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Benchmark adheres to the Buy rating on Live Nation Entertainment (New York Stock Exchange: LIE) even on the heels of a new bipartisan House bill aimed at overhauling ticket fees for live events in the United States.
Presenting House Representatives Jan Schakowski (D-Illinois) and Gus Bilirakis (R-Fla.) Ticket lawwhich aims for event tickets to reflect the advertising guidelines for airline tickets, and requires sellers to display the full ticket price (fee included) in any promotional material.
The House bill is a companion to a similar measure that was introduced in the Senate in April. The move is motivated by the fact that studies show fees can add anywhere from 21% to 58% to the total cost of tickets — in addition to Ticketmaster’s recent well-advertised tickets for concerts by star performers from Beyoncé to Taylor Swift.
But Benchmark analyst Matthew Harrigan said that “the bill supports the reforms that Live Nation (LYV) is seeking and outlined in its FAIR Act proposal,” echoing the Buy rating. “Passage of the law, with some measures that parallel successful inclusive pricing approaches in some European countries, could significantly remove the ticket fee cloud.”
In the first quarter, Harrigan said, secondary market prices were nearly double what they were in the primary market, which shows how much live events are underpriced even including controversial fees. Meanwhile, secondary activity made up the “average teen share” of Live Nation’s first quarter total transaction value, suggesting that “Live Nation shouldn’t be the villain for its peers due to turmoil like the huge installments of Taylor Swift’s 2023 IRAs tour.”
He is also “particularly excited” about international expansion, which is one of “many” potential growth drivers.
The $110 price target means an upside of 31%, Harrigan said, and Live Nation’s current trading price means a 60% discount to Ticketmaster’s fair value.