Not all bosses and big earners are bad, as Live Nation’s CEO & President has proved as the company aims to slash $500m in costs for the year.
Live Nation, as a purveyor of live entertainment and events, have had to look at their business quite seriously for the year. With gigs, festivals, and nearly all un-essential things shut down for at least a few months the company is looking to reduce its costs by $500 million.
Michael Rapino, the company’s CEO and president, has offered to give up his $3 million annual salary this year to help cut costs. It’s a valiant move but unfortunately leaves a lot still to cut. Thankfully, on $3 million a year Rapino should be comfortable for the year assuming he’s put some of that huge pay packet away for a rainy day/global pandemic.
It was less than 2 months ago that Live Nation’s President Joe Berchtold told investors that, beyond China and Italy, there was “no pullback in fan demand or ticket buying”. In the earnings call they even revealed how they had just sold out a festival in Australia whilst Coronavirus began to make headlines around the world.
At the time, Rapino said: “We’re going to take this cautiously as we watch the markets and assume a hotspot will flare up and a show will be cancelled here and there. But we’re confident, long-term, the show will happen; the revenue will flow and the fan will show up.”
Innocent times – those merry, ignorant days back in February. Live Nation have begun to announce a series of actions they will take to reduce $500 million in costs to keep them stable through a lack of business this year. A new $120 million credit facility will help the company reach its goals.
There will be salary reductions across the boards with senior executives taking a cut of up to 50%. Of course Rapino is taking the largest cut as a great show of solidarity. Berchtold is taking a cut from $1.3 million to $650,000.
Other cost cutting will come in the shape of “hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs, and reduction or elimination of other discretionary spending, including, among other things, travel and entertainment, repairs and maintenance, and marketing”. Mostly, presumably, simple moves considering little to no business for the foreseeable future.
It’s an uncertain time for lots of people and companies. Acts like that of Rapino will be a saving grace in many cases as the wealthy make sacrifices for the wider good.