Report: Civil War Averted At Live Nation
June 16, 2008 at 5:13 AM (PT)
A bevy of high-priced 360-degree contracts with music superstars such as JAY-Z and MADONNA have created major dissension within the hierarchy of LIVE NATION. THE WALL STREET JOURNAL reports that Chairman MICHAEL COHL continues to be bullish about the deals, setting a goal of signing as many as 15 more artists. CEO MICHAEL RAPINO, on the other hand, wants to slow the pace of the signings in order to ascertain the deals' economic viability.
The 360 contracts are certainly pricey. Sources estimate that LIVE NATION has already struck a $120 million for MADONNA and $150 million for JAY-Z. Although ticket sales for MADONNA's imminent tour seem strong, it can be safely assumed that neither deal has come close to turning a profit ... yet.
Nevertheless, COHL is so insistent on striking more deals that he recently threatened to leave the company over any delay in implementing his 360 strategy. The JOURNAL reports that the two parties came close to the brink of breakup, when COHL at one point asked to buy back CONCERT PRODUCTIONS INTERNATIONAL, the firm he sold to LIVE NATION last year for $123 million in stock and $10 million cash. However, "COHL was reminded that his employment contract would bar him from competing with LIVE NATION for eight years if he left," the story reported.
There has been a rapprochement of sorts, as COHL reportedly dropped his threat to leave. But the issue at stake remains unresolved -- and LIVE NATION had been on the verge of inking a 360 deal with SHAKIRA. Making matters worse, the internal discord has sent LIVE NATION stock down; the worth of COHL's stock, for instance, is reported to have fallen by around $30 million.
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