Giddings Re-Nationalized?

Despite speculation that John Giddings could be selling his U.K.-based Solo Agency to Universal Music Group or a private equity house, it is more likely he’ll return to the Live Nation fold come 2008, about two years after he left the company.

Giddings was on vacation at press time and could not be reached for comment. Neither was it possible to reach newly promoted Live Nation international music chief exec Alan Ridgeway.

Giddings previously told Pollstar his Live Nation deal expired January 16, 2006, which would mean the most likely time for him to make his move would be between mid-January and early April 2008. Under current U.K. tax laws, he would have to pay 20 percent on his capital gain if he sells within two years, with the rate dropping to 10 percent if he sells after that time.

However, U.K. Chancellor of the Exchequer Alistair Darling’s Pre-Budget Report published October 10th suggests the government intends to increase that lower rate from 10 percent to 18 percent at the beginning of the new tax year.

So, Giddings would get the optimum tax break if he sold in the window between January 16th and April 6th.

The first £100,000 of his gain could be tax exempt, but he’d only qualify for that allowance if he retired.

Even when he left the Live Nation nest to fly Solo again, it was obvious he would continue to have close links with the company through his role in the European tour plans of such acts as The Rolling Stones, U2 and Madonna.

"You can’t put a price on loyalty. I’ve worked with Michael Cohl, Arthur Fogel and Michael Rapino for years and we’re good friends," Giddings said at the time. "Now we have what you could describe as a ‘strategic relationship going forward’ and I expect I’ll be working with them for the rest of my business life."

Since then, he’s worked in cahoots with Live Nation for a roster of acts that includes Barbra Streisand and The Police.

Selling to any other interested party would likely put him in a position where he’d be expected to be a fierce competitor to LN, which is unlikely given Giddings’ business relationships with the Live Nation brain trust.

Giddings told Pollstar a month ago that he definitely wouldn’t be selling to AEG. He also cast doubt on UMG’s chances.

"The record companies weren’t interested when I was booking bands from a Fulham bedsit and they were selling lots of records and swanning around in their ivory towers in New York," he said. "Why should I be interested in them now?"

His relationship with Cohl goes back more than a couple of decades. In 1990, Giddings sold 50 percent of Solo to International Talent Group, which had Cohl as an investor, and the working relationship between the two continued when they became partners alongside longtime associate Bill Ballard and the Labatt brewery in Ballard, Cohl, Labatt (BCL).

BCL was a traditional concert promoting company concentrating almost exclusively on the Canadian market, but it decided to give that up in favor of promoting entire tours. The directors built the company up before selling out to House of Blues.

Fogel’s The Next Adventure (TNA) was formed to produce those tours. It was at this stage that Giddings restructured his company with TNA.

TNA later sold out to SFX in a deal that meant that any stock that TNA held in Solo would also move to SFX. It began a relationship that tied Giddings with the company while it was bought by Clear Channel Communications, then finally spun off as Live Nation.

"I’m only interested in doing business with someone who will enhance my business, not somebody who just wants to buy a slice of the pie" is the only clue Giddings has given.

He may well find Rapino’s new Artist Nation, a global division of Live Nation under the stewardship of Cohl, a better fit than continuing with Solo with a big wedge of corporate money stashed in the hold.

Cohl sold his remaining 50 percent stake in CPI to Live Nation for US$17 million in common stock in September, bringing him totally within the Rapino fold.

Fogel’s position as global music chairman looks to be cemented by LN’s new deal with Madonna, brought to the company via his running of her worldwide touring.

The more Rapino re-shapes the Live Nation hierarchy, the more Giddings begins to look like the missing piece in the jigsaw puzzle.