Los Angeles Music Scene: Live Nation reports Q4 results

Since Live Nation is such a fixture in Los Angeles and the local music scene (The Echo, Echoplex, The Regent Theater), I took a look at their Q3 financials back in November. The company recently released their Q4 earnings.

FINANCIAL REVIEW

As with my Q3 review, in terms of their financial health, I would say that cash is king. Here's what their earnings call said about that topic (Feb 25th): 

Looking at free cash and liquidity. We ended the fourth quarter with $643 million in free cash, which increased to $1.1 billion in early January with our debt raise. This, along with over $950 million of available debt capacity, gives us $2 billion in readily available liquidity. Our total free cash usage in the quarter was $308 million or $103 million per month. We had $97 million per month average in operational burn plus another $44 million per month of nonoperational cash costs to get us to $142 million average per month in gross burn. And then we had $39 million per month in cash contribution margin and ended up with a total effective cash burn of $103 million per month. 

Free cash in Q3 was $951 million so they went through $308 million of their free cash in the quarter. In terms of what they call gross burn, they averaged $142 million per month. This compares to Q3, which was at $175 million per month (which included $40 million in severance expense that would run throughout the year). Severance expense wasn't mentioned during the earnings call so it probably didn't have much impact on Q4 gross cash usage. 

Live Nation continues to find ways to cut costs as their gross cash burn average was reduced by $33 million a month. They likely accomplished this via further reduction in discretionary spending, "As part of this, we further reduced discretionary spending by another $50 million and closed 2020 with over $950 million in lower costs."

Is discretionary spending a synonym for employees? TicketNews (Jan 21) had this little note on headcount reduction:

Live Nation Entertainment has laid off more than 96 percent of its staff amid the ongoing COVID pandemic, according to a letter from a regional manager in Connecticut. The manager, Michael Andrews, referenced the cuts in a letter to a Connecticut utility commission asking for forgiveness in over $1,000 in late fees associated with unpaid bills from 2020.

Live Nation is “hemorrhaging money each month,” according to Andrews. As a result, it has either furloughed or laid off thousands of employees – from a pre-pandemic number of approximately 18,700 to a current roster of around 700 – 96.25 percent of the total. This number includes the finance team that approves payment of bills such as the one he was appealing for forgiveness on the late fees being charged.

In my Q3 analysis, I focused on gross burn, but via the above quote I learned that there is an off-set to this called cash contribution margin. They have something called total effective cash burn, which comes out to $103 million per month -- and this ties out to the $308 million reduction in free cash.

Based on their Q3 cash burn of $175 million a month, I figured they had enough free cash ($951 million in free cash + 950 million in debt capacity) to last them 11 months, basically August, 2021. It now looks like Live Nation is very well set up on the cash side to go beyond August as they ended the quarter with $643 million in free cash + they still have the $950 million in debt capacity + they added $500 million in debt in January (wouldn't show up in their Q4 financials). Of this $500 million, $75 million was to repay a loan so my assumption is that the net is $425 million. So $643 million + $950 million + $425 million = $2.018 billion. With $2 billion in free cash and an effective cash burn of only $103 million per month, they could survive well into 2022 without live concerts.

One caveat to that $2 billion in free cash was their acquisition of Livestream Platform Veeps. This was done shortly after the issuance of the $500 million in debt. They didn't get into how much they paid for the platform during the earnings call. They did say the following about VEEPS:

This is just now an opportunity with Veeps to do some of that direct-to-consumer on the club shows, amphitheater, festival shows that we think will have that added capacity and demand that will help increase some of the revenue for the artist. So we think it's kind of like a T-shirt and merchandise in a VIP platform. It's another incremental revenue stream to the current physical show.

I guess we'll need to wait until their Q1 results to back into an estimate of how much they paid for VEEPS.

RETURN OF LIVE MUSIC

Of course, what people care about is when will live music return? It looks like the focus for now is outdoor amphitheaters:

So we're feeling more optimistic than we were a month ago. Lots of artists are calling and looking at how we start up in July, August, September, maybe move things a month. So for right now, we still believe that we'll have enough open throughout the U.K., Australia, Canada, U.S., to keep what we have on the books and the amphitheater booked for now. We might have some certain states that might not be ready, but we have enough states, we think, and enough artists willing to play the open slots if we get to that level in the right markets. So right now, we think we have enough artists. And as long as these states open up to the right capacities, we can start mid-summer into Southern U.S. We could go all the way to November . . . So we have not, as to date, done a lot of work in the 0 to 50% capacity business. We don't see that as a viable model to ramp back up fixed cost. So we think we're close enough though where we are with COVID and with all the governors in the states we're talking to, that there will be a clear outline to a 75% to 100% outdoor green light in '21. So we think we're better off waiting for a high bar capacity moment in most of the states to ramp up and talk to the artists about getting paid properly.

Is this really more optimistic than a month ago? On CNBC (Dec 7th), Live Nation President Joe Berchtold said: In the key US, Western European markets, it continues to be our expectations that by next summer we're back with our major outdoor shows, our amphitheaters here in the US, festivals globally, we'll be able to do those shows.

Is there really any different from that CNBC interview and the Q4 earnings call statement of July, August, September?

Anyways, it definitely seems like the focus will first be on outdoor shows. Also, there seems to be a bit of political diplomacy in the discussion of which states won't open up soon: "We might have certain states that might not be ready, but we have enough states . . . " Then there is the comment about Southern U.S. Reading between the lines, is there a belief at Live Nation that California will be one of those states that won't be ready for outdoor events (at 75% capacity) by summer? 

Now my interpretation of this is that Live Nation will start concerts in the Southern states and then spread to other states (California) by November. I sent a Variety link to a follow LA music scene person and he stated that his interpretation was that Southern states could see their season last from July through November and that it wasn't necessarily true that California would need to wait until after tours finish their Southern legs. I noticed that there was an interesting grammar change between what was written in the transcript versus what Variety has: an assumed period between "U.S." and "we."

Variety (Feb 26) has:“we can start in midsummer and in the southern U.S. we can go all the way into November.” The transcript reads: we can start mid-summer into Southern U.S. We could go all the way to November.

Kind of changes the interpretation. Anyways, it really does seem that the Southern states will get first dibs at live music.

Also, I think the 75% capacity issue could also be applied to local indoor venues. It might not make financial sense for The Echo, Echoplex and even non-Live Nation venues like the Bootleg Theater, Hotel Cafe, and Moroccan Lounge to open up at less than 75% capacity. Their additional fix costs (labor, electricity, water, etc) might not cover a situation where they're stuck at 50% capacity. This is something to keep in mind as Los Angeles starts to open up from this pandemic shutdown. 

 

New Music Alert: Mars Rodriguez' "Black Summer"

Mars Rodriguez has a new video out for her song "Black Summer." The video was shot across Los Angeles and has a red-pink hue to it. For a brief moment you get a glimpse of her symbolic skeleton. As she walks across Los Angeles, she is alone, often with cars speeding pass. All the drivers, perhaps tuning in to their own favorite music, are unaware that Mars Rodriguez is suffering through a "Broken Heart." For her; however, maybe she wants to suffer alone through her broken heart. As the video comes to a close, a metro train comes by, filled with people. Instead of getting on it, she allows it to pass her by.

Take a listen and let Mars Rodriguez take you on a rock journey through a broken heart.

Photo taken at the Six at Six series

New Video Alert: Bone Acre's "Sorrow"

Bone Acre just recently her video for "Sorrow." For the song, she brings her desert rock sounds and intertwines them with pain. The result is a passionate cry with lyrics such as "Love can't last a life time so they say."

The video is filmed in the desert with Bone Acre surrounded by Joshua trees. You can see her standing at times on a lonely dirt road and at other times on a remote rock formation looking out into the distance. She is at times dressed in white while clutching a human skull (fake, of course). All this while the beats are methodical and purposely kept at a solemn volume. To keep us with some hope for the future, images of blooming flowers at the open and close of the video are superimposed on top. Though death can bring great sorrow, perhaps the cycle of life can bring hope.

 

taken at Harvard & Stone

New Music Alert: Nikki Lorenzo's "Show Me the Money"

Nikki Lorenzo brings a jazz showtune style to her music, which is on full display in her new song "Show Me the Money." The song lyrics start out with, "I saw you for the first time in over a year and you still have me crippled in the language of fear. It dawns on me that you're nothing but a disease." 

On an Instagram post, she explains, "This song is about being revisited by a wound in the form of a lover and finding your power, and sense of self worth, that ignites you to finally move on from what no longer serves you."          

photo take at Club Tee Gee

New Album Alert: Suzie True's "Saddest Girl at The Party"

Suzie True has a new album out called "Saddest Girl at The Party." I first caught this band at The Smell in 2019 and I was very impressed and put them on my annual (2020 getting skipped) My Favorite "New" Bands/Artists of 2019 list. Got to say, one never knows what awesome bands you'll catch at a DIY space.

The above video is for their song "Not Fair," which is on the album. The video shows them enjoying life on tour. It starts with them doing some exercising to get fit for the tour. Then has them driving up the coast of California and into Washington State where I'm going to guess that most of the video was shot. There is a brief shot of their name up on the billboard of Firefly Lounge (which Google tells me is in Washington St). The video just shows the fun nature of this pop punk band.

Photo take at the Echoplex

Los Angeles Music Scene: The Satellite's Instagram Page

The venue known as The Satellite has shut down. I'm not sure if it is official, but there is news on who is now leasing the building. When that info is officially out, I will do a post on it. Unfortunately, the new renters are not music oriented.

But though the physical location is gone, the venue's Instagram page will still be in use. The owner of The Satellite has transferred the ownership over to a couple individuals closely tied to the venue. I'll probably do an update when it is formally announced.

Anyways, the first hints of what will become of the Instagram page was recently announced: Club turned hub, The SatelliteLA aims to keep the music community connected with content created by the artists & musicians we love. Starting in March tune into SatelliteTV for original weekly shows. There's more to music than just music.

New Music Alert: Steady Holiday's "Living Life"

Steady Holiday has a new single called "Living Life." 

From their Instagram: Living Life might be the most straightforward and (dare I say) joyful song I’ve ever written, and it’s about tryyyying to live with that same intention. To do what comes naturally, appreciate moments as they happen, and not get in your own way. 

The music is delicious composition. It will have you wanting to dancing in an open field with arms spread out in joy. 

Photo take at The Satellite

New Music Alert: Iress' album "Flaw"

Iress recently released their album "Flaw." The album was produced and engineered by Sarah Tudzin of illuminati hotties. It is a dark shoe-gaze sound with soaring gothic chants that bridge the lyrics of the music. There is also a hint of a darker version of Enya in the vocals. Listening to the music has one thinking of walking through a dark forest with potential dangerous creatures lurking at every turn. The longest song on the album is "Shallow," coming in at slightly over 7 minutes. It combines all those elements along with crashing percussions. 

photo taken at The Resident

Online Quarantine Sets: Version 82

Lisa Remar did a short 10 minute set on WFNM. Recently, WFNM has been hosting musicians for quick 10 - 15 minute sets instead of their 30 minute 4 - 6 band/artist line-ups from 2020. Her set was played with her off to the side of the camera. It was so that everyone could see her guitarist, as well. She was sitting on the floor. He was on a couch. When she ended each of her songs, she'd throw up finger signs. And when she hit the high notes, her hands would rise up. Obviously, I found myself overly interested in what her hands were going to do next. Anyways, she opened her set with the song "Sonny." There was a campfire manner to the song and the set in general. I could see being in the mountains and around a campfire. And they'd be entertaining their friends with some acoustic tunes. Tunes that were just slightly turned down in volume so as not to scare off the squirrels. 

New Music Alert: Milly's "Star Thistle Blossom"

Milly recently released their "Star Thistle Blossom" single. The band has this nonchalant approach to their garage-skateboard inspired rock. Throughout the song, one wonders if they realize or maybe even care how sonically crafted their music is.    

"Hope knows that I've lost it all alone. I hope that you know that this will not be long." Another way to say that when life gives you lemons, make lemonade. Yet, the lyrics go deeper, talking about how life is about growth and that hope never dies.

Photo taken at The House of Machines

Online Quarantine Sets: Version 81

Erin Kirby played a short 15 minute set on WFNM. She opened up with her song "Practice Girlfriend." She sings from the guts and let's her facial expressions highlight her emotions. Her vocals can quickly scale both volume and octaves at a moment's notice. One could tell she was from the South as her accent gave her away while she discussed her music such as writing one song via Zoom. She ended her set with an encore, singing Tori Kelly's "All In My Head."

Of interest, she was briefly on American Idol Season 18. She made it to Hollywood, but unfortunately got eliminated. But hey, her vocals definitely got her there in the first place.

New Music and Video Alert: elle belle's "Everyone Knows (But They Won't Tell You)"

 

elle belle just released a new music video for his song "Everyone Knows (But They Won't Tell You.)" Lyrics such as "I'm too nice for punk rock, I'm too angry for rock & roll." reference how hard it is to please everyone listening to your music. 

He writes in his press release: "Everyone Knows..." was written about the impossible feat of trying to be everything to everyone and not excelling at any of it. There is so much time spent switching lanes that we end up in the middle of the road and Elle Belle is asking how many of us feel this way? Elle Belle's lyrics are straightforward statements such as. "I’m too strange to follow, But not desperate enough to fold I’m too scared to let go, But so miserable in control....and Everyone Knows but they won't tell you." This is a refreshingly honest song in a world where we are consuming life's highlight reels on social media ...instead of the truth. But don't we all feel like this?  

Though the song references punk rock and rock & roll, I'd argue it is a great blend of pop sounds. 

photo taken at the Resident

A Movie Re-review: Boyhood

I wrote the below review of Boyhood back in 2014 on my original blog site. I recently re-watched the movie and decided to re-look at what I wrote and add some negative critiques.

Boyhood. The movie starts out with five year-old Mason (Ellar Coltrane) staring up at the Texan clouds. He’s waiting for his mom (Patricia Arquette), who is talking to his teacher. Mason is apparently a bright kid, but just unfocused. He lives with his mom and sister, Samantha (Lorelei Linklater), who is a couple years older than him. His parents are divorced (it sounded like for over a year) and his dad (Ethan Hawke) is currently working in Alaska. The family moves to Houston soon after this scene. The dad also returns from Alaska and relocates to Houston, as well.

From here, the movie takes us on a 12+ year journey over the course of around 2 hours and 45 minutes. And no, new actors and actresses do not replace Ellar Coltrane and Lorelei Linklater. This movie, directed by Richard Linklater, was filmed over the course of 12 years. Maybe you should read that again: filmed over the course of 12 years. Over this time frame, we get to see these characters develop and grow in fascinating directions.

Though the movie is called Boyhood, it really feels that at the beginning this movie should be renamed Family. For much of the early going, the more interesting characters are Mom and Dad. Mom and Dad got divorced largely due to the fact that Dad was too immature and young to handle a life with two children. In search of someone with a more disciplined life, Mom gets involved with two individuals who definitely know a thing or two about discipline. First, she marries and divorces a college professor named Bill Welbrock (Marco Perella); and later, for a time has (I believe as I didn’t see a wedding ring) a live-in boyfriend, Jim (Brad Hawkins), who served in the military. Unfortunately for her and her children, both are alcoholics. Mom also grows up with a desire to achieve, but ends up as someone who has a nice paycheck, but has become house poor . . . essentially ending up where she started, but just better educated. Dad meanwhile lives a musician’s life in Houston. While there, he slowly turns himself into the man that Mom probably would have wanted to marry: a man with discipline, a touch of the wild side, and definitely not a drunk. Dad also goes from a big time liberal who encourages his two children to put up Obama lawn signs to one who (dare I even say it) probably considered putting up Romney signs in the next presidential election – partially driven by the fact that his second marriage was to a woman that gave off the impression of being a conservative Christian.

During the middle of the movie, a title called Siblings is more appropriate. For much of the movie, until she leaves for college, Samantha is just as important in this movie as Mason. There is a real tender moment in the movie when Dad comes back from Alaska. He is in Mason’s room. Mason is showing him arrowheads and snake vertebrae that he has collected. Not wanting to be left out, Samantha comes into the room with some photos. The Dad tries the impossible, paying attention to both of his children. And though it is impossible, he does his best. Yes, Samantha is not the child who is ignored in favor of another. Neither parent has a favorite, they love both children equally.

In the beginning and middle of this movie, I call it Family and then Siblings, because in some ways I found Mason’s childhood life less interesting than the others in his immediate family. I’m not saying I didn’t like Ellar Coltrane’s acting as a child actor and a tween. I’m just saying I found myself connecting with Mason later in his life as he was in his high school years. He still had those early traits with him that you saw at the beginning of the movie where he was just a bit of a scatterbrain. But in other ways you saw his passion in life (photography) and that was thrilling.

This is a movie that grows on you. This isn’t a movie that digs deep into a brief period of time such as a movie like August: Osage County. You only get maybe twenty minutes worth of storyline per selected year in this family’s life. What this movie does do is give you the breathtaking landscape of an individual’s youth: the good, the bad, the banal.

Highlight: One of my favorite Los Angeles bands is Family of the Year. I believe the first time I saw this band was September, 2010. They were doing a residency at Silverlake Lounge. Their song ‘Hero’ is featured in the movie and I say it is placed perfectly. I couldn’t help but sing along as Mason was heading off to college to find himself in the state of Texas – and yeah, maybe I irritated my fellow movie goers as I sung along.

Guess: Dad (Ethan Hawke) has a moment with his teenage son where he discusses his only personal growth and how it related to Mason’s Mom. Was this a moment where Ethan Hawke was acknowledging his own personal short-comings in regards to his marriage to Uma Thurman?

Complaint: During a drive to Austin, Mason discusses Facebook with his girlfriend. Ah . . . isn’t Mason a photographer? Shouldn’t the discussion have revolved around Instagram, which I believe based on the timeline would have fit.

**************************

Updated based on recent re-watch:

On second watch, I really did not like how the mom was portrayed. Let's contrast this with the dad. The dad is definitely someone who improved his life over the years. He settled down and was in what appeared to be a happy marriage. Even though he only saw his kids on occasion, he was still a solid part of their lives. He even was philosophical, admitting that adults were trying to figure life out just as much as children. In terms of the mom, she started the movie looking to improve her life. She immediately moved the family to Houston in order to get a college degree and eventually got a masters degree. At the start of the movie, one would think that the dad would be a slacker for the rest of his life while the mom would improve her life. Instead, we appear to end the movie with a mother who is broken. Three failed marriages. Forced to sell her house (due to a drop of family income resulting from the third divorce). And what one might describe as a mental breakdown when Mason leaves for college. I get the housing situation was an attempt to show the impact of the housing bubble. Yet all that could possibly go wrong in one's life seemed to occur to the mom and the movie seems to end with her feeling defeated. Let me emphasize something: both parents realize at the end of the movie that they don't really understand life that well, but the dad views it as a challenge while the mom views it as a defeat. Perhaps there was a glimmer of hope there in terms of future love as Mason's former boss seemed very intrigued by the mom.

I also found another theme of the movie to be a bit disturbing on second glance. Perhaps I found it a touch disturbing when first watching the movie, but certain events in the Los Angeles music scene has made it more of an issue for me. The Los Angeles music scene has had to deal with accusations of grooming and statutory rape claims in 2020, which provide the context. There is a theme in the movie where older women are attracted to Mason (actually throughout his life girls and women find him attractive). There are two distinct moments I want to highlight. First, when his mom has a house party for her college students one of her students hangs out with Mason in his room. She is definitely doing some flirting. How old is she? Probably 19 or 20. I make that assumption based on the following: We know that the mother has a masters degree and is probably teaching at Texas State University San Marcos. With a masters degree she probably isn't teaching graduate students and more likely teaching freshmen or sophomores. Based on the timeline, Mason was 15. The scene is awkward and has that Cherry Glazerr storyline feel to it. Even more awkward is when Mason has his graduation party. His mom's friend, a fellow professor, makes the moves on Mason. She's likely in her early to mid 40s like the mom (the movie mentions that the mom was 24 when Mason was born, which makes her around 42 when he graduates from high school). The friend does show up in the background throughout the time in San Marcos, but there doesn't appear to be any prior interaction between Mason and the friend until the end of the movie. Was there some grooming scenes during his younger years that didn't make the final cut of the movie?    

Minor final thought: the movie is a lengthy 2 hours and 45 minutes. I wonder how much didn't make the cut. Back to the graduation party, the dad's brother just shows up in the movie. Like many of the characters in the movie, was the uncle always in the background storyline, but just didn't make the final cut until the end? I do believe that his character (was his wife with him?) is the only character in the movie that we see for the first time (perhaps Mason's high school friend, as well, though he might have been in other high school scenes).

Final final thought: Back to my comments about contrasting the mom and dad, during that graduation party there is a recognition that only one of the mom's three husbands are at the party while both wives of the dad are there. Just another signal about how these two adults have been able to deal with life. Now perhaps I'm being too harsh on the direction the movie is taking. It is highly possible that the point of the movie is that taking the more artistic approach to life leads to a more satisfying life -- the mother improved her life via an intellectual improvement while the father was a musician who finally had to take a regular job in insurance. The movie's message might be that pursuing your dreams (even if you fail) leads to that satisfactory life. Of course, that might contrast with the final message of the movie, which is that moments seize the person instead of people seizing the moment.

Quarantine Online Sets: Version 80

Sam Creighton played an online set on WFNM this past Thursday. I loved how she twirled her vocals when she hit her high notes. She knows how to let her vocals rip. Her boyfriend was playing backup on the piano and they shared the piano bench. One of her songs is called "Two of Me." It is a personal song about this world of COVID-19 when family members in Boston were having health issues and she was in Los Angeles and there was the general concern about just jumping on a plane to be there.

It was a short 15 minute set, but filled with memories. 

A comment left behind during the set that came from @Brandoncolbein sums it up: I'm at the front row with my hands up!!!! Imagine this is a real life concert