What changed in this filing

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Item 1A. Risk Factors

2021-03-01 compared with 2020-02-27 · 255 added, 251 removed, 203 unchanged (71% of the section changed)

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In that case, the trading price of our common stock could decline.

Risks Relating to Our Business and Operations

Risks Relating to the COVID-19 Pandemic

The global COVID-19 pandemic has had, and is likely to continue to have, a material negative impact on our business and operating results.

The ultimate magnitude of this impact will depend on a variety of factors, including the duration of the pandemic, restrictions or new operational requirements in place or that result as our operations recommence on a jurisdiction by jurisdiction basis, the state of the global economy as a result of the pandemic, and the public’s willingness to attend events with large numbers of people, all of which are unknowable at this time.

In mid-March 2020, as the unprecedented impact of the global COVID-19 pandemic became clearer, we ceased all Live Nation tours and closed our venues to support global efforts at social distancing and mitigating the spread of the virus, and to comply with restrictions put in place by various governmental entities.

Other concert promoters, venue operators and sports leagues around the globe similarly shut down.

Each of our segments—Concerts, Ticketing and Sponsorship & Advertising—depends on live music and sporting events in order to generate most of its revenue.

As of the date of this report, certain sports leagues have recommenced, but they have largely done so without fans or at greatly reduced capacity, and thus without the typical need for ticketing.

There has also been extremely limited concert activity, largely outside of the United States, at reduced capacity.

Until such time as fans are allowed at sporting events at capacity and concerts recommence in a meaningful way, our revenue will be minimal;

the possibility exists that these circumstances might continue for a longer period of time than current expectations.

We have never previously experienced a complete cessation of our live music operations, and as a result, our ability to gauge the impact of such a cessation on our company and its future prospects is uncertain.

Due to the unprecedented nature of the global COVID-19 pandemic and its impacts on our business, our ability to forecast our cash inflows is hampered, and therefore our focus is on forecasting and managing operating costs and cash outflows against our overall liquidity position.

At this time, it is impossible to know or predict when events will once again be held at a meaningful scope and scale, as at the outset of the pandemic national and local governments around the world placed various restrictions on gatherings of people and implemented social distancing requirements that prohibit the holding of these events, and have largely not relaxed these restrictions in a way that would again allow such events.

In addition, it is currently unclear as to what restrictions will be placed on events once they recommence at various points in time in the 46 countries in which we operate.

The company faces ancillary risks and uncertainties arising from the global COVID-19 pandemic in addition to the current shutdown of its revenue-generating operations.

Many of these risks and uncertainties are more fully described below in this Item 1A.

whether or not such risk factors identify the global COVID-19 pandemic as the underlying cause, and many extend beyond the duration of the current shutdown due to the uncertainty as to how the live music and sporting industries, and the world in general, will change in the short and long term as a result of the pandemic.

The risks and uncertainties described herein should be read in conjunction with those set forth below.

Such additional or attendant risks and uncertainties include, among other things:

• the impact of any lingering economic downturn or recession resulting from the pandemic, including without limitation any reduction in discretionary spending or confidence for both consumers and sponsors/advertisers, such as a decline in ticket sales, attendance and revenue that the company has generally avoided in prior economic slowdowns but experienced during and after the global financial crisis in 2010;

• the increased risk of litigation in the current and future environment, such as pending lawsuits challenging aspects of the company’s ticket refund policies and procedures;

• a reduction in the profitability of our operations when concerts resume, whether due to increased operating costs of complying with governmental restrictions or safety precautions and protocols voluntarily undertaken, such as the need to supply personal protective equipment or conduct health screenings at points of ingress, or due to a reduction in revenue arising from such precautions, such as the potential that venues may not be able to be filled to capacity due to spacing and social distancing limitations in place at such time;

• the impact on our workforce, including as a result of employee furloughs as part of our cost-savings initiatives, which may include loss of key personnel as furloughed employees find other employment or choose not to return to the company, lowered employee morale, inability to replace hourly/seasonal workforce, or loss of important subcontractors, all of which may negatively impact our ability to quickly capitalize on opportunities as pandemic restrictions are eased or to conduct our operations in the future;

• potential decreased willingness of artists to tour, or impracticability of touring due to varying restrictions from jurisdiction to jurisdiction, including the possibility that national or sub-national borders are closed to travel;

• potential changes to consumer preferences for consumption of live music or sporting events due to fears of, or restrictions on, large gatherings;

• some customers of our ticketing business may not receive refunds for ticket purchases if the venue/client hosting the impacted event is unable or unwilling to return the funds;

• loss of ticketing clients due to the economic impacts of the pandemic whereby they are no longer in operation, reducing the number of events to which our ticketing business can sell tickets;

• the inability to pursue expansion opportunities or acquisitions due to capital constraints;

• the future availability or increased cost of insurance coverage;

• a potential shift away from live events by sponsors and advertisers;

• the incurrence of additional expenses related to compliance, precautions and management of our company during and after this period.

The likelihood of the realization or intensification of these risks and uncertainties and the ultimate magnitude of their impact on the company are not knowable or quantifiable at this time.

The global COVID-19 pandemic and its impacts may continue to endure for an unknown period of time.

In addition, as has already occurred in various locations, the potential exists for further waves of the pandemic after the current wave of infections subsides, which may lead to stronger restrictions being put into place for a greater duration of time.

Different jurisdictions will lift social distancing guidelines and restrictions on gatherings of people at different times, and will have different rules in place thereafter.

The longer the duration of the global COVID-19 pandemic, and the greater the ancillary and lingering effects, the greater the material negative impact on the company and its results of operations will be.

While vaccination programs have begun around the world, we are still at the early stages and the ultimate impact of such programs on the pandemic and its duration, and thus on our business, are unknown.

In addition, due to the reduction in cash flows we have experienced and are likely to experience in the future from the global COVID-19 pandemic, we have proactively taken a number of steps to enhance our liquidity position, including our cost-savings and cash management programs described in Item 8.—Financial Statements—Note 2—Impact of the Global COVID-19 Pandemic, the additional debt issuances and the amendments we made to our senior secured credit facility described in Item 8.—Financial Statements—Note 5—Long-Term Debt.

Our decreased cash flows have heightened and intensified the risks described under the “Risks Relating to Our Leverage” section of the risk factors in this report.

While amendments to our senior secured credit facility have relieved some of the pressure on the consolidated net leverage covenant therein, which requires us to maintain a ratio of consolidated total net debt to consolidated EBITDA (both as defined in the credit agreement), there can be no assurances that we will remain in compliance with this or other covenants in our debt and credit instruments, or that we would be able to obtain waivers or amendments in order to avoid default.

We will continue to evaluate and explore additional mechanisms to attempt to ensure that we have adequate capital to fund our business, including through the issuance and sale of additional debt or equity securities.

The terms of future debt agreements could include more restrictive covenants, or require incremental collateral, which may further restrict our business operations or be unavailable due to our covenant restrictions then in effect.

Due to potential liquidity concerns caused by the global COVID-19 pandemic, in March and August 2020, Moody’s downgraded our Corporate Family Ratings and in May 2020, S&P downgraded the company’s credit ratings to B+ with a negative outlook;

the likelihood that we may experience further negative credit actions increases the longer the duration of the pandemic and its ancillary effects.

There is no guarantee that debt financings will be available in the future to fund our obligations, or that they will be available on terms consistent with our expectations.

Additionally, the impact of the global COVID-19 pandemic on the financial markets could adversely impact our ability to raise funds.

Risks Relating to Our Business and the Live Events and Ticketing Industries

Our business is highly sensitive to public tastes and is dependent on our ability to secure popular artists and other live music events, and we and our ticketing clients may be unable to anticipate or respond to changes in consumer preferences, which may result in decreased demand for our services.

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This direct competition with our prospective or current primary ticketing clients could result in a decline in the number of ticketing clients we have and a decline in the volume of our ticketing business, which could adversely affect our business, financial condition and results of operations.

In the secondary ticket sales market, we have restrictions on our business that are not faced by our competitors, which restrictions include those that are self-imposed, imposed as a result of agreements entered into with the Federal Trade Commission (“FTC”), the Attorneys General of several individual states, and various international governing bodies, and statutory.

In the secondary ticket sales market, we have restrictions on our business that are not faced by our competitors, imposed as a result of agreements entered into with the Federal Trade Commission (“FTC”), the Attorneys General of several individual states, and various international governing bodies.

These restrictions include:

an obligation to obtain approval from the State of New Jersey as to any material changes to our current linking practices from primary to secondary ticketing sites;

a requirement to clearly and conspicuously disclose on any primary ticketing website where a link or redirect to a resale website owned or controlled by us is posted, that the link is directing the user to a resale website and that ticket prices often exceed the ticket’s original price;

and a requirement to make certain clear and conspicuous disclosures and in certain instances to create separate listings when a ticket being offered for resale is not “in-hand” as well as a requirement to monitor and enforce the compliance of third parties offering tickets on our websites with such disclosure requirements.

While there are certain state laws that now ban such speculative ticket listings, we do not believe our competitors in the secondary ticket sales market are subject to the same restrictions or required to make the same disclosures required of us, though we believe the FTC has reached out to various other secondary ticketing marketplaces to ensure they state that the website is a resale website and prices could exceed face value.

As a result, our ability to effectively compete in the secondary ticket sales market may be adversely affected, which could in turn adversely affect our business, financial condition and results of operations.

In connection with our merger with Ticketmaster Entertainment, Inc., we became subject to both a court-imposed final judgment in the United States and a consent agreement with Canadian authorities, pursuant to which we have agreed to abide by certain behavioral remedies that prevent us from engaging in retaliatory business tactics or improper tying arrangements.

In addition, we are restricted from engaging in certain business activities that would be lawful for us to undertake absent the final judgment and the consent agreement.

Our inability to undertake these business strategies could disadvantage us when we compete against firms that are not restricted by any such order, and we therefore face certain unquantifiable business risks as a result of compliance.

(See the risk factor entitled “We recently agreed with the United States Department of Justice to extend and clarify the court-imposed final judgment to which we became subject in connection with the merger of Live Nation, Inc.

and Ticketmaster Entertainment LLC, which places certain restrictions and obligations on us which could negatively impact our business” below.)

and a requirement to make certain clear and conspicuous disclosures and in certain instances disclose when a ticket being offered for resale is not “in-hand” as well as a requirement to monitor and enforce the compliance of third parties offering tickets on our websites with such disclosure requirements.

There are certain state laws that now ban such ticket listings, and the New York Attorney General has brought a lawsuit against resale companies for these practices.

Other variables related to the competitive environment that could adversely affect our financial performance by, among other things, leading to decreases in overall revenue, the number of sponsors, event attendance, ticket prices and fees or profit margins include:

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• other entertainment options available to our audiences that we do not offer.

The success of our ticketing business and other operations depends, in part, on the integrity of our systems and infrastructure, as well as affiliate and third-party computer systems, wifi and other communication systems.

Our success depends, in significant part, on entertainment, sporting and leisure events and economic and other factors adversely affecting such events could have a material adverse effect on our business, financial condition and results of operations.

A decline in attendance at or reduction in the number of live entertainment, sporting and leisure events may have an adverse effect on our revenue and operating income.

In addition, during periods of economic slowdown and recession, many consumers have historically reduced their discretionary spending and advertisers have reduced their advertising expenditures.

The impact of economic slowdowns on our business is difficult to predict, but they may result in reductions in ticket sales, sponsorship opportunities and our ability to generate revenue.

The risks associated with our businesses may become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in attendance at live entertainment, sporting and leisure events.

Many of the factors affecting the number and availability of live entertainment, sporting and leisure events are beyond our control.

For instance, certain sports leagues have experienced labor disputes leading to threatened or actual player lockouts.

Any such lockouts that result in shortened or canceled seasons would adversely impact our business to the extent that we provide ticketing services to the affected teams both due to the loss of games and ticketing opportunities as well as the possibility of decreased attendance following such a lockout due to adverse fan reaction.

Our business depends on discretionary consumer and corporate spending.

Many factors related to corporate spending and discretionary consumer spending, including economic conditions affecting disposable consumer income such as unemployment levels, fuel prices, interest rates, changes in tax rates and tax laws that impact companies or individuals, and inflation can significantly impact our operating results.

Business conditions, as well as various industry conditions, including corporate marketing and promotional spending and interest levels, can also significantly impact our operating results.

These factors can affect attendance at our events, premium seat sales, sponsorship, advertising and hospitality spending, concession and merchandise sales, as well as the financial results of sponsors of our venues, events and the industry.

Negative factors such as challenging economic conditions and public concerns over terrorism and security incidents, particularly when combined, can impact corporate and consumer spending, and one negative factor can impact our results more than another.

There can be no assurance that consumer and corporate spending will not be adversely impacted by current economic conditions, or by any future deterioration in economic conditions, thereby possibly impacting our operating results and growth.

We are dependent upon our ability to lease, acquire and develop live music venues, and if we are unable to do so on acceptable terms, or at all, our results of operations could be adversely affected.

Our Concerts and Sponsorship & Advertising segments require access to venues to generate revenue from live music events.

For these events, we use venues that we own, but we also operate a number of our live music venues under various agreements which include leases with third parties, ownership through an equity interest or booking agreements, which are agreements where we contract to book the events at a venue for a specific period of time.

Our long-term success in the live music business will depend in part on the availability of venues, our ability to lease these venues and our ability to enter into booking agreements upon their expiration.

As many of these agreements are with third parties over whom we have little or no control, we may be unable to renew these agreements or enter into new agreements on acceptable terms or at all, and may be unable to obtain favorable agreements with venues.

Our ability to renew these agreements or obtain new agreements on favorable terms depends on a number of other factors, many of which are also beyond our control, such as national and local business conditions and competition from other promoters.

If the cost of renewing these agreements is too high or the terms of any new agreement with a new venue are unacceptable or incompatible with our existing operations, we may decide to forego these opportunities.

There can be no assurance that we will be able to renew these agreements on acceptable terms or at all, or that we will be able to obtain attractive agreements with substitute venues, which could have a material adverse effect on our results of operations.

We may continue to expand our operations through the development of live music venues and the expansion of existing live music venues, which poses a number of risks, including:

• construction of live music venues may result in cost overruns, delays or unanticipated expenses;

• desirable sites for live music venues may be unavailable or costly;

• the attractiveness of our venue locations may deteriorate over time.

Growth or maintenance of our existing revenue depends in part on consistent investment in our venues.

Therefore, we expect to continue to make substantial capital improvements to meet long-term increasing demand, improve value and grow revenue.

We frequently have a number of significant capital projects underway.

Numerous factors, many of which are beyond our control, may influence the ultimate costs and timing of various capital improvements.

The amount of capital expenditures can vary significantly from year to year.

In addition, actual costs could vary materially from our estimates if our assumptions about the quality of materials, equipment or workmanship required or the cost of financing such expenditures were to change.

Construction is also subject to governmental permitting processes which, if changed, could materially affect the ultimate cost.

Additionally, the market potential of live music venue sites cannot be precisely determined, and our live music venues may face competition in markets from unexpected sources.

Newly constructed live music venues may not perform up to our expectations.

We face significant competition for potential live music venue locations and for opportunities to acquire existing live music venues.

Because of this competition, we may be unable to add to or maintain the number of our live music venues on terms we consider acceptable.

There is the risk of personal injuries and accidents in connection with our live music events, which could subject us to personal injury or other claims and increase our expenses, as well as reduce attendance at our live music events, causing a decrease in our revenue.

There are inherent risks involved with producing live music events.

As a result, personal injuries and accidents have occurred, and may in the future occur, from time to time, which could subject us to claims and liabilities for personal injuries.

Incidents in connection with our live music events at any of our venues or festival sites that we own or rent could also result in claims, reducing operating income or reducing attendance at our events, which could cause a decrease in our revenue.

We have been subject to wrongful death claims and are currently subject to other litigation.

In addition, while we have security protocols in place at our events, illegal drug use or alcohol consumption at our events could result in negative publicity, adverse consequences (including illness, injury or death) to the persons engaged in such activities or others, and litigation against us.

While we maintain insurance policies that provide coverage within limits that are sufficient, in management’s judgment, to protect us from material financial loss for personal injuries sustained by persons at our venues or events or accidents in the ordinary course of business, there can be no assurance that such insurance will be adequate at all times and in all circumstances.

Poor weather adversely affects attendance at our live music events, which could negatively impact our financial performance from period to period.

We promote and/or ticket many live music events.

Weather conditions surrounding these events affect sales of tickets, concessions and merchandise, among other things.

Poor weather conditions can have a material effect on our results of operations particularly because we promote and/or ticket a finite number of events.

Increased weather variability due to climate change exacerbates weather-related issues we face.

Due to weather conditions, we may be required to cancel or reschedule an event to another available day or a different venue, which would increase our costs for the event and could negatively impact the attendance at the event, as well as concession and merchandise sales.

Poor weather can affect current periods as well as successive events in future periods.

Risks Relating to Information Technology, Cybersecurity and Intellectual Property

System interruption and the lack of integration and redundancy in these systems and infrastructure may have an adverse impact on our business, financial condition and results of operations.

System interruption and the lack of integration and redundancy in the information systems and infrastructure, both of our own ticketing systems and other computer systems and of affiliate and third-party software, wifi and other communications systems service providers on which we rely, may adversely affect our ability to operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.

System interruption and the lack of integration and redundancy in the information systems and infrastructure, both of our own ticketing systems and other computer systems and of affiliate and third-party software, computer networks and other communications systems service providers on which we rely, may adversely affect our ability to operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.

Such interruptions could occur by virtue of natural disaster, malicious actions such as hacking or acts of terrorism or war, or human error.

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The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems may change frequently and as a result, may be difficult for our business to detect for long periods of time.

In addition, despite our best efforts, we may be unable to anticipate these techniques or implement adequate preventative measures.

In addition, despite our best efforts, we may be unaware of or unable to anticipate these techniques or implement adequate preventative measures.

We have expended significant capital and other resources to protect against and remedy such potential security breaches, incidents and their consequences, including the establishment of a dedicated cybersecurity organization within our larger technology environment, and will continue to do so in the future.

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While we acted promptly to disable the infected third-party product, we continue to review our systems and interface with regulatory authorities as a result of this incident.

These include proceedings contesting a proposed fine issued by the United Kingdom’s (“U.K.”) Information Commissioner’s Office in November 2020 against Ticketmaster U.K.

Limited in connection with this incident.

Consumers are generally concerned with the security and privacy of the internet, and any publicized security problems affecting our businesses and/or third parties may discourage consumers from doing business with us, which could have an adverse effect on our business, financial condition and results of operations.

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Regulators and government enforcement actions worldwide are imposing significant fines against companies for data privacy violations.

Our business operations, including our ticketing business, involve the collection, transfer, use, disclosure, security, and disposal of personal or sensitive information in various locations around the world, including the European Union (“E.U.”), where the General Data Protection Regulation (“GDPR”) governs data privacy.

The GDPR imposes a minimum set of rules in relation to the processing of E.U.

residents’ personal information, which each E.U.

Member State was required to transpose into national law (in the United Kingdom (which was a member of the E.U.

at the time the GDPR was enacted), for example, the GDPR was given direct effect via the Data Protection Act of 2018).

The GDPR therefore does not result in a harmonized system of data privacy laws in the E.U.;

national law variations may apply.

Failure to comply with the GDPR may result in significant monetary penalties of up to (a) 4% of a company’s worldwide total revenue or (b) €20 million, whichever is higher.

We have committed significant capital and personnel resources to ensure, so far as is possible, that we are in compliance with the GDPR;

however, there can be no assurances that violations will not occur, particularly given the complexity of the GDPR and related local laws, our business, and the uncertainties that accompany new, comprehensive legislation.

In addition, following the withdrawal of the United Kingdom from the E.U.

on December 31, 2020, we must separately comply with the U.K.’s data protection law, under which additional fines and penalties could be imposed independent of the GDPR.

The relationship between U.K.

data protection law and the GDPR remains unclear, including regarding how data transfers between the E.U.

will be treated.

These changes could lead to additional compliance costs and could increase our overall risk.

As we expand our operations into new jurisdictions, the costs associated with compliance with applicable local data privacy laws and regulations increases.

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the realization of one or all of the foregoing could adversely affect our business, financial condition and results of operations.

We may be adversely affected by the occurrence of extraordinary events, such as terrorist attacks or disease epidemics.

The occurrence and threat of extraordinary events, such as terrorist attacks, intentional or unintentional mass-casualty incidents, public health concerns such as contagious disease outbreaks, natural disasters or similar events, may deter artists from touring and/or substantially decrease the use of and demand for our services and the attendance at live music events, which may decrease our revenue or expose us to substantial liability.

The terrorism and security incidents in the past, military actions in foreign locations, periodic elevated terrorism alerts and fears from publicized contagious disease outbreaks have raised numerous challenging operating factors, including public concerns regarding air travel, military actions and additional national or local catastrophic incidents, causing a nationwide disruption of commercial and leisure activities.

In the event of actual or threatened terrorism events, some artists may refuse to travel or book tours, which could adversely affect our business.

Attendance at events may decline due to fears over terrorism and contagious disease outbreaks, which could adversely impact our operating results.

There have been terrorist attacks at events that we have promoted or with which we have otherwise been involved, which have resulted in lawsuits questioning, among other things, the adequacy of the security precautions at these events.

While we are constantly evaluating the security precautions for our events in an effort to ensure the safety of the public, no security measures can guarantee safety and there can be no assurances that we won’t face liabilities, which could be substantial and materially impact our operating results, in connection with such terrorist attacks at our events.

In addition, we hold a large number of events at third-party venues that we do not own or operate.

While we do not have direct control over the security at such venues, there can be no guarantees that victims of a terrorism or casualty event at such venues will not seek to impose, or ultimately be successful in imposing, liability on us.

The occurrence or threat of future terrorist attacks, military actions by the United States or others, contagious disease outbreaks, natural disasters such as earthquakes and severe floods or similar events cannot be predicted, and their occurrence can be expected to negatively affect the economies of the United States and other foreign countries where we do business, as well as our operating results.

For instance, there are concerns regarding the recent outbreak of the coronavirus in China and its spread to other regions.

Not only could such outbreak dissuade fans from attending events with large audiences, it could also impede economic activity in impacted regions or globally, leading to a decline in consumer discretionary spending on things such as concerts and other entertainment, sporting and leisure events.

While the ultimate scope and scale of the coronavirus is unknown at this time, our financial condition and results of operations could be negatively and materially impacted if conditions worsen or significant quarantines are put into place.

While we have health and safety programs designed to mitigate the risks that are inherent in the staging of concerts and other events, as well as those associated with extraordinary occurrences or actions that may take place at our events, there can be no assurances that these programs will be sufficient to fully cover every possibility.

Despite our best efforts, some occurrences or actions are difficult to foresee and adequately plan for, which could lead to fan, vendor and/or employee harm resulting in fines, penalties, legal costs and reputational risk that could materially and adversely impact our business and results of operations.

We may fail to adequately protect our intellectual property rights or may be accused of infringing upon intellectual property rights of third parties.

We regard our intellectual property rights, including patents, trademarks and domain names, copyrights, trade secrets and similar intellectual property (as applicable) as critical to our success.

We also rely heavily upon software codes, informational databases and other components that make up our products and services.

We have been granted trademark registrations and patents and/or have trademark and patent applications pending with the United States Patent and Trademark Office and/or various foreign authorities for various proprietary trademarks, technologies and other inventions.

Any patent or trademark application filed may not result in a patent or trademark registration being issued, or existing or future patents or trademarks may not be adjudicated valid by a court or be afforded adequate protection against competitors.

Likewise, the issuance of a patent or trademark registration to us does not mean that its processes, inventions or trademark will not be found to infringe upon rights previously issued to third parties.

We rely on a combination of laws and contractual restrictions with employees, customers, suppliers, affiliates and others to establish and protect these proprietary rights.

Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our intellectual property without authorization which, if discovered, might require legal action to correct.

In addition, third parties may independently and lawfully develop substantially similar intellectual properties.

From time to time, we are subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of the intellectual property rights of third parties.

Our failure to protect our intellectual property rights in a meaningful manner or challenges to related contractual rights could result in erosion of brand names or other intellectual property and could adversely affect our business, financial condition and results of operations.

Therefore, litigation may be necessary in the future to enforce our intellectual property rights, protect trade secrets or determine the validity and scope of proprietary rights claimed by others.

Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business, financial condition and results of operations.

Risks Relating to Governmental Regulation and Litigation

We operate in international markets which subject us to risks associated with the legislative, judicial, accounting, regulatory, political and economic risks and conditions specific to such markets, which could adversely affect our business, financial condition and results of operations.

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Any such violations, even if prohibited by our internal policies, could result in fines, criminal sanctions against us and/or our employees, prohibitions on the conduct of our business and damage to our reputation, which could adversely affect our business, financial condition and results of operations.

In addition, given our substantial operations in the United Kingdom (the “U.K.”) and the E.U., we face risks and uncertainties due to the referendum and approval by voters in the U.K.

of an exit from the E.U., commonly referred to as “Brexit.” The U.K.

legally left the E.U.

on January 31, 2020;

however, the U.K.

will be in a transition period until December 31, 2020 during which the U.K.

will continue to follow the E.U.’s rules and regulations, the U.K.

will remain in the single market and the customs union, and the free movement of people will continue.

Any new rules on trade, travel, and business for the U.K.

will take effect on January 1, 2021.

These risks and uncertainties include those related to:

expected continuation of volatility in the exchange rate, which is anticipated to decrease during the transition period and decrease further when a trade deal is signed (see the risk factor captioned “Exchange rates may cause fluctuations in our results of operations that are not related to our operations” below for more discussion of the impact of currency fluctuations on our business);

continued uncertainty in the economic environment of the U.K.

until the terms of a trade deal are agreed;

the impact of the ultimate terms of any new trade deal with the E.U.

and any new trading terms with other territories, including the United States, now that the U.K.

is free to negotiate its own trading terms with such other territories;

the ultimate terms for cross-border movement of workers agreed upon between the U.K and the E.U.;

continued political uncertainty in the U.K, which is now lessened by the Conservative Party’s majority and the legal departure of the U.K from the E.U.;

and continued regulatory uncertainty such as the potential need to find an alternative E.U.

data protection/privacy regulator should the U.K.’s current Data Privacy Regulator, the ICO, cease to be recognized by the Data Protection Board made up of the regulators of the remaining E.U.

member states (though the ICO could continue to be the regulator within the U.K.).

Given that the form and specific mechanics of any new rules on trade, travel, and business for the U.K.

are still in the process of being determined, the full parameters and implications of Brexit are currently unknown;

however, these and other factors, if realized, could adversely affect our business, financial condition and results of operations.

While members of the U.K.

government have recently made public statements recognizing the importance of, and expressing a commitment to, touring ( e.g ., in January 2020 the U.K.’s Culture Minister Nigel Adams MP said:

“Touring is the lifeblood of the industry and we recognise the importance of the continued ease of movement of musicians, equipment and merchandise once we have left the E.U.

Visa rules for artists performing in the E.U.

will not change until the implementation period ends in December 2020.

They are being considered, and we welcome the views of all Hon.

Members and the industry on movement within Europe.

It is essential that free movement is protected for artists post 2020.”), until such rules and regulations are established, the full impact of Brexit on our company will remain unknowable.

In addition, given our substantial operations in the U.K.

and the E.U., we face risks and uncertainties due to the U.K.’s exit from the European Union.

has agreed “third country” trading status in a new E.U.-U.K.

Trade and Cooperation Agreement applicable from January 1, 2021.

The trade agreement sets out arrangements in areas such as tariff-free trade in goods.

However, it does not match the level of economic integration that existed while the U.K.

Member State.

There will be additional bureaucracy and cost with customs formalities, VAT, excise duties and ATA carnets for goods moved between the U.K.

These risks and uncertainties include some regulatory uncertainty for data protection.

It has been confirmed that the U.K.

ICO will not be able to act as the single authority for E.U.

multinationals;

this means that E.U.

multinationals will often have two regulators;

activities and one for the rest of the E.U.27 where cross-border processing takes place.

Live Nation is currently re-assessing its lead authority based on its cross-border processing, so it continues to have a main point of contact for the E.U.

In addition, the U.K.

is now not part of the E.U.

for purposes of data transfers.

The GDPR principle that data cannot leave the E.U.

in this case) now applies.

While a four to six month grace period is currently in effect, following this, there are two possible scenarios:

is granted adequacy by the E.U., allowing data to continue to flow to the U.K.

or (2) adequacy is not granted, in which case additional safeguards, such as contractual commitments would need to be implemented for E.U.-U.K.

Live Nation has already documented data flows to identified where U.K.

flows occur and have contractual templates prepared should scenario two materialize.

Live Nation as a tour sponsor will continue to use Tier 5 routes into the U.K.

now including E.U.

musicians and crew on the sponsor’s license.

For tours in Europe, U.K.

musicians’ working arrangements will be subject to individual E.U.

member states and bilateral agreements reached with the U.K.

In many member states the working arrangements will be the same or similar, such as in France and Germany.

In others, there may be new requirements for the sponsor.

As a significant sponsor with a long-established footprint across the E.U.

markets, Live Nation remains in a strong position when European markets reopen from coronavirus restrictions.

We are subject to extensive governmental regulation, and our failure to comply with these regulations could adversely affect our business, financial condition and results of operations.

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For example, some legislatures have proposed laws in the past that would impose potential liability on us and other promoters and producers of live music events for entertainment taxes and for incidents that occur at our events, particularly relating to drugs and alcohol.

New legislation could be passed that may negatively impact our business, such as provisions that have recently been proposed in various jurisdictions that would restrict ticketing methods, mandate ticket inventory disclosure and attack current policies governing season tickets for sports teams.

New legislation could be passed that may negatively impact our business, such as provisions that have recently been proposed in various jurisdictions that would restrict ticketing methods.

Additionally, governmental actions such as the current sanctions by the United States Department of the Treasury’s Office of Foreign Assets Control and European regulators on certain Russian individuals and entities, as well as other sanctions elsewhere in the world, could restrict or limit our business activities in certain areas or subject us to sanction for noncompliance, even if inadvertent.

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Our competitors in the secondary ticket sales market are not, to our knowledge, bound by such limitations (other than as a result of laws that apply equally to all secondary ticket sellers) and as a result, we may be at a competitive disadvantage.

From time to time, other states, Canadian provinces and the federal government have commenced investigations or inquiries regarding the relationship between us and certain of our subsidiaries and other aspects of our ticketing business, including a now-settled suit brought by the Canadian Competition Bureau relating to alleged deceptive marketing practices, as well as other ongoing investigations or inquiries.

From time to time, other states, Canadian provinces and the federal government have commenced investigations or inquiries related to other aspects of our ticketing business, including a now-settled suit brought by the Canadian Competition Bureau relating to alleged deceptive marketing practices.

In addition, we recently agreed with the United States Department of Justice to extend the duration of the consent decree we entered into in connection with our merger with Ticketmaster Entertainment LLC, which places certain restraints on our business (see the risk factor entitled “We recently agreed with the United States Department of Justice to extend and clarify the court-imposed final judgment to which we became subject in connection with the merger of Live Nation, Inc.

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Even if we adequately address the issues raised by an investigation or proceeding or successfully defend a third-party lawsuit or counterclaim, we may have to devote significant financial and management resources to address these issues, which could harm our business, financial condition and results of operations.

A decline in attendance at or reduction in the number of live entertainment, sporting and leisure events may have an adverse effect on our revenue and operating income.

In addition, during periods of economic slowdown and recession, many consumers have historically reduced their discretionary spending and advertisers have reduced their advertising expenditures.

The impact of economic slowdowns on our business is difficult to predict, but they may result in reductions in ticket sales, sponsorship opportunities and our ability to generate revenue.

Many of the factors affecting the number and availability of live entertainment, sporting and leisure events are beyond our control.

For instance, certain sports leagues have experienced labor disputes leading to threatened or actual player lockouts.

Our business depends on discretionary consumer and corporate spending.

Business conditions, as well as various industry conditions, including corporate marketing and promotional spending and interest levels, can also significantly impact our operating results.

Exchange rates may cause fluctuations in our results of operations that are not related to our operations.

Because we own assets overseas and derive revenue from our international operations, we may incur currency translation losses or gains due to changes in the values of foreign currencies relative to the United States Dollar.

We cannot predict the effect of exchange rate fluctuations upon future operating results.

For the year ended December 31, 2019, our international operations accounted for approximately 34% of our revenue.

We cannot predict the future relationship between the United States Dollar and the currencies used by our international businesses, principally the British Pound, Euro, Australian Dollar and Canadian Dollar.

We experienced foreign exchange rate operating losses of $9.8 million and $1.8 million for the years ended December 31, 2019 and 2018, respectively, and foreign exchange rate operating income of $7.2 million the year ended December 31, 2017, which impacted our operating income.

See Item 7A.—Quantitative and Qualitative Disclosures about Market Risk.

We may enter into future acquisitions and take certain actions in connection with such transactions, including actions taken to comply with antitrust, competition and other regulations, that could affect our business and results of operations;

if we are unsuccessful in our future acquisition endeavors, our business could be adversely impacted.

Our future growth rate depends in part on our selective acquisition of additional businesses.

A portion of our growth has been attributable to acquisitions.

We may be unable to identify other suitable targets for further acquisition or make further acquisitions at favorable prices.

If we identify a suitable acquisition candidate, our ability to successfully complete the acquisition would depend on a variety of factors, and may include our ability to obtain financing on acceptable terms and requisite government approvals.

In addition, the credit agreement for our senior secured credit facility restricts our ability to make certain acquisitions.

In connection with future acquisitions, we could take certain actions that could adversely affect our business, including:

• using a significant portion of our available cash;

• issuing equity securities, which would dilute current stockholders’ percentage ownership;

• incurring substantial debt;

• incurring or assuming contingent liabilities, known or unknown;

• incurring amortization expenses related to intangibles;

• incurring large accounting write-offs or impairments.

In addition, acquisitions involve inherent risks which, if realized, could adversely affect our business and results of operations, including those associated with:

• integrating the operations, financial reporting, technologies and personnel of acquired companies, including establishing and maintaining a system of internal controls appropriate for a public company environment;

• managing geographically dispersed operations;

• the diversion of management’s attention from other business concerns;

• the inherent risks in entering markets or lines of business in which we have either limited or no direct experience;

• the potential loss of key employees, customers and strategic partners of acquired companies.

We are also subject to laws and regulations, including those relating to antitrust at the state, federal and international levels, that could significantly affect our ability to expand our business through acquisitions.

For example, the FTC and the Antitrust Division of the United States Department of Justice with respect to our domestic acquisitions, and the European Commission (the antitrust regulator of the E.U.) and the United Kingdom Competition Commission with respect to our European acquisitions, have the authority to challenge our acquisitions on antitrust grounds before or after the acquisitions are completed.

Our failure or inability to complete future acquisitions as a result of such laws and regulations, or the imposition of unfavorable terms as a condition to the completion of an acquisition, could have a material adverse effect on our business and results of operations.