Live Music & REITs: A Most Improbable Investment

Let’s consider, if you will, the utterly baffling phenomenon of live music. Billions of people, voluntarily congregating in enclosed spaces to experience amplified sound – it’s a bit like a highly organised, rhythmic stampede, isn’t it? And at the very centre of this organised chaos sits Live Nation Entertainment (LYV 2.39%). They don’t just host concerts; they essentially are the concert, from the initial, often bewildering, ticket purchase to the final, earsplitting encore. It’s a remarkably effective business model, assuming you enjoy being slightly deaf. And owning a piece of it, well, that seems sensible enough, if you’re the sort of person who makes sensible decisions, which, statistically, is probably not you. Or me.

They’re steadily acquiring venues – currently 460 globally, a number that feels both large and strangely insufficient – effectively turning themselves into the landlords of rock and roll. It’s a clever strategy. Think of it as vertically integrating the entire experience, from the opening act’s questionable fashion choices to the overpriced beer. (The beer, incidentally, is a critical component of the whole ecosystem. Don’t underestimate the beer.)

The Department of Justice, in a moment of uncharacteristic candour, has essentially confirmed Live Nation’s dominance, stating they control roughly 80% of primary ticketing at major venues. That’s not a market share; it’s a polite term for a monopoly. (It’s the sort of number that makes one ponder the true meaning of ‘competition,’ and whether it’s merely a quaint historical notion.)

However, for investors seeking a slightly less… obvious… path to profiting from the sonic boom, there’s a fascinating anomaly lurking within the world of Real Estate Investment Trusts. A REIT, you see, is essentially a collection of buildings. And this particular REIT, Ryman Hospitality Properties (RHP +0.12%), owns a controlling stake in the Grand Ole Opry and Ryman Auditorium in Nashville, along with a smattering of large convention hotels in places like Orlando and Dallas. It’s a bit like discovering a secret level in a video game, isn’t it?

Five of the ten largest non-gaming convention hotels in the US are Ryman properties, managed by Marriott under the ‘Gaylord’ brand. It’s a solid, if somewhat predictable, business. But the entertainment segment, anchored by those iconic stages, is the faster-growing piece. Country music, it turns out, is a surprisingly robust economic force. Last year, the top ten country tours grossed over $1.2 billion. Luke Combs and George Strait each earned north of $75 million. (Strait managed that in just six shows. Six. One begins to suspect he’s not entirely human.)

Ryman fills the rooms, Ticketmaster fills the seats

The convention business provides the steady, reliable cash flow – the dividend, currently yielding 5% – while the music provides the… well, the music. Corporate groups book years in advance, offering a degree of predictability that most businesses can only dream of. The pandemic, naturally, threw a rather large spanner into the works, but Ryman has bounced back, with both adjusted funds from operations (AFFO) per share and the dividend now exceeding pre-pandemic levels by a healthy margin. (It’s a testament to the enduring appeal of both live music and well-organised conferences. Or possibly just a sign that people are desperate to leave their houses.)

Concerts fill the seats, yes, but owning the building is where the real margins reside. When Live Nation owns an arena, they control everything – the sponsorship deals, the naming rights, even the hot dog stands. It’s a remarkably comprehensive level of control. With over 70% of this year’s sponsorship deals already booked, management is predicting double-digit adjusted operating income growth again in 2026. (It’s a comforting thought, isn’t it? That someone, somewhere, is making money from slightly overpriced merchandise.)

Both companies are investing heavily in physical assets – buildings, stages, sound systems – that are difficult to replicate. Live Nation keeps expanding because, astonishingly, people keep showing up. Ryman continues to build convention centers that fund the payout while owning the stages that have drawn crowds for over a century. The demand for live entertainment isn’t slowing down, and both are positioned to profit from it. (It’s a rather improbable situation, when you think about it. But then, isn’t everything?)

2026-03-19 22:16

Ryman fills the rooms, Ticketmaster fills the seats

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