Some
investors tend to benefit from cyclicality as seasons such as summer come near.
This is the case of companies that sell tickets for events and concerts, whose
sales increase during summer due to a higher demand of tickets for festivals
and concerts.
Therefore,
now might be a good moment to buy some stocks within this type of business. In
this post I will talk about three big companies whose sales have increased
since Covid-19 pandemic: Live Nation Entertainment, Inc., Evenbrite, and
Madison Square Garden Entertainment Corp.
1. Live Nation
Entertainment, Inc. is an American multinational entertainment company that was
founded in 2010 following the merger of Live Nation and Ticketmaster. It
promotes, operates and manages ticket sales for live entertainment
internationally. It also owns and operates entertainment venues and manages the
careers of music artists. As of early 2023, Live Nation's annual shareholders
report says the company has controlling interests in 338 venues globally and
believes itself to be "the largest live entertainment company in the
world," "the largest producer of live music concerts in the
world," "the world’s leading live entertainment ticketing sales and
marketing company," and "one of" the world's biggest artist
management companies and music advertising networks for corporate brands. Live
Nation Entertainment's business segments are concerts, ticketing, and
sponsorship and advertising. The company promotes and operates live music
events and manages artists under its concerts division Live Nation Concerts. Live
Nation Entertainment's artist management arm, called Artist Nation, is included
within its concerts division and also includes Front Line Management and Roc
Nation. Live Nation Entertainment owns and operates hundreds of venues
globally. The company sells tickets to live events through Ticketmaster.
2. Eventbrite
is an American event management and ticketing website. The company is engaged
in creating a platform to enable creators to solve many challenges associated
with creating live experiences. The service allows users to browse, create, and
promote local events. The range of live experiences includes music festivals,
marathons, conferences, community rallies, fundraisers, gaming competitions,
and air guitar contests among others. Their current track record is 5 million
of total events in nearly 180 countries, 284M total tickets, and around 800K
free + paid creators. The service charges a fee to event organizers in exchange
for online ticketing services, unless the event is free. In September or
October 2023, Eventbrite changed their pricing plans to limit free events to 25
tickets before they would begin to charge organizers fees. On March 18, 2011,
Eventbrite raised $50 million in Series E Financing led by Tiger Global. On
April 22, 2013, Eventbrite raised another $60 million in growth capital financing
led by Tiger Global and including T. Rowe Price. On August 23, 2018, the
company filed for a $200 million IPO.
3. Madison
Square Garden Entertainment Corp. MSG Entertainment is a world leader in live
entertainment, comprised of world-renowned venues and marquee brands. The
company hosts a variety of entertainment and sports events, delivering
unforgettable experiences for millions of fans each year. The company owns a
portfolio of iconic venues: New York’s Madison Square Garden, The Theater at
Madison Square Garden, Radio City Music Hall, and Beacon Theatre; and The
Chicago Theatre – each a prominent destination for unforgettable experiences
and events. With flexible seating capacities and configurations that range from
2,800 to 21,000, our venues enable us to showcase a broad array of compelling
sporting events, concerts, family shows, and special events that cover a wide
spectrum of genres. The company also manages professional sports teams. These
include the National Basketball Association's New York Knicks and their NBA G
League affiliate, the Westchester Knicks, and the National Hockey League's New
York Rangers and their American Hockey League affiliate, the Hartford Wolf
Pack. In September 2018, Madison Square Garden began work on a spherical music
venue in Las Vegas, called MSG Sphere Las Vegas, planned to open in 2021.
Earlier in the year, MSG announced plans to build MSG Sphere London, near the
Queen Elizabeth Olympic Park in Stratford. MSG Entertainment also features the wholly
owned original production, the Christmas Spectacular Starring the Radio City
Rockettes, which has been a holiday tradition for generations of fans at Radio
City Music Hall since 1933. The show’s enduring popularity is driven by the
world-famous Radio City Rockettes, the longest-running precision dance company
in America.
Although
they were not even profitable before Covid, their business growth indicates
strong prospects for their future performance, from both profitability margins
and profit growth perspectives. I suggest you check out their financials and
realize this kind of business is growing strongly as one of the most attractive
entertainment alternatives.
In terms of
pricing, you must realize they are not at the best moment to buy, but they are
still a good alternative you might get a good profit both in the short term
(due to their growing demand during summer) and also long term if considering
their performance in the last 3-5 years. Even if you are not so enthusiastic
about them in terms of pricing, I encourage you to follow up on them (just in
case they get cheaper for you) and also look for other smaller players in the
industry that might be trading at a more appealing price to you. In the end
this has always been a lifelong promising entertainment alternative and you
should consider it. From my perspective, it seems live events will also remain
resilient throughout the next decades as it has already done since the last
century.
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