets, we can host successful sold-out shows while we wait for the summer business here.

Michael and Joe, congrats on the quarter. I want to ask, given the strong demand we're seeing across the board here and what I presume is some overflow in demand that's unable to get a seat. Where does streaming fit into the medium-term strategy now? I know it was more a focal point during the pandemic, but do you see opportunity for sponsorship or advertising through that? How much incremental focus will there be on that going forward, or are you walking back from that a bit? Help us think about monetization there, or investment if it's still a strategic point for you.

I think we were clearing things a bit. We were not moved by the thesis that might have been for a moment that live is duplicated and digital. We've always maintained that this two-hour experience cannot be duplicated physically. We cherish the opportunity provided by streaming as a unique space, noting it cannot be duplicated. We've always held shows, the most accessible viewing brings in a dedicated fan, but now you can also expand that show; there's an audience eager to watch their favorite artist over the weekend. We had an incredible broadcast on Hulu for today's high-quality filming and live broadcasting during our festival, which was fabulous. So, we’ve always thought that the screen is an extension. It’s beneficial for our sponsorship business, where we have 900 sponsors eager to be a part of the show, both on and off the stage. Therefore, we appreciate streaming and believe it is a valuable additional service we provide to the artist, festival, and sponsor, and it’s a necessary component of our overall strategy.

Thank you, everybody. Have a great summer, and we'll talk in the fall.