Live Nation joint venture paid out £48.3m for MCD Productions

A Live Nation joint venture with concert promoter Denis Desmond has paid out £48.3 million (€57.7 million) for Mr Desmond's MCD Productions.

New accounts for LN Gaiety Holdings Ltd, owned by UK-based Live Nation and Mr Desmond, outline details of the deal which had been under wraps until now.

Mr Desmond and other shareholders in his Gaiety Investments effectively received around half of the proceeds – £24.15 million – as they retain half a shareholding through their 50-50 venture in LN Gaiety Holdings Ltd.

The accounts also reveal that LN Gaiety Holdings Ltd in 2020 received a Covid-19 insurance payout of £30.6 million (€36.6 million) for events including Electric Picnic and the Reading, Leeds and Latitude music festivals that had to be cancelled after the pandemic hit in 2020.

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The accounts also offer a rare insight into the finances of MCD Productions as it has unlimited status here and is therefore not required to file annual accounts at the Companies Office.

Pricing the deal

The section of the accounts dealing with the purchase show that the £48.3 million purchase price was arrived after putting “fair value” of £26.1 million on assets acquired and goodwill on the acquisition of £22.19 million.

The fair value of assets consisted of MCD cash funds of £36 million, debtors of £13.2 million, net assets acquired of £32.1 million, tangible and intangible assets of £317,271 offset by creditors totalling £49.25 million and deferred tax of £6.1 million.

MCD’s business was badly hit by Covid-19 in 2020 when restrictions prevented any concerts taking place from mid-March. The impact is underlined, with the LN Gaiety Holdings Ltd accounts confirming that MCD contributed £7.26 million to group revenues and a loss of £2.7 million from February 1st, 2020, to the end of that year.

Mr Desmond declined to comment on the MCD purchase on Monday.

The insurance payment was not enough to prevent LN Gaiety Holdings Ltd recording pretax losses of £10.4 million (€12.4 million) for 2020, following pretax profits of £5.87 million for 2019.

The business recorded the losses as revenues plunged by £190.5 million or 85 per cent to £33.97 million. The business received £5.2 million in Government grants.

Numbers employed by LN Gaiety Holdings Ltd fell from 679 to 543 during the year with staff costs reduced from £20.6 million to £15.9 million.

Shareholder funds at the end of 2020 totalled £19.9 million.