Live Nation’s Safety Net

Alan Ridgeway is back – after Live Nation U.K. Music managing director Stuart Galbraith was fired for allegedly negotiating a position at AEG.

Ridgeway’s promotion to chief exec of international music and his return to the U.K. appears to be a step toward creating Live Nation CEO Michael Rapino’s vision of the ideal live music company.

Rapino sees a "global live music network that provides touring artists the opportunity to maximize their revenues and expand fan reach all under one aligned platform" – a concept he told investors when announcing the 2Q earnings call.

The stock price could be better, having tumbled about 20 percent in six months, but most stock has tumbled – on both sides of the pond. On the other hand, LN shares have steadied and original investors, who got in when the company spun off from Clear Channel Communications, have just about doubled their money in 18 months.

In quantifiable financial terms, such announcements as Ridgeway’s promotion rarely register on a stock graph, but still serve as some sort of morsel to Wall Street in terms of reminding investors of the company’s profile and intentions.

Ridgeway is Rapino’s safe pair of hands – the man he had in place to oversee Live Nation’s transition to a stand-alone, stock-listed company.

Ridgeway handled the combined Clear Channel-MCD purchase of Mean Fiddler Music Group, overseeing due diligence on the sprawling empire Vince Power had built from a club venue on the wrong side of the tracks to a public company worth nearly £40 million.

Some parts of Mean Fiddler were in bad shape. At one point the company included a country radio station and a contract to run 21 clubs and pubs. Maybe Rapino reckoned that anyone who could unravel such a hodgepodge could handle a major spinoff and stock launch.

Since then there’s been further rationalization of the old Mean Fiddler, now trading as LN-Gaiety, including the sale of The Forum – one of the conditions the Competition Commission imposed on the purchase of half of Academy Music Group.

Live Nation U.K. and LN-Gaiety president Paul Latham has overseen the sale of a handful of small clubs owned by Mean Fiddler, including the original Mean Fiddler, The Garage, The Borderline and The Jazz Café.

What’s left is what Rapino and MCD chief Denis Desmond most wanted in the first place – the festival business. It includes the Leeds-Reading Carling Weekend, Melvin Benn’s new and highly popular Latitude and a recent agreement for a continued share of Glastonbury in return for overseeing its license and working on the related infrastructure.

Desmond knows what good businesses well-run festivals can be, given his share in the V Festivals, Scotland’s T In The Park and the Oxegen Festival he stages on Ireland’s horseracing track at Punchestown.

And it seems that Rapino, as he first arrived in Europe, must have walked onto one of the then-Clear Channel festival sites – maybe Belgium’s Rock Werchter or Hollands Lowlands – and figured he should bring some of that home.

A couple of weeks ago Live Nation bought a majority stake in Bamboozle, the 4-year-old New Jersey event that pulled 85,000 fans to Giants Stadium in East Rutherford, reportedly grossing $2.6 million in the process. The bill included Linkin Park, My Chemical Romance and Lordi.

At least some of the £6 million (about US$12 million) LN-Gaiety reportedly had when it sold the Mean Fiddler’s smaller clubs to MAMA Group, which already bought The Forum and Hammersmith Apollo, is expected to go to the development of the festival business – now re-branded as Festival Republic. Melvin Benn, who’s heading that division, has more than hinted that he’s looking to expand it into the U.S.

The American market has never embraced festival culture on the level of Europe and beyond, but the rapid growth of Bamboozle and the development of such events as Coachella, Lollapalooza and Bonnaroo suggest the time may be near.

"A significant part of our growth in Europe over the last few years has been from festivals," Ridgeway told Pollstar, outlining how that strategy is likely to be continued.

"It’s particularly pleasing to see that Mean Fiddler has continued to grow since our acquisition with Denis in 2005. Melvin Benn has done a fantastic job continuing to build Reading and Leeds, as well as starting Latitude last year."

As for his new role in Europe and throughout the world, "Michael is the one who really kick-started the European business after the initial SFX and Clear Channel acquisitions, through a combination of building our U.K. business and expanding in to new markets.

"I plan on ensuring that our European businesses continue to flourish and expanding our European success into other international markets."

Ridgeway said he had no idea of how long he was going to be in the U.S. when he left the U.K. in the late summer of 2005. It was within months of the Clear Channel-founding Mays family spilling the beans of its intention to spin off the entertainment division and the subsequent resignation of company chief Brian Becker.

Now that with the company has been successfully spun off and the restructuring well under way, Ridgeway is rewarded by returning his family to leafy Surrey – a suggestion he laughs off.

He said the timing of his return had more to do with Carl Pernow, who’d been running the international business since the spin-off and had expressed a desire to return to Sweden to re-join EMA Telstar and get back to heading up the running of the Nordic countries. EMA chief Thomas Johansson is chairman of Live Nation’s international business.

Ridegway said he enjoyed his time in Los Angeles, particularly working on the acquisitions of House of Blues and a controlling interest in Michael Cohl’s CPI.

As for future worldwide acquisitions and expansions, Ridgeway concedes there are few places left in Europe – particularly since Pernow tied up the deals for Gay Mercader’s Gamerco in Spain and France’s Jackie Lombard Productions.

But, like Rapino, Ridgeway’s also keen for the company to establish a bigger presence in Germany.

At the moment, Live Nation has 20 percent of Marek Lieberberg Konzertagentur, which it bought from the promoter himself in December 2003, but CTS Eventim still owns about half of the Frankfurt-based company.

It’s not much of a footing in an important market for a company that operates in 16 countries outside of North America. Given the current positions of the major German promoters (and the major Swiss and Austrian promoters) either co-owned by stock-listed or private companies, it’s difficult to see how Ridgeway can target any of the so-called GAS territories.

As for the rest of the viable European markets, Live Nation already has the major player in most of them.

More immediate expansion is likely to come in Australia and Japan, territories Ridgeway may well find more accessible acquisition targets. They would also be handy places to reinforce Rapino’s message to investors by demonstrating that Live Nation is a truly "global live music network."

As for the problems in the U.K., which were unfolding as Ridgeway arrived, it will likely go down as a "local issue" in much the same way as Rapino treated Willem Venema’s sacking from Holland’s Mojo Concerts.

AEG is staying quiet about Galbraith, whom the U.K.’s Times reported "is also believed to have sounded out Live Nation colleagues to join him there." The London live music business fully expects him to be working for the Los Angeles-based company when he’s done whatever leave his current LN contract imposes upon him.

A future battle between the world’s two largest live music companies may be fought in London’s Hyde Park, where Galbraith has promoted Live Nation’s summer seasons and overseen such events as Live 8.

It could well be fought when LN’s exclusive contract with The Royal Parks expires, given that Galbraith and AEG decided to compete for the next one.

Although some of the company’s execs who’ve worked with Galbraith for years may be disappointed by what they see as a lack of loyalty, there’s an expression promoter John Giddings once said: "If you want loyalty, buy a dog."