MIAMI, FL (CelebrityAccess MediaWire) — After installing a new controversial strategy in which they pulled back from making mega-expensive deals with superstars like Madonna and Jay-Z, Live Nation is now pulling a major proponent of the methodology to court.
The concert giant is slapping Michael Cohl, former Live Nation chairman and Broadway impresario about to launch the most expensive show in Broadway history, "Spider-Man: Turn Off the Dark," with a lawsuit accusing him of breaching a non-compete agreement signed when he exited Live Nation in 2008.
According to the Live Nation lawsuit, Cohl agreed when he left the company to pay $9.85 million in installments in return for various assets. As part of that deal, the 62-year-old Cohl was allowed to continue working for the Rolling Stones, Pink Floyd and Barbra Streisand.
He was supposed to pay more than $9 million over two years as part of that deal, but Live Nation's suit claims he failed to pay $5.35 million. In a statement, Cohl said, "My lawyers will respond shortly," according to the New York Post.
Live Nation doesn't dispute that Mr. Cohl paid the first installments. But according to the suit, he defied repeated notices from Live Nation this past September and October, failing to make good on payments amounting to more than half the total amount due under the agreement.
Cohl left the company in 2008 after a boardroom battle over Live Nation's "360 degree" deals with top artists. Cohl favored the approach, which signed top acts to wide-ranging deals spanning recording, touring, merchandising and other rights.
But Cohl clashed with CEO Michael Rapino and others in the company who reportedly found the deals too expensive. In two cases according to the New York Post, Live Nation agreed to pay Madonna $120 million and Jay-Z $150 million.
The severance agreement is included as an exhibit in the suit, filed in U.S. District Court in southern Florida.
It's no secret that Live Nation's ticket prices have risen and sales as well as share price are suffering as a result. Empty seats have begged the giant, along with its newly merged Ticketmaster, to develop strategies that will fill more seats.
Chairman Barry Diller is said to have been upset about Live Nation's disastrous investor conference in July, when the company's disappointing profit projections prompted a massive sell-off and sent the stock down 20 percent, according to the New York Post. In September, Diller sold his 2.5M shares in the company.
Diller took on the chairman role at Live Nation after his firm, Ticketmaster, agreed to a merger in February 2009. The chairman's role is now being filled by Liberty Media CEO John Malone. Irving Azoff, who runs Front Line Management, is currrently executive chairman.
— Crystal Lynn Huntoon