Manchester bombing could depress U.S. concert attendance
The Manchester Arena bombing tragedy might crimp U.S. concert attendance temporarily, but analysts expect popular acts to continue drawing big crowds.
"It's hard to imagine it won't hurt in the short-term," said Douglas Middleton Arthur, an analyst with Huber Research who covers the entertainment business. "But security is tight already and the summer music festival season is huge."
"We unfortunately have learned to be resilient to these types of events," said Brandon Ross, an analyst at BTIG Research. "I expect any pressure on the business and the stock to be short-lived."
The suicide bombing in Manchester, England, which claimed 22 lives and injured dozens after an Ariana Grande performance, took place outside the arena. Speculation is that the bomber, the son of a Libyan immigrant, did not want to try going through the hall's security checkpoint.
Live Nation Entertainment (LYV), the promoter of the Grande concert, saw its strong-performing stock dip almost 1 percent on Tuesday in the aftermath of the attack. The same was true for the shares of New York's Madison Square Garden (MSG), one of the largest U.S concert venues. Anschutz Entertainment Group, known as AEG, the country's second largest concert promoter, is not publicly traded.
Beyond issuing a statement that it was "saddened by the senseless tragedy," Live Nation would not discuss the possible impact on its business. AEG did not respond to a request for comment.
Some analysts noted that the even deadlier terrorist assaults in Paris in November 2015 had just a temporary effect. Radicals killed 189 people at various sites throughout the city, with the biggest toll at the Bataclan theater, where 89 died.
Tourism to Paris plunged for a while, but by year-end 2016 had bounced back, according to the French National Institute of Statistics and Economic Studies. And the Bataclan, which was closed for a year for renovations, reopened with a packed concert by Sting and is now doing a booming business.
But in the wake of the Manchester tragedy, concert venues are concerned about security and have heightened it. Madison Square Garden said in a statement that it has "increased security measures, including a greater police presence, and is continuing to work closely with local law enforcement to ensure we remain informed of any potential concerns."
Security might be tightened, but it is tight already. At Madison Square Garden, fans must go through metal detectors. A German broadcaster's interview Tuesday with the head of that nation's largest arena, in Cologne, illustrated how he strengthened anti-terrorist protections after the Paris attacks.
The chief of the Lanxess Arena, Stefan Löcher, told Deutsche Welle that they increased police presence at music and sports events, brought in bomb-sniffing dogs, took to inspecting every bag and installed turnstiles to slow the fans' entry and thus allow better surveillance.
Whether such heightened security affected concert profits is unlikely. As BTIG's Ross put it, the venue can always pay for extra safety features by hiking ticket prices. At last month's two-weekend Coachella music extravaganza in California, many passes cost $900, double the price from the year before.
Meanwhile, concert companies are raking in the dollars. Both Live Nation and AEG have their own venues, but make most of their money through promoting shows at someone else's. The Manchester Arena is owned by an investment group, and Live Nation ran the event. Its ownership of the ubiquitous Ticketmaster ticketing service is a huge help to its business.
The company's financial report for this year's first quarter, for instance, indicated that revenue had grown 19 percent, to $1.4 billion, and operating income by 25 percent to $92 million.
But the company is always aware of danger. As Live Nation noted in its 2016 annual report: "Negative factors such as challenging economic conditions, public concerns over terrorism and security incidents, particularly when combined, can impact corporate and consumer spending