LAYOFFS ARE FEARED AT LIVE NATION
Michael Cohl’s abrupt departure as chairman of Live Nation has sent shockwaves through the concert promoter’s ranks, with employees of the unit Cohl led fearing layoffs and CEO Michael Rapino being accused of waffling on the firm’s commitment to mega deals, The Post has learned.
Live Nation’s board is scheduled to meet today to go over the final details of Cohl’s resignation and discuss what rights, or lack thereof, he has regarding artists he brought to the company, sources inside the company told The Post.
Cohl led the Artist Nation division, which was set up to house Madonna, Jay-Z and the other artists Live Nation is expected to sign to so-called 360 deals, which include recording, touring and merchandising.
“There’s a lot of confusion about the move and what it means for [the Artist Nation] strategy,” said one Live Nation insider.
As part of the unit’s launch, Live Nation staffed up on promotion and distribution executives, radio consultants and others. But without an album to work on until 2010 at the earliest, sources said not all of the Artist Nation employees would survive until then.
“A lot of the people in that division are going to be let go,” said one source close to Live Nation.
A Live Nation spokesman declined comment.
While some say the rift between Cohl and Rapino involved the number and kinds of acts Live Nation was looking to sign to 360 deals, others believe it had more to do with Wall Street expectations.
“Wall Street perception is crucial for Live Nation, and while Rapino will continue to do 360 deals, they won’t be of the ‘bet the farm’ variety economically,” said Three Rings president Jeff Rabhan, who manages Michelle Branch, Kelis and others. Madonna’s deal was for a whopping $120 million.
The company insider told The Post last week that Rapino is intensely focused on trying to exceed Wall Street’s expectations for 2008. Live Nation’s stock price of $11.19 is down 51.3 percent in the last year.
“He’s talking out of both sides of his mouth,” said another source close to Live Nation of Rapino, noting that he’s been championing 360 deals to Wall Street for the last year but then turned around and fired the driving force behind those deals.
A Rapino defender dismissed the notion that Live Nation’s deals were negatively impacting Wall Street’s view, but conceded that Rapino does have to treat the balance sheet more conservatively than the entrepreneurial-minded Cohl would have liked.