Live Nation Entertainment Inc (LYV) — Q3 2022 Earnings Call Transcript

Good afternoon and thank you for joining us. Live Nation delivered the biggest summer concert season in history that drove a record quarter. These results demonstrate the ongoing and increasing demand for live events globally, with attendance at events of all sizes from clubs to stadiums. Fans around the world continue prioritizing their spend on live events, particularly concerts. Despite varying economic headwinds, including inflation, we have not seen any pullback in demand as on-sales, on-site spending, advertising, and all other operating metrics continue showing strong year-on-year growth. With this demand, revenue was up over 60% relative to 2019, with each division up at least 30%, and AOI up 45% to $621 million, with all divisions up at least 25%. As we expected, our performance this quarter was led by our concert business, which held 11,000 concerts to 44 million fans across 50 countries. As a result, we generated over $5 billion of revenue and $281 million AOI for the quarter, up 67% and 44% respectively relative to 2019 Q3. Shows of all types continue having strong demand with double-digit attendance growth across all venue types, including clubs, theaters, amphitheaters, arenas, stadiums, and festivals. Stadiums had a particularly strong quarter with fan count more than tripling to nearly 9 million fans driven by the global demand of the top acts across a number of genres and audiences such as Bad Bunny, The Weeknd, and Red Hot Chili Peppers. We delivered double-digit attendance growth across established and emerging markets around the globe from North America to Europe to South America, showing our long runway of global growth. Our Venue Nation division hosted more fans with attendance up 14% relative to 2019 to $19 million for the quarter and 38 million fans year-to-date. Based on our current pacing, we expect to host more than 50 million fans at our Venue Nation and Festival division. As we have grown attendance, we have also continued driving greater market pricing for our concerts and now expect to transfer over $550 million of additional payments to artists this year, continuing our effort to help artists get the full value from their shows. Over the course of the summer, we continued to see strong onsite spend with no reduction in consumer buying habits. Ancillary per fan spending was up 20% to 30% year-to-date in our operated venues across the U.S. and Europe. The consistent theme is that fans are eager to enhance their experience, but we continue elevating our hospitality operations to provide more premium options. We still have tremendous room to expand these high-quality experiences throughout our venue portfolio, which includes over 400 venues and festivals globally, with almost 40 new venues in the pipeline. Fan demand for live events was also clear in our ticketing business. We transacted $6.7 billion of fee-generating GTV on 71 million tickets, up 69% and 42% respectively relative to 2019. This demand remained strong throughout the quarter as 2 of the 3 months were amongst the top 10 transacted GTV, excluding refund months ever. At this point, all top 10 months occurred within the past year. GTV growth was strong across both primary and secondary, up 61% and 132% respectively. Concerts accounted for 80% of the growth in primary GTV, while concerts and sports together accounted for over 90% of our secondary growth. Globally, new venue clients continue to seek out Ticketmaster’s service due to the effectiveness of our enterprise software platform, driving venue revenue, combined with our leading online marketplace. As a result, we contracted 19 million net new tickets so far this year on a global basis. At Ticketmaster, we continue to advocate for fee transparency and live event ticketing. We advocated for an all-in pricing mandate passed in New York early this year, which requires face value prices and fees to be shown upfront. We support the FTC mandating this nationally. We operate ticketing marketplaces in more than 30 countries around the world and have seen all-in pricing adopted successfully in many countries when mandated across the board. It works best when all ticketing marketplaces adhere together, allowing consumers to accurately compare as they shop for tickets. Sponsorship had its biggest quarter ever, following our previous record last quarter, driven by the strength of our festival and online partnerships. Our performance drove AOI of $226 million, 56% higher than 2019. Our sponsorship revenue growth has been broad-based with North America up 48% and international up 93%, and we see strong demand both on-site and online, up 64% and 63% respectively this year. Our unique theater live events platforms continue to attract new brands and expand relationships with current partners. Festival sponsorship has been our largest growth driver to date, as we have effectively leveraged record festival attendance this year and compounded this growth with double-digit increases in per fan sponsorship. Platform integrations have been a great growth driver with online partnerships as we continue to drive value and monetize opportunities via Ticketmaster’s purchase process with non-service fee revenues, up double-digits relative to 2019. Clearly, 2022 has been an incredible year of returning to live events, and we expect to finish strong. Ticket sales for concerts this year were up 34% for the quarter and now stand at 115 million tickets sold for shows this year, up 37%. More importantly, momentum is strong with early signs pointing to continued growth in 2023 across our businesses. Ticket sales for shows in 2023 are pacing even stronger than they were heading into 2022, up double-digits year-over-year, excluding sales from rescheduled shows. In our sponsorship business, confirmed commitments for 2023 are up 30% from this time last year, showing the resiliency and long-term commitments that brands have for our business. Beyond these specific leading indicators, going into 2023, we expect to drive growth in our concert business by adding more venues to our portfolio, continued increase in ancillary per fan revenue and furthering our efforts to deliver market value for the shows to the artists. In ticketing, we expect to also benefit from these market pricing trends while continuing to globally add new clients to our world-class platform. With that, I will turn it over to Joe.

Thanks, Michael, and good afternoon, everyone. As with last quarter, 2019 is the best comparison for us in terms of understanding our results. Most of our discussion will be relative to Q3 of 2019. For the company, our reported revenue of $6.2 billion for the quarter was $2.4 billion better than Q3 2019 or an increase of 63%. On a constant currency basis, our revenue was $6.4 billion for the quarter. There was roughly a 3% impact due to the strengthening of the U.S. dollar. This was a record quarter for revenue for the second quarter in a row and bested our Q2 figure by 39%. Our reported AOI of $621 million for the quarter was $194 million better than 2019, up 45% and led by an improvement of over $86 million in concerts and $81 million in sponsorship. On a constant currency basis, our Q3 AOI was $645 million. The FX impact of negative $24 million or 4% was largely driven by the devaluation of the euro and the pound. Year-to-date, we have converted roughly 76% of this AOI to adjusted free cash flow of $996 million. Let me give a bit more color on each division, then I will give you more on leading indicators. First, in concerts, our AOI was $281 million for the quarter, which compares to $194 million in Q3 of 2019, an improvement of 44%. U.S. concerts had the strongest quarter ever far surpassing the previous record of $200 million AOI in Q3 of 2018. It was a stellar summer season for concerts. We had over 44 million fans in the quarter, the most ever, growing 40% compared to Q3 of 2019 when we had close to 32 million fans. Looking a bit deeper at our fan metrics, stadium attendance more than tripled to 8.7 million fans in Q3 of this year and festival attendance was 6.5 million fans in the quarter, up nearly 40% from Q3 of 2019 with premier events, including Rock in Rio, Rock Werchter, Reading, and Lollapalooza. Pricing has been a key part of our strategy in 2022, capturing market pricing for the best tickets while maintaining an affordable entry point for all fans. For tickets sold to shows at our amphitheaters, arenas, and stadiums globally this year, front-of-house pricing increased for each by double digits relative to 2019, while starting prices for all shows in the U.S. rose just 6% and remain under $35 on average. Giving you more details on ancillary per fan revenue by venue type in our U.S. amphitheaters, ancillary per fan revenue was $38, an increase of $8 per fan over 2019 levels or close to 30% growth. At our major festivals globally, increased spending on concessions, camping, and VIP experiences drove ancillary per fan revenue up by nearly 30%. At our theaters and clubs in the U.S. and the UK, ancillary per fan revenue increased by over 20%, driven by higher concession sales, fast lane entry, night of show upgrades, and the move to cashless payments. On the cost side, as indicated before, increases continue to impact this primarily in the venues we operate, amphitheaters, theaters, clubs, and festivals. In all cases, we are delivering double-digit growth in profitability per fan due to increased ticket sales and ancillary revenue. Next, ticketing had another successful quarter, delivering $163 million in AOI, nearly 30% higher than Q3 of 2019. Q3 was our top quarter ever in terms of reported ticket sales in GTV and our second highest quarter ever in terms of transacted ticket sales in GTV, behind only Q2 of this year. When we look at the year-to-date performance of our ticketing business, the numbers reflect the incredible demand we have had. Through September 30, we have sold 197 million fee-bearing tickets, up 38 million tickets or 24% compared to 2019. GTV for the first 9 months is $19 billion, up $6.3 billion or 49% compared to 2019. As a result, revenues are close to $1.6 billion for the first 9 months of the year, which is up almost $500 million or 45% compared to 2019. With all this, we drove AOI to $600 million, up 71% as we deliver strong operating leverage. Across both sporting and concert events, ticket buyers continue to prioritize purchasing the best seats available, driving a 17% average price increase in the primary market year-to-date relative to 2019. Secondary pricing has risen by 10% on average with sales volume up as well. With these increases, the average secondary ticket price in the U.S. remains almost twice that of a primary ticket, demonstrating additional opportunities for market-based pricing as well as a large buffer from any demand shifts. For those of you focused on margins, as we have indicated previously, it’s difficult to evaluate based on a single quarter. Q3 margins were impacted by our mix of clients and shows, along with technology investments. All of this is as expected and in line with our full year margin expectations in the high 30s, as we have been indicating over the past few quarters. Finally, growth in our high-margin sponsorship business continued this quarter, with revenue up 59% relative to Q3 2019 and now up 64% year-to-date. We once again had high growth in both onsite and online sponsorship, driving record Q3 AOI of $226 million, 56% higher than our Q3 2019 AOI. Looking back at sponsorship’s growth through the first 9 months, we have seen our festival business nearly double and our platform integrations more than double. Our strategic multiyear, multi-asset sponsors now generate $0.75 billion in revenue for us. Back in 2017, we had 56 such clients, representing approximately two-thirds of our total sponsorship revenue. Today, that number has grown to over 100 such partners that account for 80% of our revenue, growth in both the number of partners and the level of their spend, which demonstrates the value we deliver and the importance they place on our unique on-site and online scale platforms. As we look to the remainder of 2022, starting with our leading indicators through late October, all relative to 2019, concert ticket sales are over 115 million for events this year, up 37% and 20% higher than our full-year 2019 fan count. Second, Ticketing has sold over 200 million primary fee-bearing tickets for events this year, up 27% relative to 2019 at this point. Of these, 135 million tickets are for concert events, which is 38% higher than 2019. Related to this, we had $1.9 billion in event-related deferred revenue, consistent with our levels in Q3 of 2021, despite the deferred shows in last year’s numbers. Excluding the deferred shows from last year’s numbers, we would be up 35% year-on-year. A few other points on 2022, given our presence in the UK and mainland Europe, we have experienced FX headwinds. Through the end of September, our AOI has been negatively impacted by $47 million. This was almost entirely in the second and third quarters as the U.S. dollar strengthened significantly against the euro and British pound. Based on current forward rates, we expect a 4% impact to AOI in the final quarter of this year. Due to some delays in construction projects as a result of supply chain disruptions, our 2022 capital expenditures forecast is now approximately $300 million, with roughly two-thirds allocated to revenue-generating projects. We expect that the key revenue-generating projects, which are delayed, will still be completed early next year, so we don’t anticipate any impact next year on the return from these projects. We expect free cash flow conversion from AOI to be in the mid to high 50s for the full year. We ended Q3 with $2.6 billion of available liquidity between free cash and untapped revolver capacity, giving us sufficient flexibility to continue investing in growth. We are comfortable with our leverage with over 85% of our debt at a fixed rate, and our average cost of debt is roughly 4.5%, positioning us well in this interest rate environment. In addition, the majority of our debt is long dated, with only our 2023 convertible debt maturing within the next 2 years. We will continue to optimize our capital structure based on market conditions. With that, let me open the call for questions.

Hey, everyone. At this point, most investor focus is on 2023. So I wanted to dig a little more there. And I know it’s hard to determine the demand side for the full year. But can you speak maybe quantitatively and qualitatively about the supply side for next year? I think last year, you gave that kind of top touring acts for the year ahead and what that looked like year-over-year. How is that trending? And then what’s your view on the quality of the supply next year versus this current year?

I’ll start on the quality. We’re seeing a really good pipeline for next year. I would say there would be no difference in ‘23 to ‘22 in terms of quality. If you were a stadium act, a large selling arena act, you probably debated whether you went out in ‘22 or you went out in ‘23. So, lots of great artists in the pipeline from clubs to stadiums to arenas. It will look like a similar year in terms of quality.

Yes, and just a few other specifics. As Michael said, our sales for next year are up double digits. I mean if you want to take these three so-called quality references, we’re most up in stadiums which, by their definition are going to be the largest artists that can sell the most tickets. So that would indicate we are off to a good quality start. The other is if we look at tickets sold per show that we have on sale for next year from amphitheaters, arenas, stadiums, festivals in all cases, our tickets sold at the on-sales are up relative to what they were at this point last year for 2022 shows. So I think those are all good indicators of both the breadth and the depth of the supply that’s going out.

Great. And then keeping on ‘23, you said your book sponsorship is, I think, up 30% year-over-year. And that’s kind of a different story than we’re hearing across the ad and sponsorship universe. Have you seen any recent slowdown there? And why generally do you think your trends in Sponsorship are different than what we’re seeing?

No. We haven’t seen any slowdown. I think it’s different pools of money from strategy. The Sponsorship relationships with us are not decided week-to-week, month-to-month based on what they are trying to get out of performance marketing. These are long-term commitments by major brands. Michael gave you the stats. It’s really being driven by these big multiyear, multi-asset, multimillion-dollar relationships. So we’re up 30% with over half our book of business for next year already filled and not seeing a slowdown. So we’re feeling very comfortable with it.

Brandon, for comparison, if the NFL was a public company or NBA, I’m sure that would be reporting record sponsorship also. So we kind of put ourselves off from that league, right? There’s not having any pullback. If you’ve got a scarce commodity like a big stadium tour or an NFL game, those are still very rare pieces of business that you want to be associated with, and they have longevity to them. So we haven’t seen any slowdown talking to the NBA and NFL. We haven’t seen it over there either. So I think those are the comparables for you.

Okay. And then just finally, on the regulatory front, there is noise, as kind of there always is. What would – I know you went on the offensive on the Ticketing transparency, but what would be the fallout if there are changes to that law for you? And is there any other potential pressure, regulatory pressure that you’re seeing or otherwise contending with right now?

Yes. We don’t believe there will be any impact whatsoever if there was a nationwide mandate for all-in pricing. We think it makes sense. It just has to be done collectively at the same time. If you look back and you listen to the comments, the comments were all about transparency, which is really all-in pricing. The commentary was not about fee levels or any of the other issues that some people have brought up. That’s been looked at, and we feel comfortable with what our business model is in that regard. So I think that we will work with the FTC. We will work with the DA in the State of New York, and we’re very supportive of that and some other shifts to make ticketing more transparent and a better consumer experience.

Just a couple of points to jump on; we tend to do better as regulation comes into play in this space. A lot of our business has been chasing the secondary business for years that’s kind of unregulated. We would love spec selling to be outlawed. We’d love better rules on bot ticketing. We love all-in pricing. We’re adhering to all-in pricing in New York right now. I think we’re probably the only ticketing company actually adhering to those regulations right now. So we like sunlight coming to the business. Most of the business has been unregulated and most of the noise is generated from the secondary business. So we love regulation; it puts us on equal footing ground. Right now, in our secondary business, we don’t do spec selling. That’s probably 30% to 40% of what inventory sits on secondary sites. We don’t price below face value. So we actually operate at a disadvantage right now because we are operating in a higher standard. A lot more transparency would be good; we’d love to have the fees more transparent upfront, all-in pricing. We just have to make sure everybody plays by the same rules, but we’re going to lead those pieces. As far as the fees, just to remind you, it’s the venues that set the fee and take most of the fees. I think if you build a multi-hundred-million arena or a stadium, I think it’s your prerogative to decide the fee you want to charge on your sports and music tickets. We get a piece of that, but those are set by the venue and monetized by the venue. So just some ongoing transparencies of the business, we’ve got to do a better job explaining.

Great. Thank you.

Thanks. Maybe I’ll flip Brandon’s first question around and push on the demand side. But you’ve been able to maintain AOI growth in a low double-digit range over a long period. You’ve done that in markets even when fan attendance has been down. And I know you just spoke to the supply, but given that uncertain demand environment, how do you think about some of the other factors in your control on revenue or cost that can kind of keep you in that historical range?

I’m going to let Joe jump in, but I just want to make sure; don’t discount the supply side. That’s like talking to Disney and saying, if you only have Marvel movies, how is your demand going to be? It’s going to be great. Supply and content drive the demand. If you’ve got a lot of great supply, the demand is a little easier. I’m very proud that we work with the best artists in the world and have the best global platform for those artists and attractive to our platform. That’s what you have to make sure you first have. We have the blockbusters top to bottom; that’s going to drive the demand. Now Joe will take over in terms of explaining the demand strength we’ve seen so far.

Yes. Just to repeat the numbers, which are the mix of supply and demand. Our tickets sold for the shows that we have on sale for next year are up consistently across all venue types relative to a year ago. So the demand is absolutely coming for the supply that’s showing up. On a broader basis, you’re right; we’ve consistently grown our business low double-digit AOI. If you look at 2010 to 2019, we’ve consistently grown our business double-digit AOI. In 2011, we grew our business double-digit AOI while fan attendance was down. We do have a number of other levers. Michael spoke to those as part of his commentary. We’re continuing to grow our venue base. And fans that show in our venues are much more profitable than others. We continue to have increased on-site spend. We continue to have pricing as a lever, which drives through both our concerts business and our ticketing business, continuing to add global Ticketmaster clients. I’ve given you the numbers on Sponsorship, which we think continues to be a double-digit growth business into the future. So all of those levers on top of the supply-demand dynamic is what gives us confidence as we continue to look at our future growth potential.

And Joe, I just want to jump in on the demand in terms of how the demand is spread. There is a certain thesis as they like to get spread. Our demand is – overall concert ticket prices are still very affordable. The majority of tickets sold are between $50 to $75. Although we have a great premium business that attracts a high-end customer or someone that’s a rapid fan, our business is split from clubs to theaters to stadiums, and we’re seeing strong demand on all levels. Whether it’s a $19 ticket filling up the clubs or the premium at the stadiums and arenas. We believe we have something for everyone. It is a very accessible ticket even in a pullback time. We’re seeing that the demographic of our buyer is widespread and split across all sizes.

Yes, Michael, sorry, just to jump back in on you. Again, counter to some of the commentary that I’ve heard out there—we’re also—not dependent on acts that have been around for a long time. Look at our top artists we’ve had this year: Harry Styles, Dua Lipa, Billie Eilish, Bad Bunny, Morgan Wallen, The Weeknd, Olivia Rodrigo. These are all artists that are at the early stages of their career. Across, as Michael talked about, all genres, most of those are in arenas and stadiums. But these are tremendous talents that are just showing the breadth of supply we have in our business.

Okay. And then I had a question on online sponsorship, which is really strong in the quarter. How do we think about the driver of growth here in terms of brand or traffic increases on your website or apps versus actions which are more in your control, like the platform integration, as you mentioned? And then how much room is there to grow some of these sponsorships?

Yes. Our focus this year has obviously been on the latter of how do we create new assets on this Ticketmaster platform that can continue to drive the economics. As you improve your volume of tickets or improve your site visits, the math is just additional growth on top of that. We feel like we would view any other platform we own in its own way just a counterpart to the on-site. We have people’s attention through a period of time. We have them going through a purchase process. That is something that we can monetize. We saw great progress on the platform integrations, particularly around the checkout this year. We think there are earlier upstream opportunities. There are advertising dollars that can still be significant that we can drive from it. We are focused much more on how to use Ticketmaster as a platform to drive its own set of non-service fee revenue streams. We think that has a long runway.

Great. Thank you.

Hey. Great. Thank you. Maybe one for Michael on pricing; I was wondering if you could talk a little bit about some of the advice you’re giving to most artists with respect to pricing their concerts next year. Is your messaging more that maybe there is still some opportunity to take price, given the strong demand you are seeing this year, or is maybe at ‘23 a year where artists need to be a little more focused on selling out rather than taking price?

Yes. I wouldn’t say ‘23—our conversation is any different than it’s been in any year. We have an incredible pricing team, a lot of data scientists that are talking and analyzing the business with our managers and agents. There is no one paintbrush; it depends on what artists—where you are in your cycle and what your demand is. I just saw some counts this morning for a big, big artist going up for sale. So, you are not worried about pricing if you’re talking to an iconic artist. If you’re a younger artist going on tour next year, you have a younger demo; you are building your audience; maximizing your growth is your priority. It’s getting to as many markets and fans as you can. I wouldn’t say ‘23 is in my buyers’ minds right now. What is in their head is pricing dynamics from day one in the market. Price is different on a Friday than a Tuesday; the aisle seat is worth more than the middle. The front is always underpriced. We haven’t seen any issues with demand yet from inflation or ‘23 pressures that are changing strategies.

Got it. That’s helpful. And then perhaps somewhat related to that, secondary GTV grew more than twice as fast as primary GTV in the third quarter. Could you just comment on some of the key factors driving that outsized growth in secondary? And is this something you think you can continue in light of the pricing strategy you outlined?

Yes. I think as Michael will talk to you, our strategy is to help artists get paid market value for their show. We are spending more and more on having the people and the data to help them do that. For various reasons, they want to build their fan base. They are leaving money on the table. We continue to see insatiable demand in the secondary market. The average price of a secondary ticket is still almost twice that of a primary ticket. So, that continues to grow, and we continue to price a little, trying to catch up to that. We don’t see the secondary market going away anytime soon, and we are going to be active participants. As we improve the Ticketmaster app, you can manage your tickets, buy and sell them on our secondary platform. As all of that gets easier, I think that just naturally continues to build the business.

Great. Thank you.

Hi. Thanks for the question. Michael and Joe, can you maybe just update us on—and I know you spoke earlier about the regulatory risk and concerns around FTC regulation and all-in pricing. But I think there are also investor concerns around the DoJ still. Can you maybe also touch on the competition of primary ticketing market in the U.S.?

As regards to the consent decree, we have an ongoing discussion. We have an external monitor who we have regular dialogue with. We have an internal monitor who oversees everything. We are very happy that we have got an active dialogue now, which is what was lacking in the first 10 years post our merger. We feel good about all of those discussions. I don’t think there is anything structural, substantive that we are finding that’s inconsistent with the message we send all our people; these are independent decisions on promotion and ticketing and the two shouldn’t be tied together. We feel good about that process that we have with them. Looking at Ticketmaster, it’s continuing to be successful because it’s a very effective platform. Because of our continual improvement in high-quality platform, both for the enterprise side and the customer side, that’s differentiated and driving a lot of our wins internationally. North America, where it’s a more mature market, you need to compete on price in addition to features. Our business has shown that we can continue to scale, grow, and do so profitably.

Thanks Joe. And I just have one more follow-up here. Industry publications have reported a trend of tickets for top-tier acts seeing strong demand and then the lesser-known and emerging artists struggling. I know you had some commentary today where that wasn’t the case. But as you look out over the next 12 months or so, do you see that potentially impacting your business or a trend? Could you just talk about both of those segments of artists in a recessionary environment?

Yes. Just on a macro level, overall we don’t win—most shows don’t sell out. The majority of your shows don’t sell out; there is always room for a few more tickets to be sold. So, although the press often talks about the expensive tickets or sold-out ticket, that’s not your real business. Your real business is night and day, theater, clubs, amphitheaters, arenas, selling those tickets night by night. Most tours ultimately do well, artists make money, and we make money. There are some tours—a small percentage—that just don’t sell enough tickets, the demand isn’t there, and those tours get canceled or the artist and promoter lose money. I’ve seen publications grab a few tours that didn’t make money and try to extrapolate something larger. I don’t see that trend. We did over 8,000 club shows last year; 95% are going to make money and do well, and the artists will deliver those 400 tickets or 1,100 tickets as they build their business. This year was tougher for all of the industry due to supply chain challenges and labor; costs were up. But those seem to have worked through the system. I don’t see any trends suggesting that emerging or younger artists are having a harder time than any young emerging artists when they take those risks building their businesses. Generally, most will be okay in terms of selling enough tickets, paying the bills, and building their business. We don’t see new trends at the bottom end suggesting that the club and emerging artist space isn’t growing. There are more clubs opening up all the time, lots of demand in every market, and lots of options for artists to play 500 seats, 1,000 seats. We know from our venue portfolio that demand to open up and build theaters and clubs is bigger than ever. That demand wouldn’t be driven if the supply wasn’t there.

Thank you, Michael. Appreciate it.

Hi. Thanks for taking the question. First on Taylor Swift, I just want to say with my 16-year-old daughter and I are signed up for the pre-sale, we very much appreciate your support on the 15th of the month. Moving on, in the press release, you highlighted that growth in your concert business in ‘23 will come from adding more venues to your operating portfolio and increasing ancillary per fan revenue. We didn’t see any mention of fan growth. Given all the talk about robust first half of ‘23 and the fact that booking cycles for big venues are six months to nine months out, I would love to understand how much visibility the company has into the second half of the year. Second, as strong as your fan growth has been this year, does this change how aggressively you might go out and invest in new venues, possibly larger ones, even outside of the country?

So, just technically, Peter, just to answer your first question, I think the way we have laid out the story in the release, and then Michael talked about it, is that ticket sales are up. He talked about sponsorship growth. He then said, in addition to those, there are a number of other levers that we have to continue to grow the business. I don’t think he ever said anything that indicated we weren’t growing the fan base. Looking at ‘23, we have some of the stadiums we talked about high growth in arenas. Some of that’s booked. It’s still somewhat early for the second half of the year. But from our macro pipeline for next year, it accounts for more fans than we had going into this year. The hard part is sorting out the shows that were rescheduled; it’s tough to determine how many of those were flown into this year versus not. But we feel good about attendance levels for next year. Michael will talk about the venues.

Yes. I think just on Joe’s point, we are excited to be sitting here. We knew the thesis that you could sell on that there was an air pocket; there was a lot of concern about ‘23 being an exceptional year. ‘22 has been an exceptional year. The idea that we were able to grow this business for so long in the high to low double digits for our fan base and then to have a year like ‘22 blow the doors off it and to be able to sit here and say we will still grow on top of that. We are very proud of our business and our outlook, given the headwinds and the gains we had this year. We are looking into how we keep growing the business moving forward. Venues, I have laid out over the last couple of years; we think it’s a great business. We have about 300 in our portfolio. It’s a great way to maximize a live event when you are vertical. We like our global pipeline we have right now. We are seeing a lot of white space where our content can help drive that business case from arenas to amphitheaters to big ballrooms and theaters. So, you will continually see us adding, as we have been over the last many years, to that portfolio.

Thanks for taking my question. In the past, you have talked about the evolution of digital ticketing. I know there was some commentary, I believe, on the spending to that end. An update on how that’s progressed, where it is, and what we might expect in the near-term and longer term would be helpful, please.

Yes. Digital ticketing at this point is nearly ubiquitous in North America. It has grown rapidly internationally and is still a year or two behind. I would expect this to be firmly established between next year to the year after, just depending by market. It’s already helped us in several areas. I mentioned secondary earlier. We are seeing some direct benefits as we continue to improve the ability for fans to manage their tickets. I think you will continue to see more products added to the app, and we’re set up for the advertising and upsells we’ve mentioned. We now have enough scale; we started doing some things this year at scale, working with sponsors who want to deliver value on-site to our fans, working with the concert side of the business to enable direct upsells. All those features coming from having a direct connection to the attendees will be a key focus for how we continue to drive our sponsorship business over the next few years.

And there is a sort of clear quantifiable earnings benefit where the rubber meets the road from that, correct?

Yes. I think part of that comes from our non-Ticketmaster, non-service fee revenue and the fact that’s up double digits from ‘19. This is all a part of that.

Understood. Thank you.

Thank you everyone. We will see you at our Investor Day in Liberty in November. You can check our website for more details. Thank you.