Exclusive Q&A With Michael Rapino, Live Nation CEO: 'You Can't Replace Irving Azoff...'
A few days before Irving Azoff's abrupt resignation as chairman of Live Nation Entertainment, Live Nation CEO Michael Rapino re-upped with a new five-year contract. In his only interview following Azoff's resignation, Rapino, who has steered Live Nation since before it spun off from previous parent Clear Channel in 2005 and is largely credited with creating the LN business model, talks about what why he re-signed, what Azoff's departure means to Live Nation, and what's coming next.
Irving Azoff on Leaving Live Nation, Why He Regrets Ticketmaster Merger, More
Billboard: First, congratulations on your new contract. What appeals to you about the future of Live Nation?
Michael Rapino: When we set out to merge these businesses (Live Nation and Ticketmaster/Front Line), the biggest revolution we wanted to accomplish was, could we re-invest and turn Ticketmaster around and launch some new technology and products to enhance the experience, etc. I'm 50% into that right now, and I want to see the mission finished. I want to see us launch our new platform and products in '13 and '14, which are really going to be the biggest growth behind this whole new business model. I want to see that come in to place and get those new products on the table. That's the icing on the cake on this new business we put together two years ago, and I want to see it through. It's time to finish the play.
Was the vision for the Live Nation model already in place before the Ticketmaster merger, and it would have proceeded similarly with Live Nation Ticketing had the merger not come to bear?
When we launched Live Nation out of Clear Channel, there were three core elements that I said were going to be the foundations to growing our business and changing the model. The first-which sounds so obvious now-was it's a global business and we had to go global. That sounds so simple now, but nine years ago it wasn't. There was nobody global [then], and we've gone from two to 41 countries in the last eight years, with the majority of our revenue now coming from overseas. We've still got lots of room to grow globally.
Number two, I said this is an advertising business, not just with signs at the amphitheaters. This is the NFL, this is a true advertising/sponsorship business that can scale and be a big part of our revenue with the advantage of having all those great concerts. [We've grown] from a few sponsors to 800 sponsors, well over $150 million in profit, we now have 300 sales people around the world selling online advertising, strategic relationships, and on-site. That's grown from almost nothing to this.
And the third part was we had to become a 'B to C' company. We had to move into ticketing and own that consumer relationship. Yes, we were going to do it on our own, and we proceeded with that vision. I think because we did that, and didn't renew with Ticketmaster [when the contract with expired in 2008], it gave us the move on the chess board that got Ticketmaster to the table for us to get a deal done to help us kind of speed up that strategy, with scale, through the merger. We've been on that vision for a while. We've been a bit on hold the last two years because our old technology just wasn't equipped for us to innovate. We're now halfway through and will launch in July our new mobile and online features at Ticketmaster, which are our first new products to come from the platform, and I'll think they'll start to become real steps forward in delivering a cleaner, better solution for fans to buy concert tickets, share them, print them at home, exchange them on mobile devices, transfer them, all of the technology that lets us bring that into the year 2013. That's the piece we're excited to keep our head down over the next two years and watch that platform come to life in a very innovative way.
Live Nation Extends CEO Michael Rapino's Contract, Raises Salary
If bringing in Ticketmaster is part of Irving Azoff's legacy at Live Nation, so is bringing in an artist management division in Front Line Management, which apparently wasn't originally part of the Live Nation plan.
You are right, the vision was never paramount on whether we had a management division, it was 'the concert promoter owns the front door called the ticket, you elevate that ticket experience with the consumer, you have a relationship, you can start selling more tickets and advertising.' The 360s or let's call it the Artist Nation division, versus Front Line, which came with Irving, we still [have] that today. We have a management division on the concert side I developed with Jay-Z called Roc Nation, which has between Roc Nation and [multirights deals] another 20 or so managers [and artists], from Rihanna, Shakira to Deadmau5. So any version of being in the management business... we think is just another diversified revenue stream that will help our business grow and kind of drives our cash flow and lets us re-invest in the overall business. We can't replace Irving, but [with] the rest of the management team, there are a lot of self-sufficient managers and businesses there where it's business as usual. These artist divisions were always run as separate businesses, the remaining 15 strong management companies have maintained their own independent names, their own independent staff, their own independent rosters. They've been operating independently underneath the Front Line division. They'll continue to run their businesses, I'll continue to support them, and we hope they'll continue to grow, add staff, add to their rosters, and continue to be a key component of our business.
Will the Front Line name continue?
At least a year ago we had changed Front Line into Artist Nation, we have been calling Irving's division Artist Nation. That includes the 360s and artist managers, it was our artist-centric name and artist-centric division, and includes artist management, merchandising, and VIP ticketing. We retain VIP ticketing, merchandise, [and] Irving has 10 artists, and we retain the remaining 250-plus artists and their individual units. It's business as usual for these individuals, who have all been running their own businesses with their own staffs. That's unaffected by the change, and those will all continue to move along plan. We remain committed to Artist Nation.
Business Matters: How Much Will Irving Azoff Be Missed on Live Nation's Bottom Line?
So what is the immediate impact of Azoff's departure?
You can't replace Irving Azoff, but the good news is underneath that division is a powerhouse of individual experienced managers, who have over 200 artists on their rosters, experienced pros who have been running their own businesses for years.
Are there any more surprises coming?
No, we're done. '13 is about putting new Ticketmaster stuff on the table, which is rolling out in June and July, that's our focus. The year looks good, our onsales are tracking way ahead of last year both internationally and in America, so '13 looks like a nice strong year for the concert business.