Live Nation Sold Tickets to Austin City Limits Festival Knowing They Would Postpone

Selling tickets to an event you know will get postponed is an excellent way to get interest free loans on the backs of fans.

By David Icke Turner

Photo by Tomeg Bakinski

We have written about this so much it has begun to feel like we are picking on Live Nation. To be clear, we are punching up. This is a company that has come to dominate not only the touring industry but the music industry as a whole. Live Nation is a ruthless operator that achieved their monopoly by domination; not innovation. The story is a simple one: Live Nation is in a pickle. With no real understanding of when concerts will return, the entertainment behemoth is hemorrhaging massive amounts of capital every day that goes by. They have sold 800 million in debt futures, opened a $120 million revolving credit-facility loan, made massive staff cuts and hiring freezes, comprehensively cut artists guarantees, and even started a non-profit to pay their employees and vendors. CEO Michael Rapino made clear months ago that such events would not return until 2021. The continued selling of tickets to eager fans despite having a clear understanding that you would be postponing 2020 events is at best a disingenuous attempt to borrow interest free dollars from people who simply can not afford it. 

The fact that they have sold hundreds of millions of dollars to events they clearly know would not happen underscores the desperate position the company is in. The reality is that most major media companies have ignored the fact that Live Nation is disingenuously taking interest-free loans from fans for fear of losing the massive advertising revenue they spend. 

2 months ago, we had spoken with a dozen artist agents, stage vendors, alcohol distributors, and even one of their insurance providers and were told in no uncertain terms that there would be no event this year. Heck, NONE of the major underwriters are willing to even bind a policy for a major event right now. Naturally, all wished to remain anonymous for fear of losing the big money Live Nation brings to their table every year. Many of these companies are not sustainable without it. Not to mention that beefing with Live Nation not only means no advertising revenues, it means getting shut out of editorial opportunities for the massive swath of the concert industry they control. 

That is why you get Rolling Stone writing fluff pieces like this about ACL’s cancellation. They do not question why they sold tickets for months despite the same media outlet publishing this which demonstrates Live Nation knew they would be cancelling. Rolling Stone went as far as to say “Festivals and concerts won’t be a safe option until 90 percent of the population is immunized, which likely won’t happen until summer 2021.”  The agencies knew. The vendors knew. The major media outlets knew. What has happened with ACL is an identical rinse and repeat of what they so meticulously did with Bonnaroo. Take our article from one week ago about Bonnaroo cancelling, change out the names, and markedly multiply the revenues. 

“Live Nation knew they were cancelling Bonnaroo months ago. Everyone on the talent side of agencies knew this definitively. Live Nation knew there would likely be no festivals in 2020. For fuck’s sake, Live Nation CEO Michael Rapino announced 2 months ago that concerts would not be returning until mid to late 2021. So why the sudden sanctimonious statement and  cancellation? Ultimately, it all seems to be a ruse for Live Nation to get a massive interest free loan from the fans. You see, Live Nation is in trouble. The nation’s largest concert promoter has limited cash to weather what appears to be an indefinite pause in the industry. Their revenues are frozen, their stock value is wildly unstable, and they have an expensive empire to maintain. To remedy this, they have created a charitable non-profit to pay their employees & contractors wages, sold off 800 million in debt financing, cut artist fees for future contracts across the board, and have even gotten into bed with the Saudi Government — notorious human rights abusers. Nonetheless, the most desperate act they seem to be engaging is selling tickets to multiple festivals they damn well know are not going to happen. Now, the festivals are ostensibly offering refunds. Yet much like the rebate on cars and electronics, a large portion can not ask for a refund. Many fans bought their tickets from secondary sources, bought them cash, or no longer have access to the card which they purchased their ticket with. Live Nation is banking on this. Do the math: If Live Nation pre-sells 30,000 tickets to Bonnaroo, well below their daily capacity, at their GA price of $319 ( we will get to ticket fees shortly ) — that is a total take of just under 8 million dollars ($7,975,000.00). If only 25% of ticket holders get a refund, then they get to hold roughly 6 million dollars of fans ticket money until 2021. Shiiiit, they get to stuff it in an account and make interest off of the kids hard earned money. Now, 6 milly is not going to fix Live Nation’s desperate cash crunch. They have also sold well more than our estimates and have done so for two solid weekends of Bonnaroo. Not to mention campsites and merchandise. However, a policy across the board that sells tickets to events that won’t happen helps. Multiply the 6 million from Bonnaroo times an innumerable amount of concerts and festivals and you get the picture. “

It seems like anyone connected with Live Nation that relies on them for a paycheck is afraid to be named in any discussion. I get it. The live music industry is a small village and Live Nation is ISIL. Speak ill of them and you might get hurt. In an article from early May, we spoke with a Live Nation employee who described the desperate situation LN is in. She described the delayed postponement of concerts and festivals which they knew were not happening as both a chance to get much needed revenues in the door and an effort to prop up a dwindling stock value. Yet the frenzied option of proceeding despite the danger posed to the public was discussed as well.

“ Let’s get this straight, even if they ( Live Nation ) got a pass from state governments and chose to move forward with ACL and Bonnaroo, that would be wildly irresponsible. It would be a hail mary pass and they would literally be throwing bodies on the fire by doing so. If you see them moving forward with those festivals, it would be an act of desperation to try and avoid extinction .“– Unnamed Live Nation Employee

Look, cash flows are a critical part of any enterprise of this magnitude. We know it is not the best look to stockholders if you were to be transparent about seeking interest free loans from fans. However, honesty from Live Nation about their plight would give kids the option to hand over their hard earned money to the concert giant or spend it on other critical bills that are falling by the wayside right now. 

Like rent. Or healthcare. 

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