Live Nation Entertainment, the music industry’s largest concert promoter, announced a series of cost-cutting measures on Monday, brought on by struggles from the ongoing COVID-19 pandemic, which has sidelined live music in the U.S. since last month. The company has opened up a new $120 million revolving credit-facility loan, CEO Michael Rapino will forgo the remainder of his $3 million salary, and other top executives are taking pay cuts up to 50 percent, according to a company filing to the Securities and Exchange Commission.
Live Nation has taken other cost-cutting measures as well, including hiring freezes, reduction in the use of contractors, rent renegotiations, furloughs, and reduction or elimination of other discretionary spending. Live Nation is targeting $500 million in savings for 2020 through the new measures. (Rapino’s $3 million salary isn’t his total compensation. In 2018, he made $11.5 million, with $8.4 million in bonuses, outside his salary, according to a corporate filing.)
More than 8,000 Live Nation shows had been impacted as a result of the pandemic, from mid-March to the end of last month, according to the company, with 15 million tickets sold. Of those, 7,000 shows were postponed rather than outright canceled, and 14 million tickets were sold for those dates, making up 90 percent of ticket sales for impacted shows. Five to 20 percent of fans had requested refunds for their tickets to the affected show dates. Live Nation has already issued refunds for the 1.6 million tickets for canceled shows.
“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,” Rapino said in a statement. “We will be ready to ramp back up quickly and once again connect audiences to artists at the concerts they are looking forward to.”
The pandemic has hit Live Nation harder than initially expected. On their quarterly earnings call in February, Live Nation president Joe Berchtold said the company didn’t foresee the virus heavily impacting the company; by mid-March, Live Nation, along with fellow promoter giant AEG, had announced they would suspend all artist touring until April. The same day, the two companies announced a task force with major booking agencies to protect the concert business amid the pandemic.
COVID-19 has shuttered the live and recorded music businesses alike. Major music festivals, including Coachella and Governors Ball, have been postponed or canceled, bands and music artists are stalling their tours, music streaming is down, and artists such as Lady Gaga are delaying album releases. Thousands of live-music workers are without steady income, and Live Nation committed $10 million to Crew Nation, a relief fund geared specifically toward live-show workers.