LOS ANGELES (CelebrityAccess MediaWire) — The conflict over strategy between Live Nation's CEO Michael Rapino and chairman of the board Michael Cohl may be coming to a head as it appears that the board is negotiating the exit of Mr. Cohl.
Cohl has been Live Nation's chairman and single largest shareholder since the firm bought his former company, Concert Productions International, in 2006 and has since served as the head of Live Nation's Artist unit and one of its chief strategists.
During his tenure, Cohl has been instrumental in the firms' innovative "360" deals which encompass touring, recording and merch deals for major artists such as Madonna and Jay-Z. The deals come with a hefty price tag for Live Nation though with Madonna's package going for more than 120 million and Jay-Z netting a cool $150 million.
Despite these big numbers, Cohl maintained that these deals will pay off for the promoter. During a conference call in November, Cohl told investors that he expects Live Nation to reap more than $1 billion from the Madonna deal over the duration of the 10-year contract and defended the valuations of the agreements by noting that they were "cross collateralized" against the other components. Investors were somewhat skeptical however and Live Nation's stock has taken a hit, falling over 44% since the initial Madonna deal was announced last fall.
The skepticism hasn't been entirely external either. According to the WSJ, a rift developed between Cohl and Rapino, with Cohl eager to push forward with as many as 15 additional 360 deals while Rapino urged a more cautious approach. Last week, the feud became public when an article appeared in the WSJ, detailing Cohl's initial efforts to buy his old firm, CPI, back from Live Nation. The parties however, could not agree on a price and Live Nation indicated that it intended to enforce the 8-year non-compete clause in Cohl's contract.
All of that is still up on the air and key details pertaining to financial arrangements and the non-compete still need to be worked out but most observers expect that such a deal could be hammered out within the week. – CelebrityAccess Staff Writers
