I wonder has Live Nation boss Michael Rapino read Andrew Ross Sorkin's Too Big to Fail. The focus of Sorkin's book was the 2008 worldwide financial crisis and the collapse of banks and institutions, which many observers thought, as the title puts it, were too large to fall asunder. History tells us otherwise.
In the case of Rapino’s company, it increasingly appears as if almost every single entity in the music industry is becoming tied in some way, shape or form to Live Nation. It’s a company with an insatiable appetite for expansion and acquisition. Just last weekend, it took over well regarded Australian festivals Splendour In the Grass and Falls. Those festivals join such names as Lollapalooza, Bonnaroo, Austin City Limits, Reading/Leeds and others on the Live Nation festival list.
Music Business Worldwide did the sums and found that Live Nation has spent more than $113 million of their $8 billion turnover on acquisitions in the first nine months of 2016. Be it promoters in France or South Africa, ticket sellers in Athens or festivals in Canada, Rapino and Live Nation are prepared to flash the cash to do a deal.
“The company owns a dominant and/or strong global foothold in live concert promotion, ticketing (via Ticketmaster), secondary ticketing (via Seatwave and Get Me In!), venue ownership and artist management,” notes the MBW report.
Live Nation is also very much in the game in Ireland through venues such as the 3Arena and Bord Gais Energy Theatre, festival subsidiary Festival Republic, which runs the Electric Picnic, and MCD boss Denis Desmond, who is now the chairman of Live Nation in the UK. The company is also said to be keen to acquire more events in Ireland: it is understood that the company had been negotiating over the past six months to get involved in at least two Irish festivals.
While one of the words of 2016 is “bigly” thanks to the US president-elect, big does not always mean better. This is especially true if the company becomes over-reliant on any one area to the detriment of the other.
One of Live Nation’s biggest new earners is the secondary ticketing market, thanks to their ownership of the Get Me In and Seatwave websites. Live-music fans will know these sites as places to buy tickets for sold-out shows if they’re prepared to pay a mark-up in price. Live Nation shareholders, meanwhile, will know this as the sector which delivered a 34 per cent growth for the company in 2015 and $1.2 billion in cash.
In 2016, sites such as Get Me In and Seatwave have become a hugely contentious issue for consumers. Rarely a week goes by without another report about how sites like these are carrying on, complaints from bands and managers and suspicions over how the sites are sourcing tickets.
Last week for example, the UK Revenue and Customs authorities were asked to look at the tax affairs of the companies involved. It appears that the volume of ticket sales were not accurately reflected in company accounts or income reports. There’s no doubt from the published accounts that the secondary ticketing market is a lucrative revenue stream for Live Nation.
However, there will come a time – and it is approaching fast – when the pushback from fans, musicians and other parts of the industry about how these websites operate becomes too much to ignore. Just how Rapino and Live Nation choose to deal with this will have a huge bearing on the future of the company.
