Diemazz

Live Nation, Inc.

Type	Public (NYSE: LYV)
Founded	2005
Headquarters	Beverly Hills, California
Area served	Worldwide
Key people	Michael Rapino (President), (CEO) & (Director) Arthur Fogel (Chairman)
Industry	Entertainment
Products	Concerts
Market cap	US$ 311.98 million (2008)
Revenue	▲ US$ 4.184 billion (2007)
Operating income	▲ US$ 82.14 million (2007)
Net income	▲ US$ -11.94 million (2007)
Total assets	▲ US$ 2.752 billion (2007)
Total equity	▲ US$ 907 million (2007)
Employees	Full-time: 4,700 Part-time: 15,900
Website	LiveNation.com

Live Nation, Inc. NYSE: LYV is a live events company based in Beverly Hills, California. Live Nation formed in 2005 by a spin-off from Clear Channel Communications. The present CEO of the company is Michael Rapino.

Mainly a concert promoter, Live Nation "signs" artist as a "record label", but predominantly takes the role of a promoter, rather than "owner of music". The deal with U2 and Madonna for example does not include copyright of the artists' future recordings. The 2007 deal signed with Jay-Z includes the rapper's future recordings. Other artists that recently signed with Live Nation include Nickelback and Shakira.^[1][2]

Business

In 2005, Live Nation promoted or produced over 28,500 events, including music concerts, theatrical shows, specialized motor sports and other events, with total attendance exceeding 61 million. As of September 30, 2005, Live Nation owned or operated 117 venues, consisting of 75 US and 42 international venues. These venues include 39 amphitheatres, 58 theatres, 14 clubs, 4 arenas and 2 festival sites. In addition, through equity, booking or similar arrangements Live Nation has the right to book events at 33 additional venues.

Deals

In October 2007, Live Nation announced a new contract with pop singer Madonna throughout the next decade after leaving Warner Music and Warner Bros.. She will be the founding recording artist for the new music division Live Nation Artists, formerly Artist Nation. Shakira signed a contract with Live Nation in July 2008. The singer would have to fulfill two more albums and a greatest hits cd under her old contract with Sony BMG, but all touring and other aspects of the singers musical career would be in effect with the Live Nation contract.^[3]

In January, 2008, Live Nation sold its North American theatrical business (including the Broadway Across America business) to Key Brand Entertainment for $90.4 million. Key Brand Entertainment is a private investment company owned by British theater producer John Gore and led by senior entertainment industry executive Tom McGrath.^[4]

In April 2008 a deal for $150 million deal between Jay-Z and Live Nation was confirmed. The deal covers financing of Jay-Z's own entertainment venture, live shows, tours and future recordings for the next 10 years.^[1]

House of Blues

In 2006 Live Nation acquired House of Blues. Currently there are 12 House of Blues venues located in Houston, New Orleans, Los Angeles, Chicago, Myrtle Beach, Orlando, Las Vegas, Anaheim, Cleveland, San Diego, Atlantic City and Dallas. An additional HOB club is being planned for Boston. House of Blues is headed by President Deb Eybers.

Controversy

As a previous subsidiary of Clear Channel Communications under the Clear Channel Entertainment name, Live Nation was party to some highly visible controversies. The 2005 SEC filing for the creation of Live Nation listed several reasons for pursuing the split, including avoiding regulatory and legal pitfalls faced by Clear Channel.

Live music recordings

In 2004, Clear Channel acquired a key patent in the process of producing Instant Live recordings, in which a live performance is recorded directly from the sound engineer's console during the show, and then rapidly burned on CD so that audience members can buy copies of the show as they are leaving the venue. This had been intended to provide additional revenue to the artist, venue, and promoter, as well as stifle the demand for unauthorized bootleg concert recordings made by audience members for profit. However, some media critics, as well as smaller business rivals, believed that Clear Channel was using the patent (on the process of adding cues to the beginning and ending of tracks during recording, so that the concert is not burned as a single enormous track) to drive competitors out of business or force them to pay licensing fees, even if they do not use precisely the same process. The patent was transferred to Live Nation when Clear Channel Entertainment was spun off, [2] but the claims of the patent were cancelled on March 13, 2007,[3] after the patent owner failed to respond to a final office action in an inter partes reexamination proceeding. All originally issued claims were rejected as being anticipated or rendered obvious by earlier publications for products developed by Telex.[4]

Corporate governance

Current members of the board of directors of Live Nation are: Ariel Emanuel, Jeffrey T. Hinson, L. Lowry Mays, Randall T. Mays, Connie McCombs McNab, James S. Kahan, Ted Enloe, Harvey Weinstein, and Michael Rapino^[5]

Live Nation Music Group and Live Nation Artists

Live Nation is currently constructing a physical recording label, Live Nation Artists, which will be a division of Live Nation Music Group. The company is expected to become a major rival against EMI, Sony BMG, Universal Music Group and Warner Music Group with artists such as U2, Madonna, Jay-Z, Shakira and Nickelback.

As of July 30, 2008, CEO Michael Rapino is considering doing licensing deals on an artist-by-artist basis, a source inside Live Nation said. Under that scenario, Warner Music Group could end up handling the marketing, promotion and distribution of albums by the very acts that defected from it to join Live Nation: Nickelback and Madonna. "Rapino wants to outsource everything," said a second source close to the situation. "He doesn't want to build an infrastructure or carry any overhead." The move is mirrored after the "rent-a-system" model used in Hollywood, whereby one studio produces a movie but licenses all the other functions to another studio that already has a distribution and marketing infrastructure. ^[6]

Live Nation's talks, which sources say are still in their early stages, represent the latest retrenchment from the strategy of former chairman Michael Cohl, who sought to transform the touring giant into a multi-faceted powerhouse, including a record company. News of the potential outsourcing move follows last week's dismissal of industry veterans Bob Ezrin, Bob Cahill and Bill Hein, all of whom were Artist Nation employees hired by Cohl to create a label infrastructure for Live Nation's newly signed acts. Instead of banking all the upside on album sales, as was once envisioned with these so-called "360 deals," Live Nation would likely collect a less lucrative outsourcing royalty of between 25 percent and 35 percent, based on other industry licensing deals. It would then be responsible for using that money to pay the artist's royalty - a fee that, at the superstar level, can come close to equaling the licensing royalty the company is apt to get from a label. Sources cautioned, however, that without a new album due to Live Nation for at least 18 months, the company is in no rush to make a decision. ^[6]

On 31 March 2008, it was confirmed that Live Nation signed a 12 year deal with U2 worth an estimated $100 million (£50 million).^[7] The deal includes Live Nation controlling the band's merchandise, sponsoring and their official website. In a contractual agreement with Live Nation signed in March 2008, the parties agreed that the band would receive $25 million for 1.6 million shares of the company; as of 17 December 2008, those shares were only worth just over $6 million. It was reported on 18 December 2008 that Live Nation, honoring their financial commitment, bought back the shares at a loss of $19 million.^[8] The company hopes to recoup their losses with the release of and tour for U2's next album, "No Line on the Horizon.

Top executives

• Michael Rapino – chief executive officer; married to Jolene Blalock
• Kathy Willard – Chief Financial Officer and Chief Operating Officer of MacDonalds
• Jason Garner – CEO, NA Music
• Alan Ridgeway – CEO, International Music
• Nathan Hubbard – CEO, Ticketing
• Russell Wallach – President, Live Nation Alliances
• Michael Rowles – Executive Vice President and General Counsel
• Arthur Fogel – Chairman of Global Music
• Thomas O. Johansson – Chairman, International Music
• Bob Ezrin - Chairman, Live Nation Artists Recording Division
• Tres Thomas - Senior V.P., global touring
• Kate Ramos - S.V.P., global touring

Companies

United States

• Live Nation owns SFX Entertainment, providing venue and artist management. It owns, operates and/or exclusively books 135 live entertainment venues, including 43 in Europe, along with producing high profile events such as Super Bowl halftime shows. It also represents major music artists.
• Owned Monster Jam, a promoter of monster truck races and other indoor motorsports. Live Nation also owned several trucks and the rights to several trucks running at these events, including Grave Digger, Superman and Maximum Destruction. Now owned by Feld Entertainment, divested in September 2008.
• Produces sporting events: 84 Lumber Classic of Pennsylvania; Legg Mason Tennis Classic; ADT Skills Challenge; American Century Golf Championship; THQ World Supercross GP; National Arenacross Series; IFMA Freestyle Motocross; and IHRA Drag Racing
• Produces concerts and festivals: Great New York State Fair, Ozzfest, Jägermeister Music Tour, and Music Midtown (Atlanta) and in the UK Download at Donington, Hyde Park Calling and Wireless Festival. Through its LN/Gaiety subsidiary it also manages the Festival Republic festivals at Reading and Leeds.
• In July 2006 Live Nation announced it has entered into a definitive merger agreement to acquire HOB Entertainment, Inc., the operator of the House of Blues chain of music halls and restaurants.
• On October 16, 2007, Live Nation announced it signed a $120 million, 10-year global partnership contract with pop artist Madonna who will become the founding artist in its new Artist Nation division. The deal consists of all future music and music-related businesses including albums, concert tours, merchandising, fan club/web site, DVDs, music-related television and film projects, and associated sponsorship agreements.
• Live Nation owned the aforementioned Broadway Across America series, divested in January, 2008.
• On March 31, 2008, Live Nation announced it signed a 12-year partnership contract with Irish rock band U2, after quitting Island Records. They wil expire in 2020.
• On April 3, 2008, Live Nation announced it signed a 10-year, $150 million music deal with multi-platinum rap artist and entrepreneur, Jay-Z. They wil expire in 2018.
• In July, 2008, Live Nation announced it signed a 3-album deal with multi-platinum, Canadian rock band, Nickelback, after quitting Roadrunner Records.

Worldwide

• Acquired Italian music promoters Milano Concerti and Friends & Partners Agency.
• Worldwide subsidiaries include Welldone Agency & Promotion (Finland), dkbMotor (Denmark), EMA Telstar (Sweden) and Gunnar Eide Concerts (Norway).
• Live Nation's subsidiary Mojo Concerts is the biggest organiser of concerts in The Netherlands with over 200 concerts and a total of a million visitors a year. Well known festivals include Pinkpop, Lowlands, Arrow Rock Festival and North Sea Jazz.
• Owns Clear Channel Entertainment do Brasil Ltda, a Brazilian music promotion and production company
• Acquires Music and Entertainment producers GAMERCO, the biggest Spanish promotion and production company.

• In the United Kingdom, as Live Nation UK, owns:
  • Festivals called Download, Wireless and Hyde Park Calling
  • A stake in Festival Republic, and thus interests in:
    • Several music festivals, including the production of Glastonbury Festival, Reading and Leeds Festivals, Latitude Festival
    • Some medium-sized London music venues, including the London Astoria . In March 2007 Live Nation/Gaiety bought a majority share in a further 10 music venues from the Academy Music Group including the Brixton Academy and Shepherds Bush Empire.
  • Management and operations at the London's Wembley Arena, Cardiff International Arena and the Sheffield Arena.
  • A large majority of the UK's biggest regional theatre houses including the Sunderland Empire Theatre, Palace Theatre, Manchester, Alexandra Theatre in Birmingham, Lyceum Theatre, London, Dominion Theatre, Edinburgh Playhouse, Liverpool Empire, New Theatre Oxford and Bristol Hippodrome.
  • A concert promotion business which promotes large outdoor concerts in Hyde Park, London, as well as numerous small and medium concert venues across the country.
• In Ireland, Live Nation own a half share in the The O2, Dublin - formally known as The Point Arena.
• In Belgium, Live Nation organises big festivals, like Rock Werchter and Graspop Metal Meeting.
• In Canada, Pemberton Festival was launched in July 2008 by Live Nation.

See also

• Live Nation UK
• Instant Live

Sources

• Live Nation rocks the music industry Paul Sloan, Fortune Magazine, November 30 2007. Accessed July 2008
• Clear Channel Communications, Inc CCE Spinco, Inc. Common Stock Issue. At Us Government Archives. Accessed July 2008

External links

• LiveNation.com
• LiveNation Career Site
• LiveNation.co.uk
• Live Nation TV
• Broadway Across America web site
• Broadway Across Canada web site
• Live Nation investor web site
• Live Nation takes over Clear Channel's concerts -- The Boston Globe

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