What changed in this filing

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Item 1A. Risk Factors

2024-02-22 compared with 2023-02-23 · 40 added, 60 removed, 392 unchanged (20% of the section changed)

14 unchanged sentences

In addition, our live entertainment business typically books our live music tours four to eight months in advance of the beginning of the tour and often agrees to pay an artist a fixed guaranteed amount prior to our receiving any revenue.

Therefore, if the public is not receptive to the tour, or we or an artist cancel the tour, we may incur a loss for the tour depending on the amount of the fixed guarantee or incurred costs relative to any revenue earned, as well as revenue we could have earned at booked venues.

if the public is not receptive to the tour, or we or an artist cancel the tour, we may incur a loss for the tour depending on the amount of the fixed guarantee or incurred costs relative to any revenue earned, as well as revenue we could have earned at booked venues.

We have cancellation insurance policies in place to cover a portion of our losses if an artist cancels a tour but such policies may not be sufficient and are subject to deductibles.

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Due to the importance of those industry contacts to our business, the loss of any of our promoters, officers or other key personnel could adversely affect our business.

Similarly, the artist management business is dependent upon the highly personalized relationship between a manager and an artist, and the loss of a manager may also result in a loss of the artist represented by the manager, which could adversely affect our business.

Although we have entered into long-term agreements with many of those individuals described above to protect our interests in those relationships, we can give no assurance that all or any of these key employees or managers will remain with us or will retain their associations with key business contacts, including music artists, as some agreements between a manager and an artist are not for a fixed period of time and are instead terminable at will.

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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.

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 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 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;

• 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.

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.

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.

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and related entities, asserting insufficient crowd control and other theories, seeking compensatory and punitive damages.

These events are the subject of an ongoing investigation by local authorities in Harris County, Texas, and are the subject of an inquiry we received from the House of Representatives Committee on Oversight and Reform.

We may incur material liabilities from the 2021 Astroworld event, for which it is currently expected liability insurance can provide sufficient coverage, but at this time there are no assurances of such coverage.

These events were the subject of an inquiry we received from the House of Representatives Committee on Oversight and Reform.

In addition, this could negatively impact our business, including our ability to obtain reasonably priced insurance coverage for future events, costs of operating security at events and other cost and commercial ramifications.

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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, 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.

The techniques used to obtain unauthorized access, automate or expedite transactions or other activities on our platform, 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.

We also face risks associated with security breaches and incidents affecting third parties with which we are affiliated or with which we otherwise conduct business.

In particular, hardware, software or applications we develop or procure from third parties may contain defects in design or manufacture and/or may pose a security risk that could unexpectedly compromise information security.

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.

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

In particular, hardware, software or applications we develop or procure from third parties may contain, and have contained, defects in design or manufacture and/or may pose a security risk that could unexpectedly compromise information security, but none of which have been material to date.

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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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 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 has continued to evolve and, notwithstanding the current E.U.

decision that allows data to be transferred from the E.U.

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.

In the United States, several states (including California, Virginia, and Colorado) have required us to update our policies and procedures to continue to protect data as required under those laws.

State and federal legislators in the United States continue to consider, and enact, new privacy laws, which may require further updates to ensure compliance.

Additional changes to data privacy laws and regulations around the world, including 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.

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If the revenue generated by international operations is insufficient to offset expenses incurred in connection with the maintenance and growth of these operations, our business, financial condition and results of operations could be materially and adversely affected.

In addition, in an effort to make international operations in one or more given jurisdictions profitable over the long term, significant additional investments that are not profitable over the short term could be required over a prolonged period.

In addition, in an effort to make

international operations in one or more given jurisdictions profitable over the long term, significant additional investments that are not profitable over the short term could be required over a prolonged period.

In foreign countries in which we operate, a risk exists that our employees, contractors or agents could, in contravention of our policies, engage in business practices prohibited by applicable United States laws and regulations, such as the United States Foreign Corrupt Practices Act, as well as the laws and regulations of other countries prohibiting corrupt payments to government officials such as the United Kingdom Bribery Act 2010.

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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.

and the E.U., risks and uncertainties remain as a result of the new trading agreement between the U.K.

following the U.K.’s exit from the European Union.

has agreed to “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.

Trade and Cooperation Agreement which sets out arrangements in areas such as tariff-free trade in goods.

The level of economic integration that existed while the U.K.

Member State has lessened with some additional bureaucracy and cost with customs formalities, VAT, excise duties and ATA carnets for goods moved between the U.K.

A review of the U.K.-E.U.

Trade and Cooperation Agreement is due to start in May 2026.

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

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flows occur and have contractual templates prepared.

We are in the process of reviewing the U.K.’s International Data Transfer Agreement laid out before the U.K.

and will monitor whether the U.K.

We have incorporated the U.K.’s International Data Transfer Agreement into any transfer from the U.K.

and will continue to monitor whether the U.K.

will implement an adequacy system, as proposed by the U.K.

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

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.

Starting in mid-2025 a European visa-waiver system (ETIAS – European Travel Information and Authorization System) will be required for visitors from 60 visa-exempt countries to enter 30 European countries for a short stay.

All United States citizens travelling to the E.U.

will need to register with ETIAS.

an Electronic Travel Authorization scheme (ETA) is now in operation for visitors from Qatar.

From February 22, 2024, it will be required for passport holders from Bahrain, Jordan, Kuwait, Oman, Saudi Arabia and the UAE.

By the end of 2024, ETAs will be a worldwide requirement for visitors who do not need a visa for short stays to the U.K.

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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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.

In December 2019, 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.

In December 2019, we agreed with the United States Department of Justice to extend and enhance 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.

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The Final Judgment was due to expire in July 2020;

in December 2019, we reached an agreement with the DOJ to clarify certain aspects of the Final Judgment and extend its duration through the end of 2025 (the “Amended Final Judgment”).

Under the Amended Final Judgment we may not (i) threaten to condition (or actually condition) the provision of Live Nation concerts on a venue choosing Ticketmaster, or (ii) retaliate (i.e., withhold any Live Nation concerts) in response to a venue choosing a ticketing services provider other than Ticketmaster.

in December 2019, we reached an agreement with the DOJ to enhance certain aspects of the Final Judgment and extend its duration through the end of 2025 (the “Amended Final Judgment”).

Under the Amended Final Judgment (i) we may not threaten to condition (or actually condition) the provision of Live Nation concerts on a venue choosing Ticketmaster, (ii) we may not retaliate (i.e., withhold any Live Nation concerts) in response to a venue choosing a ticketing services provider other than Ticketmaster, and (iii) Ticketmaster may not share with Live Nation promoters certain information about other concerts that Ticketmaster tickets.

In addition, pursuant to the Amended Final Judgment, (i) an independent monitor has been appointed to monitor and report to the DOJ on our compliance with the Amended Final Judgment, and investigate any potential violations thereof, (ii) we appointed an internal antitrust compliance officer and have conducted (and will continue to annually conduct) internal trainings to ensure our employees fully comply with the Amended Final Judgment;

(iii) we provided, and will continue to provide, notice to current or potential venue customers of the Amended Final Judgment and its restrictions on our business conduct;

and (iv) we are subject to an automatic penalty of $1,000,000 for each violation.

(iv) we are required to notify the DOJ of any ticket company acquisitions regardless of whether they would fall within the normal notification rules, and (v) we are subject to an automatic penalty of $1,000,000 for each violation.

We agreed to pay costs and fees for the independent monitor and the DOJ’s past investigation and enforcement.

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General Risks Relating to our Business and Operations

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

We may be adversely affected by the occurrence of extraordinary events, such as terrorist attacks or disease epidemics, including any resurgence of the COVID-19 pandemic.

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.

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

During the height of the pandemic, 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.

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

There can be no assurances that new outbreaks of COVID-19 or other epidemics 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.

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.

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In addition, the seasonality of our businesses could create cash flow management risks if we do not adequately anticipate and plan for periods of decreased activity, which could negatively impact our ability to execute on our strategy, which in turn could harm our results of operations.

Due to the unprecedented stoppage of our concert events globally in mid-March 2020 due to the global COVID-19 pandemic, we did not experience our typical seasonality trends in 2020 and 2021 even with the resumption of events late in the second quarter of 2021.

The following table sets forth our operating income (loss) for the last eight fiscal quarters (in thousands):

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

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors