Live Nation’s reported internal battle over signing big names like Madonna and Jay-Z to all-encompassing 360 deals, and whether the concert-promotion company should keep doling out money to more aging superstars or wait and see whether or not at least one of them actually pans out, has claimed a boardroom casualty; the Wall Street Journal is reporting that chairman Michael Cohl (pictured), who was pushing for as many as 15 more such deals to be signed in the coming months, is on his way out of the company, with a severance deal to be struck as early as next week. Let’s look back over Cohl’s short, yet very expensive, history with his soon-to-be-former corporate masters:
As founder, in 1973, of Toronto-based Concert Productions International Inc., Mr. Cohl has helped shape the financial landscape of the modern concert business, enlisting corporate sponsors to underwrite production costs and helping usher in the era of the $500 concert ticket.
Mr. Cohl joined Live Nation last year, becoming its chairman and largest individual shareholder, after Live Nation bought his company for $123 million in stock and $10 million cash.
When tensions with Mr. Rapino first surfaced, say people familiar with the matter, Mr. Cohl initially tried to buy his company back from Live Nation. But the parties couldn’t agree on a price.
In November, Mr. Cohl defended the rich valuations of the 360 deals to investors by saying $17.5 million per album for Madonna might sound excessive, but he said it wasn’t when factoring in the payout from touring or merchandise sales.
He said Live Nation expected to gross $1 billion from Madonna-related business during the 10-year contract. However, since the deal was unveiled in October, Live Nation’s stock has fallen 44%.
There’s certainly hubris in that calculation, given that Madonna will be 59 by the time her Live Nation Artists concert is up–and I don’t mean to sound ageist, but it’s worth pointing out since her shows, which are going to be the real moneymaker for this deal, don’t exactly allow her to just stand onstage and play a guitar and strut every so often. I wonder if the remaining Live Nation execs are looking for ways to alter these deals just a bit.