Maybe this had warning signs all over it.
But after just two years at the helm, Irving Azoff has now officially announced his departure from Live Nation, effective immediately. And this is no half-step: according to an official statement from the company (curiously issued to a half-drunken industry on December 31st), Chairman Azoff is resigning from the Live Nation Board of Directors and as an ’employee,’ while also divesting a substantial chunk of shares.
Concomitant with that departure, Liberty Media has purchased 1.7 million shares of Live Nation stock from Azoff, increasing its stake to 26.4%.
Amidst a raft of what nexts, Azoff issued the following statement:
“After successfully overseeing the integration of Live Nation and Ticketmaster over the past two years, my job here is done. We put together the leading company across concert promotion, ticketing, sponsorship and artist management and delivered the great results promised by the merger. I especially enjoyed my time with my partner Michael Rapino, and he has demonstrated the ability to lead this company from now on. I’m looking forward to returning to the entrepreneurial world and continuing to work with all my friends and colleagues at Live Nation.”
Azoff’s contract officially ended in 2014, which introduces a nice, princely parachute. According to SEC filings, Azoff is jumping with a near-$12 million payout, and accelerated diverstitures of roughly 2 million shares and 664,000 options.
There’s also the matter of Front Line Management, which introduces the possibility of another crafty play by Azoff involving a large corporate concern. According to the Wall Street Journal, Azoff will retain the ability to manage his own superstar clients, most notably the Eagles, while leaving the rest of Front Line in the hands of Live Nation. “It wouldn’t be the first time Mr. Azoff has sold his management company to a corporate employer, only to regain control for little or no money when he leaves,” noted the Journal’s Ethan Smith, once the subject of a fierce Twitter attack from Azoff himself. This time, Azoff was talking on good terms to Smith from a family vacation in Mexico.
But what really happens with Front Line, now wholly-owned by Live Nation after a $116 million final payment in 2011? Hits Magazine took it a step further, noting that serious questions surround the future of Front Line, now a seemingly less solid bet. Perhaps overdramatically, or perhaps dead-on, Hits pointed to an “impending wholesale exit of artists represented by Front Line,” while noting that “many key artists and managers associated with Front Line don’t have contracts with the company.”
Suddenly, a generously-updated contract for CEO Michael Rapino makes sense. Just days earlier, Live Nation renewed Rapino’s contract with a base salary bump to $2.3 million, and a number of changes to his stock compensation plan. Those changes were codified in a publicly-filed, SEC document.
Azoff is now primed for something more ‘entrepreneurial,’ and spoke (again to the Journal) of ripe opportunities ahead. That comes alongside relatively healthy funding levels for a broad number of music startups in 2012, a development hoisted by believers and the RIAA alike. As of December 31st, funding levels hovered around $620 million, a 34 percent bump over 2011 according to widely-cited stats compiled by Digital Music News.
The fun part comes when Azoff starts making big moves, friendly or unfriendly to Live Nation (and subject to various non-competes). Smith noted that Azoff was an ill-fit at the more zipped-down corporate culture at Live Nation, with stuff like practical jokes and Twitter-sparring incongruent with the company’s idea of a good time. But that sort of tomfoolery is beneficial in startup-land, where wild twists-and-turns often demand a completely opposite, light-footed approach. Indeed, that was part of the thinking behind Live Nation’s acquisition of BigChampagne, a another funky marriage between old-and-new that is just exiting honeymoon stage.
Looking ahead, Azoff’s exit could introduce all sorts of uncertainties back at the Live Nation ranch. That includes potential opportunities or pitfalls for the likes of Ticketmaster CEO Nathan Hubbard and even BigChampagne cofounder and livenation.com GM Eric Garland, just to name a few pieces on this chessboard.