Nation domination

 

Live Nation calls itself 'the future of the music business'. But as the global consortium finalises its plans for Ireland, will music fans ultimately feel the pinch, asks Jim Carroll.

For Irish concert-goers, 2008 will be the year of getting to know Live Nation. Worldwide, it is a company that styles itself as "the future of the music business". It owns or operates more than 170 live venues, promotes in excess of 30,000 events each year and has taken over music promoters, theatrical producers and festivals in the US, Brazil and Europe.

In Ireland, the company's only business interest to date is the management of Dublin's Point Depot. However, its local footprint is set to increase significantly, thanks to two deals in the Irish live entertainment sector.

In October, property developer Harry Crosbie announced in an interview with this newspaper that Live Nation was set to manage his four Dublin venues. In addition to the Point (which is currently being redeveloped and will reopen as a 15,000-capacity arena in late 2008), this new arrangement would also take in the Crosbie-owned Vicar Street.

Two mooted new venues, the Daniel Libeskind-designed 2,000-capacity theatre at Grand Canal Square and Vicar Street 2, slated to be built near the redeveloped Point, are also part of the deal.

Later that month, it emerged that Live Nation was also in negotiations with Denis Desmond to acquire a majority stakeholding in MCD, the country's largest live music company.

Live Nation and Desmond are already business partners, having established the Hamsard investment vehicle to acquire the Mean Fiddler business venues and festivals in the UK in 2005 and, earlier this year, to take over the 10 venues owned by the Academy Group.

There has been speculation for quite some time that Live Nation was interested in acquiring MCD, but Desmond spurned all previous approaches.

As Live Nation came into being only in 2005, it is probably a new name to most concert-goers. However, the same cannot be be said about Clear Channel, the company which owned Live Nation's business interests until a corporate restructuring in December 2005.

Before this, Live Nation's venues, festivals, theatrical productions and sporting events were part of Clear Channel's gigantic entertainment portfolio.

Clear Channel began when company founder and Texan businessman Lowry Mays purchased a San Antonio radio station in 1972.

The business currently owns more than 1,100 radio stations throughout the United States (in addition to 240 stations in Australia, New Zealand and Mexico), 51 TV stations in the US and nearly one million advertising sites in more than 60 countries worldwide.

Clear Channel moved into live entertainment when it took over American company SFX Concerts in 2002, a purchase which proved highly controversial.

The company attracted criticism from consumers, music industry professionals and public representatives concerned at seeing so much media and entertainment clout vested in one company. There were allegations of monopolistic practices by Clear Channel, with many pointing to how its ownership of both concert venues and radio stations allowed it enormous promotional advantages over its competitors.

One anti-trust case which captured this unease was taken by independent Denver promoter Jesse Morreale. He argued that Clear Channel was preventing other promoters operating in the city by overpaying acts, using its own radio stations to promote its shows unfairly, cross-subsidising loss-making tours from other sources and forcing acts to use Clear Channel or risk a radio boycott. The case was settled by Clear Channel before it could go to trial.

A US senate committee, examining competition in the radio and concert industries in February 2003, expressed concern about how Clear Channel operated. The US Justice Department subsequently began anti-trust investigations into how the company operated in both the radio and concert promotion sectors, but closed these investigations in 2005 without taking any further action.

Clear Channel's decision to spin off the live event side of the business into a new company was seen by many as an attempt to sidestep such criticisms.

Live Nation has lost little time since its inception in making an impact. Besides buying out local promoters in various markets worldwide and increasing the number of venues under its control, it has also made an audacious raid on the record industry's domain.

A few weeks ago, the company confirmed a groundbreaking deal with Madonna. The 10-year partnership covers all of the artist's future music and music-related business ventures, including touring, merchandising, websites and sponsorship agreements.

The company established the Artist Nation division to manage the activities of Madonna and the other acts it plans to sign to such so-called "360" deals.

Such a partnership will probably see Madonna, who will earn a reputed $120 million (€80.5 million) from the deal, touring quite a lot in the future, which is where promoters such as MCD come into the picture. Her visit to Slane Castle in 2004 was one of the hundreds of shows promoted every year by MCD Concerts.

Denis Desmond's Irish company is an obvious target for Live Nation because of its huge market share (an estimated 70 per cent of the Irish live music market), its portfolio of standalone events such as Oxegen and its vast experience in promoting and producing both large outdoor festivals and arena shows.

The company's first big show was a Slane Castle gig with Thin Lizzy in 1981, but MCD's dominant position did not occur overnight. While rival promoters, including the late Jim Aiken, concentrated on booking big names such as Bob Dylan and Bruce Springsteen, Desmond built relationships with London agents and booked rising indie and alternative acts throughout the 1980s and 1990s. Many of these acts, such as REM and Red Hot Chili Peppers, went on to become superstars and stayed loyal to Desmond.

The MCD-promoted Féile festivals in Thurles, Co Tipperary, in the early 1990s were hugely successful, Desmond spotting a new demand for weekend music festivals from a generation too young to have experienced events such as Lisdoonvarna. Féile gave way to Witnness and then to Oxegen.

The company's growth over the past 10 years has been spectacular, as much due to its control of a number of key Dublin venues, such as the Olympia and Ambassador, as to headline-grabbing shows from U2, Robbie Williams or The Police.

But the mooted takeover by Live Nation is coming after two summers when the MCD brand has been in the spotlight for the wrong reasons.

If the company thought it had had a rough ride from the media and public after alleged events on the campsite at Oxegen 2006, it was nothing compared with the backlash experienced after the Barbra Streisand debacle in Co Kildare last July.

In an unprecedented move, a special committee was established to sift through 1,364 complaints from the public about traffic delays, event mismanagement, lack of seating, inadequate stewarding and poor car-parking facilities.

Desmond has picked an interesting time to be talking cash with Live Nation. Globally, the live music sector is in rude health. People may not be buying CDs, but they're buying concert tickets like never before and Irish music fans have proven to be loyal MCD customers over the years.

The Irish promoter is a hands-on operator who likes to know exactly what's going on in every aspect of the business. Desmond has a huge number of other investments (see panel below), but it's impossible to imagine him walking away from the Irish live music business. After all, it is widely acknowledged by everyone in the industry that MCD would not be the company it is today without him at the helm.

Waht Live Nation would get for its cash is also the subject of speculation. It will certainly get a share of the MCD brand and events such as Oxegen, but it is not known if the venues operated by MCD or Desmond's extensive UK music business interests will form part of the deal.

MCD's parent company is Gaiety Investments, whose directors are Desmond and his wife, Caroline Downey. The company owns the Olympia and Gaiety theatres in Dublin and also has shareholdings in UK music festivals (T in the Park, V Festival), venues (King Tut's Wah Wah Hut in Glasgow) and the DF Concerts company in Scotland. Desmond also operates the Spirit nightclub on Middle Abbey Street through Liffeybeat Ltd.

One of MCD's Dublin venues which Live Nation will not be adding to its portfolio is the Ambassador. Dublin City Council recently announced plans to lease this building as a library to replace the Ilac Shopping Centre library, thus ending its days as a live music venue.

Few involved in the various deals, though, are likely to have taken the interests of the Irish music fan and theatregoer into consideration. But there is little doubt that the changes ahead will affect this constituency.

For a start, the arrival of the Live Nation behemoth on the scene will certainly increase already keen competition among rival promoters in the Irish marketplace for acts for standalone shows and festivals. The company's financial clout alone will have huge implications.

It will probably mean even more shows on the calendar as promoters seek to fill their various venues. But as such competition tends to inflate the fees paid to artists, this will inevitably lead to higher ticket prices as the promoter seeks to recoup costs.

There may even be a temptation by some promoters-cum-venue-operators to increase car-parking, food and beverage charges to further claw back their costs.

It would seem that complaining about ticket prices, which has become a regular feature on radio shows and online forums, may continue unabated when Live Nation comes to town.