Live Nation: Cohl Vs. Rapino

Two of the head honchos at Live Nation, the world’s largest concert promotion company, were involved in a family feud recently over the company’s costly strategy aimed at winning over artists by offering them large amounts of money. Two of the head honchos at Live Nation, the world’s largest concert promotion company, were involved in a family feud recently over the company’s costly strategy aimed at winning over artists by offering them large amounts of money. Michael Cohl, Chairman of the Board of Live Nation, and Live Nation’s CEO Michael Rapino became embroiled in an epic hissy fit that almost lead to Cohl’s resignation.

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The argument was over Live Nation’s approach to making deals with artists. Cohl, famous for his successful global touring model, in favor of striking while the iron is hot, wanted to sign 15-plus artists quickly to ensure maximum volume of business for the company. Rapino, reeling from the speed at which money was more frequently flying out the door of Live Nation, contended that slower, more secure deals with artists would be the best policy. His hesitation to cooperate with Cohl’s plan is warranted: Live Nation stock prices have fallen 44 percent since the $120 million deal with Madonna last October. Even more extravagant is the deal made with Jay-Z, rumored to pay him $150 million in exchange for promotion rights. Also rumored to be in the works: a global tour deal with Shakira of similar magnitude as the deals made with Madonna and Jay-Z.

As disagreements mounted, Rapino and Cohl refused communication with one another and Cohl threatened to leave the company and take his clients back to his hometown of Miami, where he would supposedly upstart a new company. However, contracts get in the way of such things. Cohl was reminded that his contract with Live Nation prohibited him from competitive business with Live Nation if he were to leave the company. Needless to say, Cohl has decided to stay with Live Nation to see if he and Rapino can work things out.

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