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Live Nation Entertainment Inc (NYSE:LYV)
Q3 2020 Earnings Call
Nov 5, 2020, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, everyone. My name is Erica, and I will be your conference operator on today's call. At this time, I would like to welcome everyone to Live Nation Entertainment's Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Following management's prepared remarks, we will open the call for Q&A. Instructions will be given at that time.

Before we begin, Live Nation has asked me to remind you that this afternoon's call will contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company's anticipated financial performance, business prospects, new developments and similar matters.

Please refer to Live Nation's SEC filings, including the risk factors and cautionary statements included in the company's most recent filings on Form 10-K, 10-Q and 8-K for a description of risks and uncertainties that could impact the actual results. Live Nation will also refer to some non-GAAP measures on this call. In accordance with the SEC Regulation G, Live Nation has provided a full reconciliation to the most comparable GAAP measures in their earnings release. The release, reconciliation and other financial or statistical information to be discussed on this call can be found under the Financial Information section on Live Nation's website at investors.livenationentertainment.com.

It is now my pleasure to turn the conference over to Michael Rapino, President and Chief Executive Officer of Live Nation Entertainment. Please go ahead, sir.

Michael Rapino -- Chief Executive Officer and President

Good afternoon, and thank you for joining us. There have been no major changes in our business conditions or outlook since the last time we spoke. And while we see signs of promise around the world as some live events return, most regions we operate in continue to have various restrictions on live events. For now, we continue to maintain a strong cash management discipline while planning for the ramp-up to resume live shows as soon as possible. Joe will have a further update on cost and cash management efforts later in the call.

We also continue to see strong fan demand across the board. Our sales and survey data tell us fan demand will be there when the time is right. Our refund rate on rescheduled shows remained consistently low with 83% of fans globally keeping their tickets. Our recent global survey indicates that 95% of fans are planning to return to live events when restrictions are lifted, the highest point of confidence since the start of the pandemic. Festival on sales for next year have been strong, with EDC Las Vegas 2021 selling out in 24 hours at a higher capacity than last year, and ticket sales for Redding, Creamfields and Isle of Wight festivals pacing ahead of last year.

And we are encouraged by the enthusiasm for recent events and gatherings that have started to take place, including our first sold out arena tour with 20,000 fans in New Zealand, where business is headed back to normal. Meanwhile, we are working on our roadmap to get back to live safely. We are encouraged by progress on testing technology, treatments and vaccines, which will help us build our plans. We still expect shows at scale next summer, but recognize that some exact timeline of this return will vary by region, so we continue to focus on remaining flexible. In preparation, there are two areas we are focusing on.

On the technology front, Ticketmaster is creating the tools we need to make sure live events can deliver a variety of safe precautions when returning. New products such as our social distancing seat mapping tool and timed entry technology have been created to give venues the flexibility to plan how to manage everything from venue access to box office interactions. Existing products, including our SafeTix digital ticket technology can fulfill new needs, including being a key facilitator for contact tracing.

And the ability to integrate third-party applications with our digital ticketing platform enables a range of customizable features, from contactless concessions to testing and health questionnaire tracking. On the concert front, Live Nation is developing a set of standards for executing shows at our venues. We are collaborating with health experts to develop show guidelines to put in place procedures, which can adopt to various situations across all regions.

From venue sanitation procedures to fan-friendly policies on ticket purchases and the latest testing options, we are setting standards that will give the fans, crews and artists peace of mind before, during and after the show. As we look ahead, it is clear the path to live will not be a straight one. As such, we will maintain flexibility and focus on innovating during these times. On November 19 at our investor event, we will outline, in more detail, the opportunities we see emerging for our business.

With that, I'll turn it over to Joe.

Joe Berchtold -- President

Thanks, Michael, and good afternoon, everyone. We've added some additional tables at the back of our earnings release. So this quarter, I will hit the key numbers as opposed to reconciling every number as I did last quarter. As Michael noted, we've continued to strengthen our financial position during the third quarter, and all the key numbers are in line with or better than what we forecast last quarter. As a result, we are confident that our actions taken to cut costs and increase liquidity will provide us with the runway we need until the time is right to bring shows back.

As part of this, we have further reduced all discretionary spending by another approximately $100 million and have now lowered costs for this year by over $900 million and reduced our cash usage by $1.5 billion relative to our pre-COVID plans. With these reductions, we have lowered the estimate on our operational cash burn rate to $110 million per month and our gross burn rate to $175 million per month, on average, for the last nine months of the year and prior to the benefit of contribution margin generated by the business.

Included in our gross burn estimate is approximately $40 million in severance expense estimated through year-end, which we expect to generate over $200 million in annual run rate savings. Our free cash at the end of the third quarter is $951 million. And along with over $950 million of available debt capacity, we have $1.9 billion in readily available liquidity. At the same time, refund rates for Q3 remained low at 17% globally. As a result, deferred revenue is at $1.4 billion as of the end of Q3, and we have increased our forecast than what we expect at the end of the year, now $1.4 billion.

Turning to our Q3 results, starting with AOI. Our AOI loss for the quarter was $319 million, which consisted of $337 million in operational cash burn, $50 million in other noncash fixed costs and $68 million of contribution margin, which included $73 million from operations, along with other onetime items. One point to note here is that this CM from operations includes our sponsorship business, where we've been able to maintain 90% of the commitments that were in place at the end of February.

The bulk of the sponsorship moved into 2021, but some of it was repurposed into other assets, including streaming concerts. Looking at free cash. We ended the third quarter with $951 million in free cash compared to $1.8 billion at the end of Q2, in line with what we expected and consistent with what we told you last quarter, which translates to an $821 million reduction in our free cash metric for the quarter. As part of this, we had a reduction in free cash of $333 million due to working capital timing, which is part of the $415 million flip we told you last quarter would be happening in Q3 and Q4.

We expect the remaining $80 million of this timing impact will affect free cash in Q4. The majority of this timing shift resulted from shows scheduled for Q3 of 2021 shifting from long-term deferred revenue to current deferred revenue, so is an accounting shift as opposed to actual use of cash. As a result, our total effective cash burn was $488 million for the quarter, or approximately $160 million per month, which aligns with our gross cash burn, net of contribution margin generated in the quarter.

Now ticket refunds. As I indicated, the global refund rate for Live Nation concerts that are rescheduled and are in or have gone through a refund window is 17% through the end of Q3. Festivals have generally canceled this year's event. But for festivals where fans can retain their tickets for next year's show, 63% of fans are doing so and keeping their tickets. A bit more detail on deferred revenue, which is tracking ahead of where we told you last quarter we were going to be.

At the end of the third quarter, deferred revenue for events in the next 12 months was $1.4 billion. Of the $421 million increase, $383 million was due to a shift from long-term deferred revenue to current deferred revenue for concerts rescheduled to Q3 of 2021. At the end of the third quarter, we still had $103 million of long-term deferred revenue, most of which will flip to short-term deferred revenue by the end of the year.

Given this, along with the projected Q4 outflow of $74 million from additional ticket refunds, we now forecast deferred revenue of $1.4 billion at the end of the year prior to any additional ticket sales. Given the uncertainty in the market on timing of shows returning, we cannot give any more guidance beyond the burn rates and refund levels we just gave you.

With that, let's open the call for any questions for Michael, Kathy or me.

Questions and Answers:

Operator

[Operator Instructions] Thank you. And your first question is from David Karnovsky with JPMorgan.

David Karnovsky -- JPMorgan -- Analyst

Hi. Thanks for taking the question. Just recognizing that 2021 may be a fairly unique year in terms of how concerts and festivals are structured. But when you look at2022, just the long term general, are you confident that the general economics that drove the concert industry will return, or should investors expect some sort of change as it pertains to relationships with artists, with venues, or really on any front?

Joe Berchtold -- President

I think -- this is Joe. Thanks, David. I think the baseline economics, the promoter, the artists, the venue, those economics will not materially change structurally going forward. I think what you'll see, and we've hit a few points, is we've spent this time continuing to think about our business. We've looked at how it is. We can take some costs out. And I gave you some numbers on over $200 million in reduced run rate. And we've also spent our time thinking about just how does each piece of the flywheel operate a bit better going forward, and how do we keep thinking about new ways to drive the overall economics of the business. But don't see any change in the core historical dynamics on the key players.

David Karnovsky -- JPMorgan -- Analyst

Okay. And just a follow-up on the $200 million. Should we think of that as permanent cost savings or some of that comes back when the industry begins to scale up again?

Joe Berchtold -- President

I think as we look at 2021, we expect to see those savings to be largely in place. And then 2022 is -- we've got to wait and see exactly what the scale is. If 2022 is as big as we think it could [Technical Issues] then we'll see what costs are needed. But we think that the bulk of this flows through the business and is the structural savings.

David Karnovsky -- JPMorgan -- Analyst

And then maybe just to ask one a little bit long term and make sure an area that's gotten a little bit more attention lately is virtual concerts. I was just wondering if you could update your views on the opportunities for the Live Nation, either as it pertains to selling incremental virtual access to your shows or just continuing to stage your own productions, like you've done recently with Live From Home? Thanks.

Michael Rapino -- Chief Executive Officer and President

Thank you. It's Michael. We believe that virtual is a great kind of a complement to the core business. There's going to be always Beyonces and BTSes and Billie Eilishes in the world that can probably do like the old school pay-per-view, if you think of it that way. There's always a few global superstars that probably can go direct and drive some significant dollars. But generally, this business, we think, is a complement to and a promotion to their core concert.

So we think it's a great opportunity. Listen, we've been dabbling in virtual for years, whether it was streaming through Twitter and Yahoo! and streaming ourselves for sponsors. So we've been streaming our festivals on YouTube for years. We now look at that as a continuation of that. And we think going into '21 and '22, we'll be streaming a lot more of our concerts to fans that maybe either can't show up at the event.

Or some that may want to still stream on our app when they're at the event because there's some added value of digital backrooms or camera angles, etc. So we think it's a great complement. It helps us probably drive a few incremental dollars per show. And also it has always been a great tool for sponsorship fulfillment.

David Karnovsky -- JPMorgan -- Analyst

Thank you.

Operator

Your next question is from Brandon Ross with LightShed Partners.

Brandon Ross -- LightShed Partners -- Analyst

Hey, guys. What I really want to know is who won Georgia. But short of that, I wanted to take a step back on Ticketmaster. With Jared's departure, you promoted your Head of International, who's actually based abroad. Is there anything to -- is there anything to read into that? Is international a bigger focus? And more broadly, maybe if you could discuss the strategic priorities at Ticketmaster under the new leadership.

Michael Rapino -- Chief Executive Officer and President

Thanks, Brandon. There's nothing to read. This is like everyone is probably saying COVID excelled any strategy you had, in our case, while we've been sitting tight, we've been able to do a bunch of restructuring and rethinking of the business that we had planned over the next three years that we were able to do in the last three months. So going global on Ticketmaster was always the number one priority. We always knew that our greatest opportunity for kind of the TAM on Ticketmaster is going to be outside of the U.S. It's an incredible, powerful brand.

We've expanded into markets where Live Nation has content. It's an allocation market. So as your concerts grow, you can feed your ticketing business. So it's been a huge opportunity. We haven't been successful at getting the global technology architecture excelled as fast as we wanted. The U.S. is always such a big kind of drag on resources when we're running at full steam, that we always get that -- projects get slightly pushed back to solve the latest U.S. technology need.

This just let us excel the strategy that says we're going to now have one global technology stack, a much better efficient architecture around it, common global products that we can roll out at once and help excel our international expansion. So I'm, myself, on the product when I moved from Toronto to London and lived there for five years, I think it was the single reason Live Nation is what it is today and plays global, is when you see from the outside in, all the opportunity, it gets you thinking differently.

So I believe that the fastest way we would grow Ticketmaster to a global brand was let someone from the global side who's working the business every day, take the reins and drive that product. So we're -- we've been working with Marc for years, and they've been having a product strategy to get there. We just excelled the leadership team to do it now. As far as -- sorry, go ahead.

Brandon Ross -- LightShed Partners -- Analyst

Go ahead. No, you go ahead.

Michael Rapino -- Chief Executive Officer and President

Yes. I think the priorities haven't changed, although when we get back to business, they're going to continually be about -- we got an incredible two businesses at Ticketmaster. We're -- at the core, we're an enterprise platform, white labeling teams and venues all around the world. So whether it's the NFL or the Phoenix Suns or ultimately, artists, we're a great software platform to power your ticket needs. And we're going to get better and better at that in terms of our do-it-yourself and white labeling and empowering artists and venues and teams to deliver their ticketing needs.

It's been a great, great kind of test platform, is the virtual business. We've, overnight, had to become a virtual ticketing company at scale across the globe. And we've been able to do that. We are powering through our portfolio, all of these virtual shows and selling tickets to them. So that's been what we do at our core.

And then two, we've always talked about being a better marketplace, making sure that the marketplace, the app, making sure that we have full inventory on the shelves, adding more inventory to the shelves, whether it's Ticketmaster clients or not, being a true marketplace where consumers can find tickets, buy them, stock the shelf through secondary third-party partners, adding more content to the shelves is the strategy.

So just just take that global, then those two core strategies continue. We've got lots of clients to service on a global basis. We're under serviced and under market shared in many markets where our concerts are strong, and we're rolling out our global marketplace, best-in-class practices across our global marketplaces that are sitting on old platforms.

Brandon Ross -- LightShed Partners -- Analyst

Great. And then a few weeks ago, Marc Geiger had announced his SaveLive club roll up. Wondering what impact, if any, you think he can have on the industry with that?

Michael Rapino -- Chief Executive Officer and President

Probably the same one he had in William Morris. But I think that there's a lot of talk on the independent venues, Save Our Stages, etc. And there's no doubt, everyone in live service providers and companies are having a rough year. We've been very focused on making sure that the 12 million employees in Live, from the hairdresser to the lighting crew to the security guards, get some stimulus and help. We think those people are in the most need. So we've been very vocal about that.

When it gets to the venues, in general, the thesis out there with Marc Geiger and some others, is that these independent venues are so distressed that they're going to throw someone the keys at a very cheap price, and you can maybe roll up some of these cheaply and have some scale. Well, the thesis is basically broken at the first point is, any great live club is not throwing anybody the keys cheaply. There's a lot of capital out there. So if you own the Troubadour in Los Angeles, it's a legendary business and you're having a tough year, you're not selling to Marc Geiger or anyone else at one or two times multiple.

Your access to capital, PPE loans, lots of ways you can keep your business afloat while you get through the storm. So we don't think that there's a huge opportunity that there's a fire sale happening at that level. Now number two is, we're the -- we have a consolidation of clubs in our business. Clubs on their own are a tough business if you scale them up on their own. They're not a really, really fruitful business on their own. So we like them as part of our overall ecosystem.

But we don't believe that clubs, whether you own 10, whether you own 20 of them on their own, provide you much global synergy or U.S. synergy to leverage off of. So we hope all these clubs find their way through this pandemic, like we hope all live service providers find their way through this and that the government and stimulus program is going to help them survive it. But we don't think that, that there's probably many that are going through fire sale to anybody because there's too many great options for them.

Brandon Ross -- LightShed Partners -- Analyst

Great, thank you.

Operator

Your next question in the queue is from Ben Swinburne with Morgan Stanley.

Ben Swinburne -- Morgan Stanley -- Analyst

Thanks. Good afternoon. First, Michael, just -- what are you hearing from artists and artist management on getting back out? And I'm specifically wondering what's your best guess in terms of time and when we start to see major tours announced and eventually tickets put on sale "at scale"? I'm just wondering what your latest crystal ball tells you.

Michael Rapino -- Chief Executive Officer and President

Well, listen, the important part is the demand is there and the supply is there, as we know, right? So that's obviously what we're playing for. So we know that the fans still are going to get to the show, and we know that artists want to get back on the road when it's safe. Depending whether you're -- what age you are as an artist, you may have a different timeline and risk factor. But many artists that we're talking to are just waiting, as we all are, looking on a week-by-week basis to figure out when is there a plan in place when they can start looking to get on the road.

So we've been always talking to artists about if you have a '20 tour moved into '21 for the summer into the fall, let's hold on to that. Let's see how the next few months go through testing and vaccines and a proper national plan, etc. And we are telling any artist that has a new tour that's thinking of going on the road, let's look at the fall. But we don't need to make those decisions until January, February.

So if you have a new tour, well, let's think about the fall into '22. But let's sit tight until January before you start moving any costs in place to get ready. So that's kind of the general census. Let's resched -- let's get through '21 summer with whatever we rescheduled from '20, add new stuff into the fall to '22 as we get a better visibility into January.

Ben Swinburne -- Morgan Stanley -- Analyst

That makes sense. Are there any insurance-related issues that you guys are having to work through, maybe beside the festivals or any large events? Or do you think that's pretty well baked at this point?

Joe Berchtold -- President

You're talking about insurance on the historical, what's happened to us this year?

Ben Swinburne -- Morgan Stanley -- Analyst

No, I meant more -- is -- we obviously seen like in film production, the studios have to do -- are dealing with more and more health-related protection and insurance, frankly, from having to shut down. Just wondering if that's impacting your business at all.

Joe Berchtold -- President

Well, because we're talking about, as Michael just said, really summer of getting back to scale, I think, first of all, we remain optimistic that the government here in the U.S., like many of them internationally, have sorted out and made sure that there's not spurious liability from everybody doing the appropriate actions. And then that's why we've got the programs in place.

And what we're doing is we're working with the public health officials in every market to figure out what is that needs to be done for those markets to bring fans back safely as we get to next summer. And I think it's our expectation that, as long as we're doing that, that we're going to be in a fine position.

Ben Swinburne -- Morgan Stanley -- Analyst

Got it. And Joe, if I could just ask you one, to try to help us think through the fourth quarter use of cash, I know you're looking forward to that question. Is this -- any way to think about the contribution margin that we might see in Q4 versus what you saw in Q3? Because that seems like one area that might help benefit the cash burn number.

Joe Berchtold -- President

Yes. The only thing I can say is that I don't think Q2 and Q3 were that different from each other. Obviously, some different pieces moving around, but they weren't wildly different. And I've given you the cash burn numbers, operational and gross for nine months, so you can pretty easily do the calc on what that leaves over for Q4.

Ben Swinburne -- Morgan Stanley -- Analyst

Okay. Thanks a lot.

Michael Rapino -- Chief Executive Officer and President

And Joe, you've mentioned the sponsorship already?

Joe Berchtold -- President

Yes. 90% of our sponsorship commitments that we had as of the end of February have stayed in place. They've stayed in 2020 where possible, and that's what's driven some of the CM that we had, this quarter in particular, with most of the rest of it rolling into next year.

Ben Swinburne -- Morgan Stanley -- Analyst

That's great. Thank you.

Operator

Your next question is from David Katz with Jefferies. Mr. Katz, your line is open. Mr. Katz, is your line on mute? We'll move on to the next question. Your next question in the queue is from Doug Arthur from Huber Research.

Doug Arthur -- Huber Research -- Analyst

Yeah, thanks. Can you hear me?

Michael Rapino -- Chief Executive Officer and President

No problem. Go ahead.

Doug Arthur -- Huber Research -- Analyst

Yes. So I guess this is a question for either Michael or Joe. Based on all the costs that you have had to sort of take out to slow the burn, is it fair to conclude that when business gets back to normal, and obviously there'll be a surge of activity at some point, that the underlying inherent margins of this company, particularly on the concert segment, may be higher on a longer-term basis? Based on the kinds of rationalizations, you've done the things you found sort of out of necessity, I mean will there be structural change on a permanent basis?

Joe Berchtold -- President

Doug, this is Joe. I'll start. The answer is yes, that's the over $200 million of cost savings from the severance that I talked about that we said will be out for the foreseeable future. So that piece of it is out, and then we'll manage bringing the other costs, obviously, as slowly as possible as needed to ramp up as we get into next year.

Michael Rapino -- Chief Executive Officer and President

And just to add -- I just want to add to that. One of the things I want to make sure we're -- it's not just about severance. We're -- we've had a time to reengineer. So one of the strengths is like everyone's learned that is a new tool for all of us is the work-from-home strategy. We were a very decentralized organization with lots of offices from Tampa Bay to Cleveland. And we're now learning what everyone is learning. We can shut down a lot of those regional offices.

We can have a work-from-home strategy. We can reduce our office burn, our monthly burn and have a much more flexible work force, too. So work from home, a decentralized service model like ours, has been an incredible new gift to figure out how can we now restructure and still deliver the same volume without some of the costs.

We've also reengineered where we need offices and how we can have a regional model versus maybe a local at times. So between reengineering and work from home, our goal has been both at Ticketmaster, Live Nation and globally to run at a $200 million annual run rate reduction on our fixed costs. That's our goal right now into a full ramp-up.

Doug Arthur -- Huber Research -- Analyst

And just sort of following up on Ben's question on artists, and maybe this is is probably answered. But as things start to come back, and there's a lot of demand from artists to get out on the road, there's probably some scheduling issues. Do you think artist management teams will be more flexible on payouts, particularly if you're restricted in terms of how many seats you can sell out initially in an amphitheater or what have you? Are your conversations indicating flexibility on that side of the equation?

Michael Rapino -- Chief Executive Officer and President

Yes, 100%. I mean, everyone has been affected by this understands that the world is going to start differently. And it's going to require a slower ramp-up. So we see it already, and you see the drive-in shows we're doing, the social distance shows in Atlanta, The Roxy on the weekend, where we have maybe 20% to 40% attendance depending on the state. Those are all adjusted artist guarantees based on the capacity. So 100%, the artists will be coming back to work and adjusting their expectations to the realities of the capacity as we all, as an industry, start to scale up from 25% to 100% eventually.

Doug Arthur -- Huber Research -- Analyst

Okay, great. Thank you.

Operator

And we have David Katz with Jefferies.

David Katz -- Jefferies -- Analyst

Hi, can you all hear me? Apologies for prior.

Michael Rapino -- Chief Executive Officer and President

No problem. Yes, we can.

David Katz -- Jefferies -- Analyst

Very good. Thank you. Look, given the considerable financial endurance that you have and the limited visibility around the trajectory of this recovery, I just wanted to hear your thoughts or perspectives about any sources of capital or any capital raising at this point?

Joe Berchtold -- President

This is Joe. I think we don't see it as necessary at this point, as we gave you pretty detailed numbers on the burn current -- and our current debt capacity and cash. We think that we've got enough to get us through until we ramp back up. Also remember that a lot of the cash starts flowing back into the business months before the shows themselves start, because you've got the concerts going on sale, which generates the cash in the Ticketmaster and in the sponsorship.

So we think that will take us through this period until we can get ramped back up. At the same time, we know the same thing that you and everybody else knows is that there is tremendous liquidity out in the market should, at some point, the need arise, but we just don't see it at this point.

David Katz -- Jefferies -- Analyst

Thank you very much. Appreciate that.

Operator

[Operator Instructions] Your next question in queue is from Stephen Glagola with Cowen.

Stephen Glagola -- Cowen -- Analyst

Hi. Has the pandemic accelerated the shift for event organizers to utilize your digital ticketing technology? And just going back to the prior question on the Ticketmaster changes, moving to the global tech stack, etc, do you expect these changes to push ticketing structural margins above that 29%, 30% threshold when business conditions normalize? Thanks.

Joe Berchtold -- President

So first of all, on digital ticketing, I think Michael spoke to the streaming. And the fact that we see streaming as being a very interesting complement to our business going forward, and we think it makes sense as an additional point of revenue for the artist and for the overall ecosystem. And when they do a show, they can also stream it for fans and other markets who can't get to the sold-out show and so on. So the ability to provide that digital ticket along with traditional tickets and do [Technical Issues] more important than something we're doing right now.

So no question on that. And then in terms of TM going forward in the globalization, again, Michael spoke to, and we've given you some of the numbers on the cost reduction, obviously, a chunk of that is associated with Ticketmaster and how we think about driving that on a globalized platform and taking some of the rust and inefficiencies that might have existed in accelerating, bringing that all together. I don't think we're going to give you specific numbers here today. But we certainly see overall some further reductions in the cost structure.

Stephen Glagola -- Cowen -- Analyst

All right. I appreciate that, Joe. And just one more, if I can. Obviously, most people are -- you're seeing most people hold on to their ticket for shows that have been postponed. How many times can you move a show before you expect to see, sort of, the ticket buying public to give up on the show and demand a refund? Or you would just cancel all together? I believe you maybe -- you might have moved them once or twice right now. If you do three or four times, does that get into a situation where you just end up canceling it all together?

Joe Berchtold -- President

Yes. Look, as Michael said, the fundamental supply and demand dynamics have not changed. Artists want to tour. They need to tour for their livelihood. Fans want those tickets. Six months ago, we had a lot of folks saying, no, no, your refunds going to be 80%. Everybody's going to want their money back. Nobody's going to want. And that's proven fundamentally wrong. We're sitting at 17%, six months later, a fraction of what I think almost everybody was saying. So we remain very confident that it's -- there's not going to be an exact formula, but fans who were able to get a good ticket for an artist they want to go to, they're going to want to go to that show as soon as they possibly can, whenever that is.

Stephen Glagola -- Cowen -- Analyst

Okay. Thank you.

Operator

[Operator Closing Remarks]

Duration: 36 minutes

Call participants:

Michael Rapino -- Chief Executive Officer and President

Joe Berchtold -- President

David Karnovsky -- JPMorgan -- Analyst

Brandon Ross -- LightShed Partners -- Analyst

Ben Swinburne -- Morgan Stanley -- Analyst

Doug Arthur -- Huber Research -- Analyst

David Katz -- Jefferies -- Analyst

Stephen Glagola -- Cowen -- Analyst

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