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Saudi Arabia’s PIF buys stake in Covid-19-hit Live Nation

(by Igor Golovniov/SOPA Images/LightRocket via Getty Images)

Saudi Arabia’s Public Investment Fund (PIF) has acquired a 5.7-per-cent stake in Live Nation, news that saw the embattled US entertainment giant’s share price receive a near 10-per-cent lift yesterday (Monday).

PIF’s investment is worth around $518m (€477.5m), according to Live Nation’s current stock price, with the company, parent of ticketing firm Ticketmaster, confirming the deal in a filing to the Securities and Exchange Commission (SEC).

The PIF will now become the third-largest shareholder in Live Nation after Liberty Media (25.05 per cent) and Vanguard Group (7.09 per cent). Live Nation, which has seen its share price fall more than 40 per cent during 2020, yesterday saw its stock rise by 9.86 per cent to reach $42.01 at close of trading on the New York Stock Exchange.

Earlier this month, Live Nation spelled out the impact that Covid-19 is having on its business by detailing an amendment to its existing credit agreement, the completion of a new revolving credit facility and a cost reduction and cash management program.

Michael Rapino, chief executive and president of Live Nation, said he would forgo his $3m annual salary amid wider cuts of up to 50 per cent amongst other senior executives, adding he was confident the company had the “financial strength to weather this difficult time”.

The announcement on April 13 saw Live Nation declare that through cost saving initiatives and government support programs, it is targeting $500m in cost reductions in 2020 and the elimination or deferral into 2021 of $800m in cash outflows.

As of March 31, Live Nation, whose Ticketmaster subsidiary has a host of contracts with major sports organisations, said it had sold over 45 million tickets to shows scheduled for 2020, down two per cent from the same time last year. These ticket sales do not include 1.6 million tickets for cancelled shows and 1.5 million tickets for shows rescheduled into 2021.

Through March 31, Live Nation has had 8,000 shows impacted by the event stoppage starting in mid-March of this year, with 15 million tickets sold for these shows. Of this, 7,000 shows with 14 million tickets sold were postponed, accounting for 90 per cent of tickets impacted. The remaining 10 per cent of tickets, or 1.6 million, were for shows that were cancelled.

Liberty Media announced last week that it had reattributed its stake in Live Nation from the Formula 1 motor-racing championship to its SiriusXM tracking stock in a move that will see $1.5bn in net asset value go in each direction.

PIF’s investment comes with the sovereign wealth fund currently lining up another major deal in the sporting sphere. The PIF is believed to be closing in on a takeover of English Premier League football club Newcastle United.