A Florida Judge has granted Michael Cohl permission to proceed with his multimillion dollar counter-lawsuit against ticketing giant Live Nation.
The high-profile lawsuit stems from Cohl’s 2008 resignation as Chairman of Live Nation regarding the direction the company was taking. Cohl was in favor of signing artists to 360 deals giving Live Nation a cut of all performers future revenue including record sales, tours, merchandise and licensing in exchange for large sum payments up-front. Live Nation had signed Jay-Z and Madonna to 360 deals at $150 million and $120 million, respectively.
CEO Michael Rapino and Cohl could not agree on how to move forward with such deals: Cohl wanting to sign more bands, Rapino preferring a slower approach.
The terms of Cohl’s contract stipulated a 10-year non-compete clause running until the year 2016. When he left Live Nation he was to receive a lump sum payment of $4.5 million for four years in consulting fees through June 2012.
Live Nation filed a $5.35 million lawsuit in November 2010 claiming a financial settlement was agreed upon by the two parties where Cohl would pay $9.85 million in installments to Live Nation in return for non-compete relief allowing Cohl to promote the tours of his biggest clients the Rolling Stones, Pink Floyd and Barbara Streisand in addition to working on certain types of Broadway shows.
In 2009, Cohl was asked to step in as producer for the struggling Broadway musical Spider-Man: Turn Off the Dark by Bono who is writing the music with U2 bandmate The Edge. The long-suffering musical has become the most expensive production in Broadway history with high running costs, numerous delays, complicated aerial stunts and cast injuries all before it has seen opening night - now estimated to be June 2011. The $65 million production, still in preview performances, is being widely panned by critics. I wouldn’t, however, count Michael Cohl out.
Being one of the most influential promoters in concert history, Cohl started his own company S2BN Entertainment two years ago. Current properties touring the world are award-winning Yo Gabba Gabba Live!, Rock of Ages, Bodies: The Exhibition and Fuerza Bruta, the international theatrical sensation from Argentina.
Also in late 2009 rumors began to swirl the Rolling Stones were heading back out on the road for a worldwide tour. The Stones’ last undertaking - the Bigger Bang Tour - ran from 2005-2007 becoming the second highest grossing tour of all time (beaten this weekend by U2's 360 Tour) earning $558 million.
Cohl has promoted every Rolling Stones tour since the 1989 Steel Wheels/Urban Jungle Tour even outbidding Bill Graham, their former promoter.
In January 2010, Cohl countersued claiming Live Nation interfered with his potential involvement with a tour thereby breaching the agreement.
With The Stones’ 50th Anniversary approaching in 2012 and promises of a new album in 2011 by Mick Jagger and Keith Richards, Cohl met with the band to discuss touring possibilities. Live Nation sent him the following letter on February 8, 2010:
"This letter is formal notice, pursuant to Section 1.9(b) of the [Letter] Agreement, that Live Nation has determined, in its reasonable judgment, that you will be unable to successfully negotiate the acquisition of the rights to promote the next Rolling Stones tour.
Therefore, as provided in Section 1.9 (b) of the [Letter] Agreement, Live Nation now has the free and unfettered right to hereafter bid or seek to obtain directly the right to promote the next concert tour of the Rolling Stones, whenever that may occur, for its own account without any duty to share, co-promote or jointly pursue with Cohl any such rights that Live Nation may acquire."
An email was sent to Cohl by Live Nation executive vice president Michael Rowles saying he, “must either obtain [Live Nation's] approval of any bids prior to submitting them to the band or...must be sure that the band is aware that any such bid is subject to subsequent approval and change," The Hollywood Reporter disclosed.
So what do the Rolling Stones have to say about this? Work it out yourselves gentlemen, they do not want to be in the middle. The band did send an official statement saying Cohl was, "neither their representative nor their promoter" and had "no firm plans to tour at this time."
Despite there being no firm plans to tour, Federal Judge Cecilia Altonaga ruled in Cohl’s favor.
"The mere statement by the Rolling Stones that they have no firm plans for a tour does not, at this stage in the proceedings, negate Defendants’ claim of damages. That the Rolling Stones may not have made any firm plans does not mean they have not engaged in negotiations regarding promotional rights for potential tours. Moreover, Defendants’ claim of reputational damages sustained as a result of Live Nation’s breach is not dependent on whether or not the Rolling Stones have actual plans for a tour."
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