EXCLUSIVE: Live Nation Sues Ex-Chairman Michael Cohl for $5.35 Million
Live Nation is claiming in a $5.35 million lawsuit filed Thursday that its former chairman, Michael Cohl, has violated the terms of an agreement made at the time he left the company.
Cohl is one of the most influential promoters in concert history, credited with inventing the modern rock tour through his relationships with such mega-selling superstars as U2 and the Rolling Stones. In 2008, Cohl left Live Nation amid a feud about the direction of the company.
According to the Wall Street Journal at the time, Cohl was strongly in favor of signing musicians to so-called "360 deals," which gave Live Nation a cut of virtually all of the artists' revenues in return for big up-front payments. Before Cohl left the company, Live Nation completed such deals with Madonna and Jay-Z, handing over $120 million to the former and $150 million to the latter, in return for profit participation on things like record sales and image licensing. However, the plan was opposed by CEO Michael Rapino, who wanted to slow the pace of such deals.
When Cohl left the company, questions swirled about the terms of the financial settlement and whether he would be barred from competing with Live Nation.
Thanks to Live Nation's new lawsuit, part of the exit agreement has now become public.
According to a purchase agreement that's been submitted as evidence in Live Nation's new lawsuit against Cohl, he agreed to pay $9.85 million in installments to Live Nation in return for various assets. Among the most interesting among them was a non-compete exemption to continue working with and promoting tours by the Rolling Stones, Pink Floyd and Barbara Streisand.
Cohl was also permitted to work on certain types of Broadway shows, which help explains why he launched himself into the theater world with the $60 million musical, Spider-Man: Turn off the Dark, the most expensive show in Broadway history and one that has been delayed due to investigations over its safety procedure.
Now, the delay of the new Spider-Man production is just part of Cohl's troubles.
According to Live Nation's lawsuit, filed Thursday in Florida District Court, Cohl has allegedly failed to pay $5.35 million as per the terms of its September 2008 agreement. Live Nation seeks to recover the money with interest.
Cohl couldn't be reached for comment.