Live Nation Inc. The world's largest concert promoter is negotiating the exit of Chairman Michael Cohl, say people close to the situation.

Live Nation Chairman in Exit Talks
By ETHAN SMITH
June 20, 2008

An internal feud over strategy could soon be resolved at Live Nation Inc. The world's largest concert promoter is negotiating the exit of Chairman Michael Cohl, say people close to the situation.

Mr. Cohl and Chief Executive Michael Rapino have battled for weeks over novel contracts known as "360 deals," under which the company agrees to give superstar performers rich upfront payments in exchange for financial participation in virtually all their business, from recorded-music sales to image licensing. Live Nation has done such deals with artists like Madonna and Jay-Z, who have been promised $120 million and $150 million, respectively.


WireImage
Michael Cohl at a 2005 Rolling Stones promotional event.
Mr. Cohl wants to accelerate the pace of the deal-making, while Mr. Rapino wants to slow it down.

After watching the feud escalate last week, the company's board directed Mr. Cohl and the company's management to work out their differences quickly. That resolution appears likely to include an agreement as soon as next week on Mr. Cohl's departure, these people said.

Crucial terms have yet to be resolved, such as the size any financial settlement, or whether Live Nation would invoke a clause in Mr. Cohl's contract banning him for several years from competing with the company.

Neither Mr. Cohl nor Mr. Rapino could be reached for comment.

As founder, in 1973, of Toronto-based Concert Productions International Inc., Mr. Cohl has helped shape the financial landscape of the modern concert business, enlisting corporate sponsors to underwrite production costs and helping usher in the era of the $500 concert ticket.

Mr. Cohl joined Live Nation last year, becoming its chairman and largest individual shareholder, after Live Nation bought his company for $123 million in stock and $10 million cash. When tensions with Mr. Rapino first surfaced, say people familiar with the matter, Mr. Cohl initially tried to buy his company back from Live Nation. But the parties couldn't agree on a price, and Live Nation indicated it would enforce a non-compete agreement that would keep Mr. Cohl out of concert promotion for eight years after his departure.

In November, Mr. Cohl defended the rich valuations of the 360 deals to investors by saying they were "cross collateralized." In other words, $17.5 million per album for Madonna might sound excessive, but he said it wasn't when factoring in the payout from touring or merchandise sales.

He said Live Nation expected to gross $1 billion from Madonna-related business during the 10-year contact. However, since the deal was unveiled in October, Live Nation's stock has fallen 44%