THE boards of both Live Nation and Ticket master are scheduled to meet tonight to approve their merger, On the Money has learned. A deal could be announced as soon as tomorrow morning.
The timing of the board meetings – right after the Grammys – lowers the volume on the major labels’ celebration and suggests that the industry’s new power center will rest not with the labels but with Live Nation Ticketmaster, as the company is to be called.
Terms of the deal are essentially unchanged from what The Post reported on Tuesday night – a merger of equals with each company holding 50 percent of the new entity. But Ticketmaster investors will receive roughly 18 percent more shares since the concert promoter has a larger shareholder base, a source involved in the deal said.
Though Live Nation and Ticketmaster are supposed to be equal partners, it is only a matter of time before Ticketmaster Chairman Barry Diller and CEO Irving Azoff systematically remove Live Nation CEO Michael Rapino and the rest of his team, sources that have worked with both companies said.
To be sure, as the deal histories of Diller and Azoff illustrate, they never enter into a transaction that requires giving up control – Diller spent three days in a Delaware courtroom last year to win control over IAC from his benefactor John Malone.
Compared to those two, Rapino is a deal neophyte with a track record of jumping into transactions too quickly and without much thought, as underscored by his roundly criticized deals with Shakira, Jay-Z and others.
“Irving’s spent a lot of time being ‘Rapino’s buddy,’ but what he really was doing was getting to know Live Nation’s business so he can take the whole thing over,” said an executive who has negotiated deals with both men.
Or, as another source close to the situation said, “Rapino’s in a pool of sharks and he’s the bait. He’s going to get sucked up and killed by Azoff and Diller.”
Perhaps Rapino sensed this because a second source involved in the deal told On the Money that he insisted as a condition of the merger that Diller be non-executive chairman of the combined company – originally Diller was just going to be chairman.
Rapino and Azoff will essentially be co-CEOs, sources said, though their precise titles will differ. Rapino will be responsible for operating the business, while Azoff will handle artist management and production.
“They’ll work together like oil and water,” said one source familiar with both Rapino and Azoff. “It’ll be a matter of months before one tries to overthrow the other.”
Peter Lauria
Auto plan
A deep-pocketed Kuwaiti investment firm is proposing an intriguing $100 billion-plus financing package for America’s ailing Big 3 automakers, OTM has learned – but there are plenty of strings attached.
For starters, the deal, which the company, Rasameel Structured Finance, said it has submitted to Ford, GM and Chrysler, carries no interest payments as per Islamic law. Instead, Rasameel is proposing the three companies each form a separate joint venture with the investment firm, with Rasameel holding up to a 49 percent stake in the new venture.
In exchange for the financing, according to Artie Pacheco, a former Bear Stearns senior managing director who now represents Rasameel in the US, the Kuwaiti firm would be entitled to up to 49 percent of the profits over the next 10 years.
“That’s the trade-off for them taking the risk and not imposing any interest payments on the auto industry, which would kind of saddle the industry right now,” said Pacheco, who estimated the effective return on the “Rasameel Certificates” could run as high as 25 percent.
Rasameel is making its push at a time when declining auto sales have plunged the indus try into crisis. US auto sales fell 35 per cent last month, and were down 13.2 million in 2008. GM and Chrysler got $17.4 billion in federal loans in De cember. A Ford spokesman said he was aware of the proposal while at GM, a spokeswoman said the company does not com ment on financing talks, if there are any, when they are in the “conceptual stage.” Chrysler did not re turn a call for comment.
But Rasameel’s Pacheco is undeterred. “Consumers may not be buying cars right now but that will change eventually. We’re talking about a 10-year com mitment. I can’t imagine a down cycle that will last 10 years.” John Aidan Byrne
The folks at Goldman Sachs became quite agitated last month when we re ported that their Conviction Buy list of six months ago lagged even the S&P 500 Index over the same period by 3.20 percentage points. The wizards of Wall Street, we wrote, seemed to be losing their touch.
Goldman says
The list, they said, “is not a port folio frozen in time,” but rather updated often – with some stocks removed from the list and others added. The Post didn’t take that into account, they said. So Goldman Sachs went through the lists and de termined that their best stock picks didn’t lag behind the S&P 500 but, rather, outdid the much- watched index. By 2.32 percentage points.
business@nypost.com
