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Focus: Live Nation

Published Wednesday 24 June 2009 at 11:25 by Michael Quinn

Michael Quinn takes a look at the company’s history, its current situation and increasing interest in live music, plus the portfolio of UK theatres it is putting up for sale

It had been on the cards for some time, but Live Nation’s decision to finally open wholesale bidding on its 17 venue-strong portfolio of UK-based theatres still promises to deliver a shock of seismic proportions to the British theatrical landscape.

The announcement is not altogether a surprise. Something like this had been expected since at least March 2007, when the company revealed its decision to sell off the majority of its North American theatres, its Broadway Across America touring series and its controlling share in the £22 million Las Vegas production of Phantom of the Opera.

When the £55 million sale was finalised in January last year (to British-born producer John Gore’s Key Brand Entertainment), Live Nation’s head of global theatre operations David Ian - who topped The Stage 100 list in 2005 and 2006, sharing the accolade on the latter occasion with Andrew Lloyd-Webber - announced his resignation from the company and the clock began ticking on its British operations in earnest.

Seventeen theatres - among them some of the UK’s best-known and loved venues, with a combined seating capacity of 30,700 seats - have now been put on the open market.

Given the different levels of Live Nation’s involvement - six theatres are owned outright, six are on leases of varying lengths, four are being operated on management contracts and one, the 2,100-seat Dominion Theatre in London, is co-owned with a 33% equity interest - it seems unlikely, but not altogether impossible, that the holdings will be bought as a single package.

Whatever shape it takes, the sale - if it goes ahead - looks certain to have potentially profound consequences for theatre owners, managers and audiences alike.

Live Nation started less than four years ago, in December 2005, when the US-based Clear Channel Entertainment split from its parent company, the billboard advertising and radio-accented Clear Channel Communications, then in its fourth decade. The new stand-alone company was to specialise in live theatre, music and sport. Its then stock of more than 20 British theatres made it the country’s largest theatre operator overnight.

The Los Angeles-based company met with a mixed reception in the UK. While former Theatre Management Association president and now a commissioning editor to The Stage, AK Bennett-Hunter, said the move was “to be welcomed”, theatre consultant Anthony Field expressed concern about Live Nation “both owning theatres and producing shows, because it corners the market”.

At the time it off-loaded the bulk of its US operations, a Live Nation spokesman hinted of possible developments to come when he implied that “certain tax restrictions associated with our spin-off from Clear Channel Communications” had militated against a simultaneous sale of its substantial footprint in the UK.

But there were early signs that Live Nation’s ambitions lay elsewhere and that a dominant theatre presence was not a part of its plans. Within a year, it had acquired the Academy Music Group in a joint bid with the Irish festival promoter Denis Desmond’s MCD Productions.

Prior to the de-merger, Clear Channel had already begun to steadily increase its profile in the UK’s live music sector. Its 2000 purchase of Apollo Leisure Group from its American owners, SFX (which Live Nation now owns) featured a number of arenas and music venues in addition to the theatre portfolio. Five years later it spent £38 million to secure the music venue and festival owner, the Mean Fiddler Group.

Later developments were to unambiguously point to Live Nation’s determination to situate itself solely within the live music industry. In late 2006, it bought a 15-year management deal for Wembley Arena. In May the following year, it sold its management rights to the Beck Theatre at Hayes in Middlesex to HQ Theatres, a joint venture between Qdos Entertainment and Hetherington Seelig.

More significantly, in December 2007, the company announced an unprecedented “360-degree” £75 million recording, touring, merchandising and marketing deal with music icon Madonna. Similar contracts quickly followed with U2, Radiohead, Shakira and Jay-Z.

Although currently under consideration by both the UK’s Competition Commission and the US Justice Department, its proposed merger with global ticketing giant Ticketmaster serves to underline Live Nation’s conviction that music is a more lucrative sector than the theatre. In 2008, it sold 50 million concert tickets in 33 countries.

For Live Nation, the decision to sell its UK theatres will free up time, energy and money that will now be dedicated to “transforming the concert business by expanding its concert platform into ticketing and building the industry’s first artist to fan, vertically-integrated concert platform”. What the repercussions of that ambition are for the UK’s theatre and live music sectors will become apparent in the months ahead.

Live Nation Theatres for sale:

Edinburgh Playhouse

Apollo Victoria, London

Liverpool Empire leased (expires 2127)

Dominion Theatre, London 33% equity interest

Lyceum Theatre, London leased (expires 2138)

Sunderland Empire managing (expires 2029)

Manchester Palace

Bristol Hippodrome

Manchester Opera House

New Theatre, Oxford leased (expires 2022)

Grimsby Auditorium managing (expires 2011)

Southport Theatre leased (expires 2012)

Leas Cliff Hall, Folkestone managing (expires 2023)

Princess Theatre, Torbay managing (expires 2058)

Birmingham Alexandra leased (expires 2014)

Grand Opera House, York

NT Studio, Oxford leased (expires 2021)

• The Stage’s print edition includes weekly industry news in our Biz2Biz section. The Stage is in print every Thursday and available from most major newsagents.

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