Live Nation sues ....
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Live Nation sues ex-head over non-compete deal
By CLAIRE ATKINSON
Last Updated: 4:58 AM, November 20, 2010
Posted: 10:55 PM, November 19, 2010
After pulling back on mega-million-dollar deals with superstars like Madonna and Jay-Z, Live Nation is now hauling one of the original supporters of that controversial strategy to court.
The music behemoth has slapped its former chairman and Broadway impresario Michael Cohl with a lawsuit accusing him of breaching a non-compete agreement signed when he exited Live Nation in 2008.
Cohl, a powerful concert promoter who is about to launch the most expensive show in Broadway history, "Spider-Man: Turn Off the Dark," is accused of failing to pay a $5.35 million fee that he agreed to as part of his exit from the concert giant.
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, Live Nation agreed to pay Madonna $120 million and Jay-Z $150 million.
The size of those deals has since been called into question, in particular after the concert promoter's merger this year with the dominant ticket seller, Ticketmaster. Live Nation struggled to fill seats over the summer as concert-goers balked at rising ticket prices.
With ticket sales and its share price slumping, Live Nation also struggled with egos and boardroom battles over the company's direction. In September, Chairman Barry Diller stepped in and sold his 2.5 million shares in the company.
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.
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.
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."
Cohl's troubled Spider-Man show is reported to cost a million dollars a week to produce. The start date has been delayed to Jan. 11 because of tricky technical work and safety concerns.
The lawsuit, first reported by The Hollywood Reporter, was filed Thursday in US District Court in Miami.
Live Nation shares rose 10 cents yesterday to close at $10.51.
Read more: http://www.nypost.com/p/news/business/recrimi_nation_TTN5QBgG75iSvJMrE1ahNP#ixzz15qu1aKXp
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