Irving Azoff Steps Down From Live Nation; Regrets TicketMaster Merger
Irving Azoff: Sorry to f— up your New Year’s, Ray.
Billboard: I thought that was the motivation for announcing today.
A: It wasn’t to f— up New Year’s, it was to pay [taxes] on 2012 rates rather than 2013.
Q: Something like this would seem to have been in the works for quite a while.
A: It came down very quickly. We had a board meeting on Dec. 10 and we got it done by last night. Really, all it was about was it was time for me not to work for a public company. That’s all.
Q: Still, you had voiced a lot of confidence in what Live Nation can do.
A: There’s no animosity between me and [CEO Michael] Rapino or anybody at the company whatsoever. He was a great partner, no problems there, none of that. It was just the frustration with working at a public company. We had a board that was afraid to do things because of the Treasury, institutional shareholders, people writing you letters, everybody complaining about you and your people making too much money, you can’t do this, you can’t do that, everybody has to be on the same e-mail address. Sh– like that just drove me crazy.
Q: But you will remain a manager.
A: I am going to remain a manager, although not to the scale that I was. I’m going to look to do other things in the business. I love the representation business, I’d like to maybe expand that beyond just music. But [Live Nation] were kind enough to work out a way for me to exit my contract early and still work with the people who are my friends, that I love and work with every day. That’s people like the Eagles, Van Halen, Steely Dan, and Christina [Aguilera], the people you’d expect to be on that list.
Q: Will there be a new management company?
A: It’s my old management company — Azoffmusic Management continues on. That was the unit that I personally ran and that’s the unit I left with. [Azoffmusic staffers] Susan Markheim, Damian Smith, Tina Kennedy, Karim Karmi, Adam Flick, Allison Statter and Richard Palmese are the staff there.
Q: Will you be signing new artists, developing or otherwise?
A: It’s too early to predict right now. Right now, Tina Kennedy and I are going to work on Cassadee Pope, the lady that won “The Voice,” but it’s kind of too early to predict anything else.
Q: So what’s interesting to you, what would be fun?
A: It’s so new. I’d love to talk to you in four to six weeks into my new life. The phones are ringing, but I have no idea yet. It all happened so quickly that I haven’t really had a chance to take stock, see what’s out there and what I want to do.
Q: But your not going to just go play golf, are you?
A: F— no! The main reason I’m not going to just go play golf is I don’t play well enough. I always say if my job was this hard I would quit. Golf is too f—in’ hard for me to play any more golf.
Q: What can you say about Liberty Media’s strategic goal, in your view, as an observer, now?
A: Liberty has a long-term commitment to the company. I think they believe in the long-term prognosis of the technology and the prospects of Ticketmaster. They’re in for the long run.
Q: What can you say about the vacant chairman’s spot?
A: I don’t have a right to comment on that.
Q: Would you say that being in a public company chafed against your entrepreneurial spirit?
A: To me it was smothering. All I can say is public company life to me was smothering. This was not about people, it was about public company process, in the end. That’s the most honest appraisal about why I wanted to leave.
Q: What about your other boardships?
A: IMG is a private company. Clear Channel is a mostly private company. I’m going to stay on those boards, and I’m also going to go on the Starz board, because Liberty asked me to. They’ve been a great partner to me and because Liberty asked me to I’m going to do that.
Q: What was your highlight at Live Nation Entertainment?
A: The highlight was getting the [Ticketmaster/Live Nation] merger done. And, by the way, Ticketmaster’s renewal rate is incredible, Ticketmaster has done unbelievably well since the merger and I’m real proud of that.
Q: Any other highlights?
A: No, not really.
A: The sad part is I would have preferred to have purchased all of Front Line and kept the whole team together, because I dearly love all the artists and other managers at Front Line. But it just didn’t make any sense, there was no way to get that deal done.
Q: Did the roll up of Front Line management companies play out as you hoped?
A: If I had it to do over again I never would have merged with Ticketmaster.
Q: Why not?
A: Because further down the line I ended up in a situation where I had to break up Front Line because I merged with a public company and now I can’t figure out a way to buy it back. If you ask me what my biggest disappointment was, it’s that I made a decision to merge with Ticketmaster. I really wish we would have kept it a pure management play. That’s my biggest regret.
Q: Had you done that, what would have been the end game? Would you still be running Front Line?
A: I think so. Financially, it was a hugely successful move for lots of managers. I didn’t totally make that decision, the whole group of us did. But at the end of the day, if I could wind back the clock, that’s the one regret I’ve got.
Q: What’s the immediate future? What are you doing tonight?
A: I’m at my villa in Cabo at the El Dorado Beach & Golf Club. The Azoffs are spending New Year’s with the Henley family. We’re going to go down to the restaurant called the Palapa here at the club and have a nice dinner.
THE INVISIBLE HAND OF JOHN MALONE
The exit of veteran music manager Irving Azoff as executive chairman at Live Nation comes two months after another media veteran, Mel Karmazin, stepped down as chairman and CEO of SiriusXM Satellite Radio.
The person they have in common?
Veteran media investor John Malone, who in the last few years had become, respectively, each company’s largest individual shareholder.
Liberty Media’s highly desirable A shares have been skyrocketing since the end of May when they were selling for $82.34. On Dec. 31, the day Liberty acquired Azoff’s shares in Live Nation, it closed at $116.01.
With the legendary risk taker Malone in an even stronger position, Live Nation may finally become the Wall Street darling its architects envisioned when it split off from Clear Channel in December 2005. An entrepreneur at heart, Azoff made no secret of the fact he did not enjoy running a public company.
Liberty Media, one of Live Nation’s largest shareholders prior its acquisition of Azoff’s 1.7 million shares, will now have a 26.4 percent stake in the concert, ticketing and management behemoth. In 2011, Liberty Media A shares roses 54%, and in December financial analysts stated it continues to trade at significant high multiples compared with S&P 500 companies.
Could Live Nation, which has bounced between $8 and $11 over the last 52 weeks, finally see the stock price rise to levels expected when the merger was struck? Malone is always unemotional about achieving his return on investment, sometimes through very complex financial engineering. His recent interest in the music space will be no different.
Liberty Media chief executive Greg Maffei told Billboard in November, “We think the music space is a great space and there will always be an enduring interest in music.”
But arguably the interest in music is coincidental rather than strategic. The bigger picture for Malone and his lieutenant Maffei is that both Sirius and Live Nation (post-merger) are near-monopolies in their respective markets. In fact, Sirius has no U.S. competitor in satellite radio. And Live Nation is the strong market leader of a duopoly with AEG in live promotions, while Ticketmaster is completely dominant in its space.
This is the attraction to the man who made his wealth inventing regional cable TV monopolies from scratch.
Sirius, with Liberty owning 49.77 percent, and Live Nation “have found interesting ways to grow. Just because music is popular doesn’t always mean it’s possible to make money from it,” he said.
Malone has been bullish on Live Nation since its merger with Ticketmaster, purchasing 34.5 million shares of Live Nation Entertainment the day after the merger was approved in 2010. At the time, Liberty held a 30% stake in Ticketmaster, which dropped to 15% after the merger.
But last year Malone also supported the idea of taking the company private as its shares underperformed, with the business struggling through a weak economy that kept fans from attending some bigger events.
And, to be clear, Azoff is still going to be working with Malone in some capacity. He will be on the board of Malone’s soon-to-be spun-off cable network Starz. Azoff confirmed to Billboard he will still be joining the board and said he had enjoyed working with Liberty Media.
Indeed, if Azoff is ever looking for financing for expanding any of his proposed new ventures beyond music, he could always turn to Malone.
Malone built a fortune in his cable television company TCI, selling it to AT&T for $54 billion in 1999. A master at acquisitions — he is the largest land owner in the U.S. – he has battled with the like of former Vice President Al Gore, Viacom’s Sumner Redstone and the man with whom is most closely associated (sometimes as friend and others as an enemy), Barry Diller, the man who handed over the reins at Ticketmaster to Azoff.
Less than three weeks ago, Malone’s Liberty Interactive purchased Diller’s 4.8 million shares inTripAdvisor, the nation’s largest travel advisory site. In some ways the Live Nation deal feels like history repeating: Diller’s Citysearch concept in the 1990s owed to the combination of consumers desiring tickets and travel destination information.
While Malone has publicly stated that the sports industry is out of control in terms of costs, Liberty is interested in looking at some of the holdings within Phil Anschutz’s Anschutz Entertainment Group, whose assets include Los Angeles’ Staples Center and AEG Live, the No.2 live entertainment business after Live Nation.
“Phil Anschutz has built a very interesting portfolio of businesses and assets, some of which fit in with our existing businesses,” Maffei said. “But I’m not sure if we’ll have the ability or rather be allowed to buy some of those assets that fit in with Live Nation, because of the regulatory scrutiny which it already faced during the Ticketmaster merger.”