What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-02-23 compared with 2022-02-23 · 103 added, 122 removed, 349 unchanged (39% of the section changed)

3 unchanged sentences

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

Risks Relating to the COVID-19 Pandemic

The global COVID-19 pandemic has had, and may 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.

While most sports leagues have recommenced, some have done so at reduced capacity, and thus without the typical need for ticketing.

Similarly, concerts have resumed on a jurisdiction by jurisdiction basis, often at reduced capacity and with the potential for cancellations and rescheduled events.

Our revenue will continue to be negatively impacted until such time as concerts and sporting events resume full activity levels at full capacity on a global basis;

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

Due to the unprecedented nature of the global COVID-19 pandemic, particularly the non-linear recovery due in part to surges of the virus and its variants that in some instances has halted or reversed the lessening of restrictions on activities and the return to pre-pandemic life, 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 whether the positive steps we saw toward returning to pre-pandemic event levels in various global jurisdictions in 2021 will continue or be hampered by additional waves of the virus, potentially causing national and local governments around the world to once again place or retain various restrictions on gatherings of people that prohibit or greatly impair the ability to hold concert and sporting events.

This uncertainty exists on a jurisdiction by jurisdiction basis in the in the 45 countries in which we operate.

We face ancillary risks and uncertainties arising from the global COVID-19 pandemic in addition to any partial or complete 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 initial impact of the pandemic on our business 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 tightening labor markets across the globe with unemployment rates dropping, resignations reaching record highs, and upward pressure on salaries and wages due to inflation and demand for skilled workers in numerous fields;

combined with, continuing supply chain issues could impact our ability to produce tours and festivals as well as open and maintain venues without timing and cost disruptions;

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

• a reduction in the profitability of our operations, 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;

• 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;

• 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 us are not knowable or quantifiable at this time, as the global COVID-19 pandemic and its impacts may continue for an unknown period of time.

Thus far, there have been several waves—periods where infection rates subside followed by spikes due to variants of the virus or other factors—of the pandemic, which may lead to stronger restrictions being put into place for a greater duration of time.

Different jurisdictions have and will continue to lift social distancing guidelines and restrictions on gatherings of people at different times, will have varied rules in place thereafter and will respond to any future waves of the virus in different ways.

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 may be.

While vaccination programs are now in place, the changing and evolving nature of the COVID-19 virus presents challenges to such programs, making the future course and duration of the pandemic uncertain, which impacts our business in a manner that is unknowable at this time.

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 and the additional debt issuances.

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.

There can be no assurances that we will remain in compliance with the 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.

In 2020, Moody’s and S&P downgraded the Company’s credit ratings and applied negative outlooks to our business.

In 2021, Moody’s and S&P both revised their outlooks from negative to stable, and in January 2022, S&P further improved their outlook to positive.

We may experience negative credit actions if the pandemic and its ancillary effects persist.

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

43 unchanged sentences

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 in the past brought lawsuits against resale companies for these practices.

There are certain state laws that now ban such speculative ticket listings, and the New York Attorney General has in the past brought lawsuits 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:

19 unchanged sentences

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.

The global COVID-19 pandemic had a material negative impact on our business and operating results.

While our operations have largely returned to normal, any resurgence of the pandemic, or outbreaks causing localized endemics in markets where we have significant operations, would adversely affect our business, financial condition and results of operations.

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

Each of our segments depends on live music and sporting events in order to generate most of its revenue.

While our operations in most markets have largely returned to normal, there can be no assurances that new outbreaks will not again cause operations in impacted markets to close and/or revert to restrictions on activities experienced during the height of the pandemic for an unknown duration of time.

We experienced ancillary risks and uncertainties arising from the global COVID-19 pandemic that have been reduced due to improved conditions, but may again become more acute if there are COVID-19 resurgences, many of which are more fully described in this Item 1A.

whether or not such risk factors identify the global COVID-19 pandemic as the underlying cause.

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 tightening labor markets across the globe combined with supply chain issues that could impact our ability to produce tours and festivals as well as open and maintain venues without timing and cost disruptions;

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

• a reduction in the profitability of our operations, 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, 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;

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

• loss of ticketing clients due to the economic impacts of the pandemic;

• 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.

We may again experience intensification of these risks and uncertainties should there be a resurgence of the pandemic or significant localized endemics;

the ultimate magnitude of the impact on our business would depend on the severity and length of any outbreaks.

In addition, due to the reduction in cash flows we experienced from the global COVID-19 pandemic, we proactively took a number of steps to enhance our liquidity position, including our cost-savings and cash management programs and additional debt issuances.

Future outbreaks of COVID-19 at any scale may again necessitate such actions, intensifying the risks described under the “Risks Relating to Our Leverage” section of the risk factors in this report.

During the height of the pandemic we experienced negative credit actions, which could again occur if there are COVID-19 resurgences.

Additionally, any COVID-19 resurgences could negatively affect financial markets and adversely impact our ability to raise funds.

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.

61 unchanged sentences

It is possible that advances in computer and hacker capabilities, new variants of malware, the development of new penetration methods and tools, inadvertent violations of company policies or procedures or other developments could result in a compromise of customer or employee information or a breach of the technology and security processes that are used to protect customer and employee information.

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.

The techniques used to obtain unauthorized access, automate or expedite transactions or other activities on our platform (e.g., “bots”), disable or degrade service or sabotage systems (or otherwise bring about one or more of these effects) may change frequently and as a result, may be difficult for our business to detect for long periods of time and may impact the efficacy of our defenses and/or the products and services we provide.

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

For instance, in November 2022, significant bot activity in connection with a large ticket onsale significantly contributed to a degraded website experience for customers and our eventually needing to pause the on-sale to address these issues.

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.

2 unchanged sentences

For example, in the second quarter of 2018, we became aware that a third-party customer support product, used in certain jurisdictions outside the United States, was infected with a malicious code that may have allowed an unauthorized party to skim customers’ personal or payment information from their browsers.

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.

We acted promptly to disable the infected third-party product, reviewed our systems and interfaced with regulatory authorities as a result of 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.

6 unchanged sentences

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 and can result in the imposition of significant fines and penalties.

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

In addition, following the withdrawal of the United Kingdom (“U.K.”) from the E.U.

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

In the United States, several new comprehensive privacy laws, including in California, Virginia and Colorado, which go into effect in 2023, will require us to update our policies and procedures to continue to protect data as required under those laws.

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.

The changes in the E.U.,U.K.

and the United States.

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

In the United States, several new comprehensive privacy laws (including in California, Virginia and Colorado, which take effect in 2023), as well as new laws in Connecticut and Utah, will require us to update our policies and procedures to continue to protect data as required under those laws.

data protection law has continued to evolve and, notwithstanding the current EU decision that allows data to be transferred from the EU to the U.K., we anticipate additional changes to U.K.

data protection law within the next 12-18 months.

Any additional changes in the E.U., U.K.

and/or the United States 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.

40 unchanged sentences

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.

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

Trade and Cooperation Agreement applicable from January 1, 2021.

32 unchanged sentences

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.

is introducing an Electronic System for Travel Authorization (ESTA) style visa-waiver system (ETIAS – European Travel Information and Authorization System) starting in late 2023 for visitors from countries which are not part of the E.U.

From the end of 2023, all U.S.

citizens travelling to the Schengen zone will need to register with ETIAS.

is introducing its own Electronic Travel Authorization scheme (ETA) to digitalize its borders by 2025.

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.

17 unchanged sentences

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.

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

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.

1 unchanged sentence

Our businesses have historically cooperated with authorities in connection with these investigations and have satisfactorily resolved each such material investigation, inquiry or litigation.

We are currently subject to agreements with the States of New Jersey, Maryland and Illinois and the FTC which govern, and in certain cases place limitations on, our ticketing resale practices.

We are currently subject to agreements with the States of New Jersey, Maryland, Nevada, and Illinois and the FTC which govern, and in certain cases place limitations on, our ticketing resale practices.

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 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, in January 2020, we 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.

In addition, in January 2020, we 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 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).

25 unchanged sentences

The various terms of the Canadian Consent Agreement expired on or before July 2020.

Risks Relating to Our Leverage

We have a large amount of debt and lease obligations that could restrict our operations and impair our financial condition.

The agreements governing our senior secured credit facility and certain of our other indebtedness impose restrictions on us that limit the discretion of management in operating our business and that, in turn, could impair our ability to meet our obligations under our debt.

The agreements governing our senior secured credit facility and certain of our other indebtedness include restrictive covenants that, among other things, restrict our ability to:

• incur additional debt;

• pay dividends and make distributions;

• make certain investments;

• repurchase our stock and prepay certain indebtedness;

• create liens;

• enter into transactions with affiliates;

• modify the nature of our business;

• enter into sale-leaseback transactions;

• transfer and sell material assets;

• merge or consolidate.

In addition, our senior secured credit facility includes other restrictions, including requirements to maintain certain financial ratios.

Our failure to comply with the terms and covenants of our indebtedness could lead to a default under the terms of the governing documents, which would entitle the lenders to accelerate the indebtedness and declare all amounts owed due and payable.

As of December 31, 2021, our total indebtedness, excluding unamortized debt discounts and debt issuance costs of $99.5 million, was $5.8 billion.

Our available borrowing capacity under the revolving portion of our senior secured credit facility at that date was $569.9 million, with outstanding letters of credit of $60.1 million.

We may also incur significant additional indebtedness in the future.

Our substantial indebtedness could have adverse consequences, including:

• making it more difficult for us to satisfy our obligations;

• increasing our vulnerability to adverse economic, regulatory and industry conditions;

• limiting our ability to obtain additional financing for future working capital, capital expenditures, acquisitions and other purposes;

• requiring us to dedicate a substantial portion of our cash flow from operations to fund payments on our debt, thereby reducing funds available for operations and other purposes;

• limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• making us more vulnerable to increases in interest rates;

• placing us at a competitive disadvantage compared to our competitors that have less debt.

To service our debt and lease obligations and to fund potential acquisitions, artist and ticketing advances and capital expenditures, we will require a significant amount of cash, which depends on many factors beyond our control.

Our ability to service our debt and lease obligations and to fund potential acquisitions, artist and ticketing advances and capital expenditures will require a significant amount of cash, which depends on many factors beyond our control.

Our ability to make payments on and to refinance our debt will also depend on our ability to generate cash in the future.

This is, to an extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

We cannot provide assurance that our business will generate sufficient cash flow or that future borrowings will be available to us in an amount sufficient to enable us to pay our debt or to fund our other liquidity needs.

If our future cash flow from operations and other capital resources is insufficient to pay our obligations as they mature or to fund our liquidity needs, we may be forced to reduce or delay our business activities and capital expenditures, sell assets, obtain additional equity capital or restructure or refinance all or a portion of our debt on or before maturity.

In addition, the terms of our existing debt, including our senior secured credit facility, and other future debt may limit our ability to pursue any of these alternatives.

These measures might also be unsuccessful or inadequate in permitting us to meet scheduled debt service or lease obligations.

We may be unable to restructure or refinance our obligations and obtain additional debt or equity financing or sell assets on satisfactory terms or at all.

Capital markets have been volatile in the recent past;

a downturn could negatively impact our ability to access capital should the need arise.

As a result, the inability to meet our debt or lease obligations could cause us to default on those obligations.

Any such defaults could materially harm our financial condition and liquidity.

See Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments—Firm Commitments for further discussion.

We depend on the cash flows of our subsidiaries in order to satisfy our obligations.

We rely on distributions and loans from our subsidiaries to meet our payment requirements under our obligations.

If our subsidiaries are unable to pay dividends or otherwise make payments to us, we may not be able to make debt service payments on our obligations.

We conduct substantially all of our operations through our subsidiaries.

Our operating cash flows and consequently our ability to service our debt is therefore principally dependent upon our subsidiaries’ earnings and their distributions of those earnings to us and may also be dependent upon loans or other payments of funds to us by those subsidiaries.

Our subsidiaries are separate legal entities and may have no obligation, contingent or otherwise, to pay any amount due pursuant to our obligations or to make any funds available for that purpose.

Our foreign subsidiaries generate a portion of our operating cash flows.

Although we do not intend to repatriate these funds from our foreign subsidiaries in order to satisfy payment requirements in the United States, we would be required to accrue and pay United States state income taxes as well as any applicable foreign withholding or transaction taxes on future repatriations.

These taxes could be substantial and could have a material adverse effect on our financial condition and results of operations.

In addition, the ability of our subsidiaries to provide funds to us may be subject to restrictions under our senior secured credit facility and may be subject to the terms of such subsidiaries’ future indebtedness, as well as the availability of sufficient surplus funds under applicable law.

Conversion of our convertible notes may dilute the ownership interest of existing stockholders and may affect our per share results and the trading price of our common stock.

The issuance of shares of our common stock upon conversion of our convertible notes may dilute the ownership interests of existing stockholders.

Issuances of stock on conversion may also affect our per share results of operations.

Any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.

General Risks Relating to our Business and Operations

14 unchanged sentences

For the year ended December 31, 2022, 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 income of $2.6 million for the year ended December 31, 2020 and foreign exchange operating losses of $39.8 million and $9.2 million for the years ended December 31, 2022 and 2021, respectively, which impacted our operating income (loss).

35 unchanged sentences

Costs associated with, and our ability to obtain, adequate insurance could adversely affect our profitability and financial condition.

We currently secure insurance programs to address our various risks with terms, conditions and costs that are appropriate for our business.

We currently secure insurance programs to address our various risks with terms, conditions and costs that management deems appropriate for our business.

However, heightened concerns and challenges regarding property, casualty, business interruption, contingency and other insurance coverage have resulted from terrorist and other security incidents along with varying weather-related conditions, pandemics and other incidents.

Any such events that are of a massive scale causing significant losses to insurance providers could negatively impact the insurance marketplace, and as a result, we may experience increased difficulty obtaining sufficiently high policy limits of coverage at a cost we believe to be reasonable, including coverage for acts of terrorism, cyber attacks, weather-related damage and disruptions and other perils associated with our operations, including communicable diseases and/or pandemics.

We have experienced a significant increase in our cost to obtain appropriate insurance over the past several years, though it is difficult to gauge the portion of this increase that is due to conditions in the insurance marketplace generally versus that attributable to our claims history for the mass casualty, cybersecurity, the global COVID-19 pandemic and other incidents that we have faced.

We have a material investment in property and equipment at each of our venues, which are generally located near major cities and which hold events typically attended by a large number of fans.

18 unchanged sentences

Any unplanned or greater than expected multiemployer pension liabilities could have a material adverse effect on our business, financial condition and results of operations.