Published Apr 13, 2020Live Nation has announced an additional cost-cutting strategy in the wake of sweeping concert and event cancellations and postponements caused by coronavirus. The company's latest measure includes forgoing the remainder CEO Michael Rapino's annual salary.
In an effort to ease the financial strain on the music industry and its workforce, Rapino will forgo receiving the remaining $3 million USD of his salary to conserve Live Nation's dwindling funds, according to a company filing to the Securities and Exchange Commission. Other top executives are also taking pay cuts up to 50 percent.
In the filing, the company wrote:
Given the uncertainty associated with the duration of current conditions globally, the company has launched a number of initiatives to reduce fixed costs and conserve cash. As part of these cost reduction efforts, the company will implement salary reductions, with salaries for senior executives reduced by up to 50%, and the company's CEO voluntarily forgoing 100% of his salary for the duration of the salary reduction program. Additional cost reduction efforts include 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.
Live Nation and its representatives remain hopeful that these cost-cutting measures will increase their likelihood of recovery when the pandemic is over — a return to normality stakeholders hope will come sooner than experts expect.
"With this additional liquidity, the flexibility in our debt covenants, and cost-cutting efforts, we believe that Live Nation has the financial strength to weather this difficult time," Rapino added in a statement. "We will be ready to ramp back up quickly and once again connect audiences to artists at the concerts they are looking forward to."
Early in March, before the COVID-19 pandemic had effectively shut down North America, Live Nation was one of the first promoters to call off all of its current tours, either through postponements or cancellations. Earlier in April, Live Nation launched a support fund for industry workers affected by the ongoing pandemic.
See the company's latest message of encouragement below.