The two live entertainment promotion firms that overwhelmingly dominate the global concert industry suspended all touring activities on Thursday because of the coronavirus pandemic.
Live Nation Entertainment and AEG Presents, the leading promoters of events from massive festivals such as Coachella Valley Music and Arts Festival in Indio to hundreds of shows annually at sports arenas, theaters and clubs, both said they would halt events beginning this weekend at least through the end of March.
“This is something none of us have ever seen,” said a longtime concert industry executive who asked not to be identified. “We’ve never dealt with anything like this — not Ebola, not SARS. … It’s just a mess.”
A vast numbers of musicians will pause their tours while promoters, artists, mangers, booking agents and others determine their next steps.
Celine Dion and Billie Eilish are among the artists who had been scheduled to play in Southern California in the days ahead.
On Thursday, key figures in several corners of the live entertainment business announced the formation of a global task force to help steer the industry through these uncharted waters.
The task force includes Live Nation CEO and President Michael Rapino, AEG President and CEO Dan Beckerman, AEG Presents Chairman and CEO Jay Marciano, Creative Artists Agency Managing Partner and Head of the Music Division Rob Light, William Morris Endeavor Partner and Head of Music Marc Geiger, Paradigm talent agency founder and Chairman Sam Gores, Paradigm Head of Global Music Marty Diamond and United Talent Agency Global Head of Music David Zedeck.
"At this time, we collectively recommend large-scale events through the end of March be postponed," the task force said in a joint statement issued Thursday. "We continue to support that small-scale events follow guidance set by their local government officials. We feel fortunate to have the flexibility to reschedule concerts, festivals and live events as needed, and look forward to connecting fans with all their favorite artists and live entertainment soon."
On Tuesday, AEG, which partners with promoter Goldenvoice, announced the postponement until October of both the Coachella festival, which plays out across six days over two weekends in April in front of 125,000 fans per weekend, and its smaller sibling event Stagecoach, the largest country music festival in the world, which draws 80,000 for each of its three days.
Earlier this month, Live Nation Entertainment President Joe Berchtold reminded investors during a conference call that about 70% of the company’s business is generated from June and beyond.
“So, depending on what you read today,” Berchtold said, “it gives us some comfort that we’ve got a little time to play out.”
Stephen Glagola, vice president of equity research at Cowen & Co., said while “the near-term impact could be quite severe” to Live Nation, investors have overreacted to negative macro developments in the past that have impacted the business very little.
“Pending when COVID-19 concerns dissipate, the live concerts industry has favorable supply and demand tailwinds that we expect to continue and help support growth,” Glagola told The Times by email. “Today, musicians are primarily reliant on touring as their main earnings driver, ensuring an adequate supply of quality content for fans year after year, and the experience economy is driving increasing demand for concerts.”
In less than a month, Live Nation’s stock has dropped in value more than 50%, from a recent high of $76.08 on Feb. 19 to $36.20 at the close of trading Thursday. AEG Presents is a subsidiary of the Anschutz Entertainment Group, which in turn in is a subsidiary of the Anschutz Corporation, the world's largest owner of sports teams, including ownership interests in the Los Angeles Lakers, the Kings and the Sparks, and sporting events. The parent company is controlled by billionaire businessman Philip Anschutz. AEG owns and operates Staples Center in Los Angeles.
Some analysts said they expect AEG and Live Nation will be able to financially survive, but smaller concert promoters globally could be hurt if concerns about the coronavirus continue to cancel or postpone concerts in the months to come.
"Companies like Live Nation and AEG have balance sheets and plenty of cash liquidity, so they are going to be able to weather the storm," said Brandon Ross, a partner and media and technology analyst at LightShed Partners. "The longer this goes on, the more difficult it’s going to be, which is probably going to breed a larger opportunity for the likes of Live Nation, which is a real consolidator in the industry, to grab even more market share on the other side."