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The EvO:R Street Journal
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A Handful Of Dudes Control The Live Music Industry
by Jacob Ganz
More evidence last week that the cabal of gentlemen who control the music industry is really just playing a decades-long game of musical chairmen.
When entertainment mogul Barry Diller announced that he was leaving his position as chairman of Live Nation's board of directors last Tuesday, Live Nation's executive chairman Irving Azoff poo-poo'd reports that he and Diller had clashed, writing on Twitter that "It was always Barry Diller's intention to step down from LNE COB during first year after TM/LN merger."
That's the merger between Ticketmaster and Live Nation, which was approved by the Justice Department earlier this year. The company has had a volatile summer, capped by the announcement, in July, that its operating income would be at least $40 million lower in 2010 than it was in 2009.
Even so, Azoff has landed another plum gig: he's going to have a seat on the board of Clear Channel Communications. On Friday it was announced that Azoff (who is the CEO of Front Line management and may, in Diller's absence, become the chairman of Live Nation's board) will replace Kent R. Weldon, a partner in the private equity firm THL Partners, a part-owner of Clear Channel.
Diller, who is also the chairman of IAC/InterActiveCorp, will — according to The Hollywood Reporter — remain on Live Nation's board.
Anyone else feeling a little vertiginous? Perhaps a time line might be helpful? Let's break down the role each of these men play in the industry, year by year.
Something to keep in mind: This time line traces only one branch of the music industry's tangled family tree — the connections between these players could easily be extended to include, say, Vivendi Entertainment, which owns Universal Music Group, the biggest record label in the world.
- Lowry Mays and Red McCombs found San Antonio Broadcasting Company. It will eventually become Clear Channel.
- Albert Leffler, Peter Gadwa and Gordon Gunn found Ticketmaster.
- Microsoft founder Paul Allen purchases Ticketmaster. (Allen is the current owner of pro sports teams the Seattle Seahawks, Portland Trailblazers and Seattle Sounders, and founded the Experience Music Project in Seattle in 2000.)
- Barry Diller, previously the CEO of both Paramount Pictures and FOX Inc., is named Chairman and CEO of Silver King Communications. Later in the year, Silver King merges with Home Shopping Network and Savoy Pictures Entertainment to form HSN, inc.
- Ticketmaster.com makes its first online sale.
- HSN buys 50% of Ticketmaster from Paul Allen.
- HSN buys the USA Network from the Bronfman family. HSN is renamed USAI.
- A lawsuit alleging Ticketmaster has a monopoly on the ticketing distribution business goes to the Supreme Court. The court rules in Ticketmaster's favor.
- Diller's USAI acquires the remainder of Ticketmaster. The company will be renamed IAC/InterActive Corp. Today the company owns Citysearch, Urbanspoon, Match.com and The Daily Beast, among many other websites.
- Thomas H. Lee Partners (henceforth THL), a private equity firm, is part of a group of investors (also including Edgar Bronfman, Jr.'s Lexa Partners and Bain Partners) that buys the Warner Music Group, one of the five remaining "major" labels (that number, after Sony and BMG merged in 2004 and Sony bought out BMG in 2008, is now down to four.)
- THL backs Front Line Management's effort to consolidate music-management firms. Irving Azoff is the CEO of Front Line (which manages Miley Cyrus, Maroon 5, Christina Aguilera, Neil Diamond, Kings of Leon and many more).
- Clear Channel splits into three separate companies: Clear Channel Communications (a radio broadcaster), Clear Channel Outdoor (an advertiser) and Live Nation.
- Michael Rapino becomes the CEO of Live Nation, a collection of many regional promoters connected to a network of amphitheaters around the country.
- Ticketmaster buys a stake in Front Line. Azoff becomes CEO of Ticketmaster Entertainment.
- Summer: Ticketmaster spins off from IAC.
- Bain Partners and THL buy Clear Channel Communications for $18 billion.
- Ticketmaster and Live Nation announce their merger in February.
- United States Department of Justice approves the TM/LN merger in January. Michael Rapino becomes CEO/President of the new Live Nation Entertainment. Azoff becomes the executive chairman of LNE and CEO of Front Line. Diller is chairman of the board of LNE.
- Barry Diller announces his departure from Live Nation's board of directors last Tuesday. Three days later, Irving Azoff lands a spot on Clear Channel's board.
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