Saudi Arabia has invested $500 million in Live Nation
Saudi Arabia has bought $500 million worth of stake in Live Nation. With the current pandemic hitting the entertainment industry hard and many companies forcing to close, or suspend their main money-maker such as concerts or festivals, Live Nation may have just been saved thanks to the Saudi Arabian government.
The Saudi Arabian Investment Fund completed the transaction on Monday, acquiring 5.7% of the company and owning 12,337,569 total shares. The highest shareholder is John Malone’s Liberty Media, owning 33% of the company, making his stake over $2 billion. As soon as the transaction occurred, the stock in Live Nation went up 2%.
The decision to invest in Live Nation comes from the Saudi Arabian government looking to expand tourism to their country, as they have also invested in other entertainment companies such as Carnival Cruises, where they own 8% of the company.
Live Nation has also come under some fire as of recently with on-going lawsuits and the mass requests of refunds from cancelled concerts that people have purchased through Live Nation. Before the Saudi Arabian investment, the company dropped its share price to 40% less than normal at the beginning of January, mainly due to the pandemic that was rapidly spreading overseas.
While this is good news for Live Nation, we’re not so positive how other entertainment companies will be able to crawl out of the hole. For example, Ticketmaster has laid off hundreds of employees, which is nearly a quarter of all Ticketmaster’s employees in North America as part of a $500 million cost reduction plan. However, live-streaming service channels are booming, like YouTube, who saw a 33% revenue increase from the first quarter of 2020, mainly due to the pandemic.
Image Credit: Getty Images with Modifications w/ Saudi Arabia Prince