Live Nation

House of Blues is headed by President Deb Eybers.

[edit] Controversy

As a previous subsidiary of Clear Channel Communications under the Clear Channel Entertainment name, Live Nation was party to some highly visible controversies. The 2005 SEC filing for the creation of Live Nation listed several reasons for pursuing the split, including avoiding regulatory and legal pitfalls faced by Clear Channel.

[edit] Live music recordings

In 2004, Clear Channel acquired a key patent in the process of producing Instant Live recordings, in which a live performance is recorded directly from the sound engineer's console during the show, and then rapidly burned on CD so that audience members can buy copies of the show as they are leaving the venue. This had been intended to provide additional revenue to the artist, venue, and promoter, as well as stifle the demand for unauthorized bootleg concert recordings made by audience members for profit. However, some media critics, as well as smaller business rivals, believed that Clear Channel was using the patent (on the process of adding cues to the beginning and ending of tracks during recording, so that the concert is not burned as a single enormous track) to drive competitors out of business or force them to pay licensing fees, even if they do not use precisely the same process. The patent was transferred to Live Nation when Clear Channel Entertainment was spun off, [1] but the claims of the patent were cancelled on March 13, 2007,[2] after the patent owner failed to respond to a final office action in an inter partes reexamination proceeding. All originally issued claims were rejected as being anticipated or rendered obvious by earlier publications for products developed by Telex.[3]

[edit] Corporate governance

Current members of the board of directors of Live Nation are: Ariel Emanuel, Jeffrey T. Hinson, L. Lowry Mays, Randall T. Mays, Connie McCombs McNab, James S. Kahan, Ted Enloe, Mark Shapiro, and Michael Rapino^[8]

[edit] Live Nation International Music and Live Nation Artists

Live Nation is currently constructing a physical recording label^{[citation needed]}, Live Nation Artists, which will be a division of Live Nation International Music. The company is expected to become a major rival against EMI, Sony Music, Universal Music Group and Warner Music Group with artists such as U2, Madonna, Jay-Z, Shakira and Nickelback.

As of July 30, 2008, CEO Michael Rapino is considering doing licensing deals on an artist-by-artist basis, a source inside Live Nation said. Under that scenario, Warner Music Group could end up handling the marketing, promotion and distribution of albums by the very acts that defected from it to join Live Nation: Nickelback and Madonna. "Rapino wants to outsource everything," said a second source close to the situation. "He doesn't want to build an infrastructure or carry any overhead." The move is mirrored after the "rent-a-system" model used in Hollywood, whereby one studio produces a movie but licenses all the other functions to another studio that already has a distribution and marketing infrastructure. ^[9]

Live Nation's talks, which sources say are still in their early stages, represent the latest retrenchment from the strategy of former chairman Michael Cohl, who sought to transform the touring giant into a multi-faceted powerhouse, including a record company. News of the potential outsourcing move follows last week's dismissal of industry veterans Bob Ezrin, Bob Cahill and Bill Hein, all of whom were Artist Nation employees hired by Cohl to create a label infrastructure for Live Nation's newly signed acts. Instead of banking all the upside on album sales, as was once envisioned with these so-called "360 deals," Live Nation would likely collect a less lucrative outsourcing royalty of between 25 percent and 35 percent, based on other industry licensing deals. It would then be responsible for using that money to pay the artist's royalty - a fee that, at the superstar level, can come close to equaling the licensing royalty the company is apt to get from a label. Sources cautioned, however, that without a new album due to Live Nation for at least 18 months, the company is in no rush to make a decision. ^[9]

On 31 March 2008, it was confirmed that Live Nation signed a 12 year deal with U2 worth an estimated $100 million (£70 million).^[10] The deal includes Live Nation controlling the band's merchandise, sponsoring and their official website. In a contractual agreement with Live Nation signed in March 2008, the parties agreed that the band would receive $25 million for 1.6 million shares of the company; as of 17 December 2008, those shares were only worth just over $6 million. It was reported on 18 December 2008 that Live Nation, honoring their financial commitment, bought back the shares at a loss of $19 million.^[11] The company hopes to recoup their losses with the release of and tour for U2's next album, "No Line on the Horizon".

[edit] Top executives^[12][13]