Live Nation Investor Presentation Prepared for: 2007 Wedbush Morgan California Dreamin Conference
Forward-Looking Statements Certain statements in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements regarding: Live Nation s market and growth opportunities; the consolidation of the company s global platform, expansion of its artist relationships and development of new revenue streams; anticipated reduced variable and fixed costs; Live Nation s expansion plans, including regarding potential new venues; the potential economics of the Live Nation Artists model and the associated growth of that business; the company s ticketing opportunity and strategies; Live Nation s online strategy and international website roll-out; and the company s ability to secure more profitable sponsorship partnerships and the potential revenue growth associated with those partnerships. We wish to caution you that there are some known and unknown factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, including but not limited to operational challenges in achieving strategic objectives, the risk that our markets do not evolve as anticipated, competition in the industry and difficulties in attracting established artists away from more traditional contract structures. We refer you to the documents that Live Nation files from time to time with the SEC, specifically the section titled Risk Factors of the company s most recent Annual Report filed on Form 10-K and Quarterly Reports on Form 10- Q, which contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. All subsequent written and oral forward-looking statements by or concerning Live Nation are expressly qualified in their entirety by the cautionary statements above. Live Nation does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise. 2 2
Pro Forma Disclosure Pro forma disclosure includes the divestiture of a portion of our North American sports representation business and our UK sports representation business throughout 2006, the acquisition of CPI in May 2006, the acquisition of Trunk in June 2006, the acquisition of Musictoday in September 2006, the acquisition of House of Blues in November 2006, the acquisition of Gamerco in December 2006, the divestiture of Donington Racetrack in January 2007, the divestiture of the remaining stake in Phantom - The Vegas Spectacular in March 2007, the divestiture of the Nashville amphitheater in April 2007, the divestiture of Hammersmith Apollo and the Forum in June 2007, the acquisition of the remaining 50% interest in House of Blues Concerts Canada and consolidation of those results in June 2007, the consolidation of Academy Music Group s financial results which occurred in July 2007, the sale of selected Mean Fiddler venues in August 2007, the sale of the Odeon venue in August 2007 and the consolidation of operating results of a non-music touring production due to a correction in accounting for that agreement (applicable only for the three months ended September 30, 2007) as if all of these transactions were completed on the first day of the period presented for their respective segments. 3 3
Michael Rapino President and Chief Executive Officer 4 4
Live Nation Largest live music company in the world 19 countries 10,000+ music events 35+ million music fans 140+ music venues 20+ music festivals 20+ million fan database Over 1,300 artists 375+ major sponsors #2 event web presence $4+ billion revenues 4,400 full-time and over 15,000 part-time employees 5 Note: Statistics reflect 2006 results; Number of countries reflects Hong Kong separately 5 5
Live Nation Largest global concert promoter TOP 10 PROMOTERS WORLDWIDE Ranked by tickets sold worldwide from 1/1/07 9/30/07 as reported to Pollstar Live Nation 27,930,137 AEG Live (Global) CIE (Mexico) MLK (Germany) Gillett (Canada) Michael Coppel (Australia) 3A Entertainment (UK) MCD (Ireland) C3 Presents (US) Outback Concerts 8,520,678 2,547,682 1,904,388 954,213 915,796 810,971 792,095 761,892 726,645 Source: Pollstar 3QYTD 2007 figures 6 6
Live Music is Important Concert industry continues to grow North American Concert Industry ($ in billions) $4.0 $3.0 $2.0 $1.0 $0.0 $1.8 Source: Pollstar +15.5% CAGR $2.1 $2.5 $2.8 $3.1 $3.6 2001 2002 2003 2004 2005 2006 In the past, people would tour to promote their albums; today they put out albums to promote their tours, Guy Oseary, Madonna s Co-Manager 75% of Earnings of the 2006 Top 10 Music Moneymakers Were Generated from Touring $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 Rolling Stones Tim McGraw/Faith Hill Rascal Flatts Madonna Barbra Streisand Kenny Chesney Celine Dion Bon Jovi Nickelback Dave Matthews Band Earnings Tour Gross Source: Forbes, except tour gross for Streisand and Matthews from Pollstar 7 7
Broader Market Opportunity N. America Music Sponsorship Market ($MM) Music Industry Revenue - $77BN Live: $8.8BN Live Related: $11.1BN $1,250.0 $1,000.0 $750.0 $695.0 12.9% CAGR $754.0 $867.0 $1,000.0 Spons./Endors., $5.7, 7% DVD, $2.5, 3% Artist Management / Agency, $10.0, 13% $500.0 2004 2005 2006 2007 Ticketing, $3.5, 5% Venue Ancillary, $3.5, 5% Other Live Related, $4.1, 5% Live Concerts, $8.8, 11% Recorded Music, $31.0, 41% Global Advertising Market ($BN) $600.0 5.4% CAGR $531.0 $507.7 $478.8 $407.5 $427.5 $458.0 $400.0 Publishing, $8.0, 10% $200.0 2006 2007 2008 2009 2010 2011 Source: Pollstar, IFPI, National Music Publishers Association, The Licensing Letter Annual Review and company estimates Source: IEG and PWC 8 8
Vertical Integration Creating the artist-to-fan platform Artist E-Commerce Fan Manager Booking Agent Promoter Venue Operator Sponsor Ticketing Merchandise Downloads DVD s Fan Clubs VIP Services 9 9
3 Business Drivers Reporting Segments Boxed Venue Operator Global Artists North America Music International Music Store Front Global Digital 10 10
Strategic Roadmap 1. Improve Core Business 2. Consolidate Global Platform 3. Expand Products / Revenue Streams Reverse NA decline Reduce fixed / variable costs Divest non-core assets Expand/ Maximize new products around live event Consolidate international promoter network Expand House of Blues and midsized music venue platform Solidify Global Touring competency Extend relationships/revenue lines with artists Create artist/fan direct selling channel via livenation.com Develop ticketing business 11 11
Deep Music Management Team Michael Rapino President & CEO Former CEO/President of Global Music and President of International Music Michael Cohl Vice Chairman of Live Nation and CEO, Artist Nation Inventor of global tour Promoted 11 of top 50 grossing N. American tours of all time Demonstrated success in extending relationships with artists Arthur Fogel Chairman, Global Music Produces global tours for the biggest acts in the world Arthur Fogel knows how to make the impossible possible. He s a touring genius. - Madonna Jason Garner CEO, North American Music Formerly head of Live Nation s Touring and Amphitheater programming divisions Executed on 30% improvement in amphitheater Adj. OIBDAN YTD through Q307 Russell Wallach President, NA Alliances Former EVP of National Sales and Marketing 20 years experience in sports and entertainment Simon Lewis President, Intl. Alliances Spearheading intl. marketing partnerships Formerly of Thames Television and MTV Alan Ridgeway CEO, International Music Former CFO of Live Nation and President of International Music Bryan Perez CEO, Global Digital Responsible for the company s online, wireless, ticketing and IT strategy Former EVP of Strategy and Business Development Nathan Hubbard President, Ticketing Oversees Live Nation s ticketing initiatives CEO of Musictoday where he pioneered ecommerce, ticketing and fan club services 12 12
Operational Management Expertise Case Study UK MUSIC ADJUSTED EBITDA KEY INITIATIVES: ($ in millions) $30.0 $27.6 Started Festival division (Download, Hyde Park, etc.) Drove sponsorships $20.0 (Carling, MBNA, Nokia) $13.6 $13.3 Built core promotion $10.0 business $6.4 Investments in Hammersmith and The Point venues which $0.0 delivered strong returns 2001 2002 2003 2004 Under Rapino s Leadership, from 2001 2004 the UK Music Business Grew from $6MM of Adjusted EBITDA to $28MM 13 13
Historical Weakness Was Driven by Amphitheater Declines HISTORICAL ADJUSTED OIBDAN TRENDS TOTAL INTERNATIONAL MUSIC NORTH AMERICAN MUSIC 2001 2002 2003 2004 2005 2006 LTM 9/30/07 Total North American Music International Music 14 14
Live Nation Has Improved Operations REVENUE ($ in MM) $4,500 $3,500 $2,500 $1,500 $200 $175 $150 $125 $100 $2,473 $2,708 $2,806 $2,937 $3,712 $4,353 2002 2003 2004 2005 2006 PF LTM 9/30/07 ADJUSTED OIBDAN (% MARGIN) ($ in MM) $146 5.9% $172 6.4% $131 4.7% $138 4.7% $156 4.2% $187 2002 2003 2004 2005 2006 PF LTM 9/30/07 32% Reduction in Maintenance CapEx $58 $56 Since 2005 $48 $42 $44 $38 $34 $36 $36 $31 $18 $10 CAPITAL EXPENDITURES ($ in MM) $60 $40 $20 $0 48% Growth Since 2005 36% Growth Since 2005 2002 2003 2004 2005 2006 LTM 9/30/07 10.0% 8.0% 6.0% 4.3% 4.0% 2.0% At the time of the spin, the historical business had been in decline driven by a declining North American music business offset by improvements made internationally Lack of focus on core music business left business to be run locally and no benefit from scale / distribution platform Since the spin focus on divesting non-core businesses, growing core music business and capitalizing on vast distribution network already in place Maintenance Growth 15 15
North American Music 2007 Transformation Pro Forma Amphitheater Adjusted OIBDAN Improved 30% Year over Year to Date ($ in millions) Improvement in North American Music Adjusted OIBDAN Achieved Despite Weak Arena Touring $100.0 +30% $79.2 20.0% NORTH AMERICAN MUSIC ADJUSTED OIBDAN ($ in millions) $75.0 $61.0 14.7% 15.0% YTD 9/30/06 Pro Forma Adjusted OIBDAN $58.7 Plus: Improvement in Amphitheaters 18.2 $50.0 10.4% 10.0% Less: Weak Performance in Arenas (16.6) Less: Increased Legal Expense (5.5) Plus: All Other, Net 7.6 $25.0 PF YTD 9/30/006 PF YTD 9/30/07 5.0% YTD 9/30/07 Pro Forma Adj. OIBDAN $62.4 YOY Change +$3.7 NAM Adj. OIBDAN Margin 16 16
E-Commerce Platform Expansion LIVE NATION WEBSITES PEAK AT ALMOST 12MM VISITORS (Monthly uniques in millions) 14.0 12.0 10.0 ONLINE HIGHLIGHTS 2005 2007 Revenue from Tix Sold via LN.com (1) $54.8 $66.3 Net Incr. Serv. Ch. from Tix Sold via LN.com $4.0 $5.8 Peak Monthly Uniques (all web properties) 4.4MM 11.9MM Total Premium Inventory Sold Online ($MM) $0.0 $3.2 Cost Savings from Red. Sales Force ($MM) (2) $0.0 $2.0 8.0 6.0 4.0 2.0 0.0 Jan '06 Feb '06 Mar '06 Apr '06 May '06 Jun '06 Jul '06 Aug '06 Sep '06 Oct '06 Nov '06 Dec '06 Jan '07 Feb '07 Mar '07 Apr '07 May '07 Jun '07 Jul '07 Aug '07 Sep '07 NA Music HOB.com UK Music Intl Music Ultrastar Musictoday LIVENATION.COM IS A TOP CONCERT SEARCH ENGINE AND EVENT WEBSITE 1. 2. 3. Annual Advertising Dollars ($MM) (3) $0.3 $3.2 4. (1) 2007 reflects LTM 9/30/07 (2) To be effected in 2008 (3) YTD 2007 5. evenue.net Source: Nielsen 17 17
Ticketing Opportunity Live Nation s Content Makes Us a Substantial Player in the Ticketing Industry Ticketmaster CTS Total Total Controlled Controlled Number of Tickets (in MM) 20 44 60 137 0 50 100 150 Primary Ticketing Objective: Control Inventory Flexibility in distribution partners Leverage into new products secondary, VIP and artist ticketing Own the fan transaction to capture data in order to market and up-sell fans Current agreement for North America ticketing for bulk of NA venues expires December 2008 Current agreement for most of Europe, Rest of World and remainder of NA venues expires in December 2009 Source : Ticketmaster for the last twelve months ended 9/30/07 per company reports, CTS for 2007 per company reports, Live Nation estimated for 2006 pro forma 18 18
Global Artists Increases the Touring Value Proposition # of Artists / Est. Margin Competitive Advantage Expanded Time Horizon Unified: 5 Artists ~10-15% Margin Global: 5 Artists ~5-6% Margin National: 30 Artists ~5% Margin Local: 500 Artists ~2-3% Margin Additional Artist Non Tour Rights Endorsement, Artist Fan Club, Artist Web Site, LN Web Site, Streaming, Ticketing, Merchandise, DVD, CD, Mobile, Publishing Global Touring Rights Sponsorship, Auction, VIP Tickets, Tour Merchandise National Touring Rights Local Concert Rights One night 3 months 9 months 1 year + Lifetime 19 19
Extensive Live Nation Artists Infrastructure Already In Place Recorded Music Merchandise Artist Fansites & Ticketing Broadcast & Digital Media Sponsorship & Marketing Headed by industry veteran and The Wall producer, Bob Ezrin Recorded Music Veterans >500 Artists >75 Artists Platinum Selling DVDs >200 Sponsorship Professionals Over 300 dedicated employees already in place Note: Signatures subject to customary closing conditions. 20 20
Madonna s Signing with Live Nation Artists is Validation MADONNA STATISTICS: Highest grossing concert tour of all time by a female artist 2006 Confessions Tour grossed almost $200MM Over 200MM albums sold Last 3 albums sold over 20MM Last album sold almost 8MM MADONNA QUOTE: The paradigm in the music business has shifted and as an artist and a business woman, I have to move with that shift. For the first time in my career, the way that my music can reach my fans is unlimited. I've never wanted to think in a limited way and with this new partnership, the possibilities are endless. Who knows how my albums will be distributed in the future? That's what's exciting about this deal - everything is possible 21 21
Kathy Willard Executive Vice President and Chief Financial Officer 22 22
Financial Composition PRO FORMA LTM 9/30/07 REVENUE BEFORE CORPORATE & ELIMINATIONS (IN MM) Global Theatrical, $353.7, 8% Global Digital, $12.7, 0% Global Artists, $794.9, 18% International Music, $1,003.0, 23% Other, $167.7, 4% North American Music, $2,036.5, 47% 88% from Core Music Business REVENUE ($ in millions) Pro Forma LTM 9/30/07 North American Music $2,036.5 International Music 1,003.0 Global Artists 794.9 Global Digital 12.7 Global Theatrical 353.7 Other 167.7 Sub-Total 4,368.4 Corporate and Elims. (15.2) Total 4,353.3 PRO FORMA LTM 9/30/07 ADJUSTED OIBDAN BEFORE CORPORATE & ELIMINATIONS (IN MM) Global Theatrical, $32.4, 14% Other, $29.2, 13% Global Digital, ($4.3), 2% Global Artists, $28.6, 12% North American Music, $57.1, 25% International Music, $79.9, 34% 72% from Core Music Business ADJUSTED OIBDAN (% MARGIN) ($ in millions) Pro Forma LTM 9/30/07 $ % North American Music $57.1 2.8% International Music 79.9 8.0% Global Artists 28.6 3.6% Global Digital (4.3) (33.9%) Global Theatrical 32.4 9.1% Other 29.2 17.4% Sub-Total 222.8 5.1% Corporate and Elims. (36.0) * Total 186.8 4.3% * Denotes not meaningful 23 23
Acquisition / Divestitures CASH ACQUISITIONS: $195MM EXPENDITURES (excl. HOB) Build Expand Jackie Lombard Productions Global Gathering NET CASH: ($24MM) Theater: Phantom The Vegas Spectacular Broadway in Chicago Sports: CASH DIVESTITURES: $171MM NET PROCEEDS Sports Representation Businesses Donington Park Racetrack Non-Core Music Venues: Nashville Amphitheater Non-Core Music Venues / Buildings (cont d): Hammersmith and Forum and other microcapacity UK music venues San Francisco Office Building Pending Assets to be Sold: Remainder of North American Theatrical Other non-core venues Other non-music assets Note: Reflects activity since 1/1/06; Excludes HOB and new North American and The Point new venue and venue development projects 24 Signatures subject to customary closing conditions. 24
Capitalization and Leverage ($ in millions) As of 9/30/07 Cash and cash equivalents $351.3 Debt & Preferred: Revolver ($285MM capacity; $43.9MM of LC's outstanding) 0.0 Term Loan 452.9 Other Debt 100.6 Convertible Senior Notes 220.0 Subsidiary Preferred Stock 40.0 Total Debt & Preferred 813.5 Market Capitalization 1,218.1 Total Capitalization 2,031.6 Consolidated Credit Statistics: Bank and Other Subsidiary Debt / Adjusted OIBDAN 3.0x Total Debt & Preferred / Adjusted OIBDAN 4.4x Equity Market Cap. / Total Capitalization 60.0% Note: Pro Forma Adjusted OIBDAN $186.8 Live Nation seeks to keep a flexible balance sheet to pursue investment in its core business Bank covenants require maximum senior leverage (excluding the convertible and preferred) of 4.5x, maximum total leverage of 6.0x and minimum interest coverage of 2.5x Bank covenants are calculated differently from consolidated pro forma results shown here Live Nation s borrowing cost is L+175 under the revolver and L+275 under the term loan 25 25