Mergers and Acquisitions in the Live Events Sector Loom.
It has been a financially catastrophic 18 months for the live events industry globally and this will mean changes in the near future. From music festivals to venues and ticketing companies some consolidation is inevitable but what are the likely outcomes going into 2022 and who will be the winners and losers?
The current financial status of organisations operating in the live events sector really depends on how they have managed their operation over the last year. Some companies had large cash reserves and have been able to weather the storms but smaller private operators have either gone already or are assessing their options.
Considering that music festivals like Glastonbury lost about £5m in 2020, eating up almost all their cash reserves, the music festival sector has been particularly hard hit. Many festival organisers are small independent operations and have survived thanks to GoFundMe initiatives or generous donations from fans and business partners. Even large corporates like Live Nation stated that its ticketing revenue fell 84 per cent in 2020, to £1.4m, pushing it to its first operating loss since 2012. Further problems have been seen for sectors that supply audio visual equipment too with companies like Midwich slumping from profits in excess of £20m in 2019 to a loss of £1m in 2020.
Conversely companies catering for the streaming of live music and events on virtual platforms have been thriving as performance artists and live events were forced to go online. It's not just the traditional online services that have benefitted financially from this boom but suppliers of equipment essential for live streaming have been outperforming financial forecasts too.
Smaller operators are going to have to take a serious look at their financial operations going into 2022 and devise plans for survival. This could come in the form of new partnerships or full financial mergers. Organisations with deep pockets are already eyeing financially vulnerable companies in the live events sector because they see opportunities in a future resurgence of the industry. Acquisitions are already taking place amongst live event equipment suppliers and shares in Live Nation have more than doubled in value since their pandemic low, reflecting optimism that lockdown restrictions in many countries will be lifted this year.
Research amongst music festival-goers is that there is pent up demand for live events and this bodes well for the music festival sector. Operators that make it through into next year will reap the benefits of survival but with many still sailing close to the wind financially it's time to seriously consider selling to larger corporate predators or to form strategic alliances with partners where there are synergistic opportunities and a more secure future.
For organisers planning their music festival using a software management platform like Festival Pro gives them all the functionality they need manage every aspect of their festival logistics. The guys who are responsible for this software have been in the front line of event management for many years and the features are built from that experience and are performance artists themselves. The Festival Pro platform is easy to use and has comprehensive features with specific modules for managing artists, contractors, venues/stages, vendors, volunteers, sponsors, guestlists, ticketing, cashless payments and contactless ordering.
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