Since the coronavirus pandemic began, the live event industry has come to a standstill. Following the postponements and cancelations of various live events worldwide, companies such as AEG, Ticketmaster and Live Nation have taken a massive hit. Now, it appears that the repercussions of the pandemic have greatly impacted Live Nation.
This week, Live Nation announced it has furloughed 20 percent of its North American staff.
Festivals and concerts worldwide have been canceled and rescheduled over the past few months due to the ongoing pandemic. This unforeseen hit the live industry has taken has caused quite a lot of problems. Companies including Ticketmaster and Live Nation are currently facing a number of lawsuits. This is due to their current refund policies that are making it difficult for ticket holders to get their money back. Due to these lawsuits, Live Nation and Ticketmaster are trying to restructure their refund policies after facing such backlash.
However, the backlash from ticket holders only hits the surface of the problems the companies are facing. Back in April, Ticketmaster announced it was furloughing hundreds of employees in North America in attempts to reduce costs.
Now it appears Ticketmaster’s partner company has also taken a massive hit financially. This week, Live Nation announced that 20 percent of its North American staff – roughly 2,100 of its 10,500 employees – have been furloughed. The furlough decision is part of the company’s $500 million cost-reduction measures as they deal with the current economic downfall.
Following these furloughs, 80 percent of Live Nation’s full-time staffers will remain on the company’s payroll. As well, furloughed employees will continue to receive medical benefits. However, furloughed employees will not receive their salaries.
As part of the company’s cost-reduction measures, CEO Michael Rapino announced that he would forgo his $3 million base salary. As well, the salaries of top executives would be trimmed by up to 50 percent.
“Given the uncertainty associated with the duration of current conditions globally, the company has launched a number of initiatives to reduce fixed costs and conserve cash,” the company says in its cost-reduction announcement. “As part of these cost reduction efforts, the company will implement salary reductions, with salaries for senior executives reduced by up to 50%, and the company’s CEO voluntarily forgoing 100% of his salary for the duration of the salary reduction program. Additional cost reduction efforts include hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs, and reduction or elimination of other discretionary spending, including, among other things, travel and entertainment, repairs and maintenance, and marketing.”
Earlier this month, Rapino reported that Live Nation doesn’t anticipate large scale live events to return until mid to late 2021. Due to the unknown nature of when live events will start again, Live Nation’s cost-reduction plan infers that more furloughs could happen in the future.
Due to the economic downfall of the live industry, Live Nation is planning to trial new alternatives to live shows. This summer, the company plans to try different concert formats including drive-in shows and fanless broadcasts.
Ticketmaster also recently unveiled “fan pods” which encourage social distancing at live events. The pods hold between 2-12 seats throughout a venue and separate attendees to avoid them mingling with one another. The “fan pods” were recently used at Arkansas’ first socially-distant concert that happened on May 18.
What do you think of Live Nation furloughing more employees? Let us know your thoughts in the comments below.