It's Not Only Rock 'N' Roll

It is 9:30 a.m., prime sleeping time for rock 'n' rollers, but Michael Cohl is wide awake and well into his first pack of cigarettes. The Canadian concert promoter is padding around his Philadelphia hotel suite shoeless--scanning faxes, taking phone calls, and sweating the details of his latest venture: the Rolling Stones' 1994-95 world tour, Voodoo Lounge. Mick Jagger and the other Stones will open the first of two shows at Veteran's Stadium in 12 hours. And in the meantime, Cohl has a business to run: "In our minds, we try to approximate your ordinary go-to-the-office kind of company," he explains.

Only the most callow of rock fans would be surprised to learn that the current Stones tour--like the band itself--is fundamentally a business. The wild excess and seat-of-your-pants planning documented in Gimme Shelter, the 1970 film about the band's notorious Altamont concert, is long gone. If one were to remake that film today, it could well be called Gimme Tax Shelter.

What's surprising about the Voodoo Lounge tour, though, is just how sophisticated an enterprise Cohl and the Stones have assembled. With 250 full-time employees and potential worldwide revenues of $300 million, the tour operates like a decent-size corporation. But because its staff will disband after it ends late next year, Voodoo Lounge is less a corporation than a virtual corporation. Odd as it may seem, the Stones' tour offers a primer for executives eager to translate this hot management buzzword into reality.

Start with the definition of a virtual corporation: a temporary network of companies assembled to exploit a specific opportunity. No hierarchy, no central office, no organization chart. Cohl, who once owned a strip club in Ottawa before his Toronto-based Concert Productions International, seems only vaguely familiar with the term "virtual corporation." But he has created a perfect one.

SATISFACTION. Consider his office. Though he is fronting as much as $140 million to finance Voodoo Lounge, Cohl runs the tour with the sort of simplicity Corporate America can only dream of: He travels with just a crate of files, a laptop computer, and a fax machine, which spits out updates on labor costs, travel schedules, and ticket sales.

Here-today, gone-tomorrow organizations are nothing new in the concert business. But Voodoo Lounge's sheer size and complexity sets it apart. The stage, a futuristic monster with a 924-square-foot Sony video screen and a 92-foot-high cobra-shaped lighting tower, requires 56 trucks to haul from city to city. Because the set takes four days to build, three stages leapfrog each other around the U.S. Overseas, the stage will be ferried in two 747 cargo jets and a Russian military cargo plane.

True to "virtual" form, Cohl lets his partners handle much of the logistics. To supply the stage, lighting, sound, and other elements of the show, the Stones have contracted with RZO Productions, a company owned by their longtime business manager, Joseph F. Rascoff. (Rascoff and Cohl both answer to Prince Rupert Loewenstein, the band's financial adviser in London.) Rascoff, who is a Wharton graduate, employs a team of 200 stagehands, and lighting and sound technicians, plus scores of laborers hired for the individual venues.

Rascoff's team is never in just one place at a time. On Sept. 22, workers were completing the Voodoo Lounge stage at Veteran's Stadium. At the same time, a second crew was putting up the steel skeleton of the stage for the show three days later in Columbia, S.C. And a third crew was prepping the Liberty Bowl in Memphis. With labor costs of up to $300,000 per city, Rascoff uses a network of portable computers and fax machines to track costs: "We have as sophisticated a budget operation as any company," he says.

Voodoo Lounge's fluid organization allows it to shift gears rapidly. Cohl, for example, scheduled only 42 shows before the tour opened on Aug. 1, partly out of concern that the concert season was glutted with big names such as The Eagles and Barbra Streisand. Once the tour was under way, he felt confident enough to add 23 more shows. With 65 shows in the U.S. and Canada, Cohl predicts the tour will gross 25% more than the Stones' 1989 Steel Wheels tour, which earned a then-record $98 million.

MONEY GAMES. Few things in this venture are more important than money. But seven hours before showtime at Veteran's Stadium, Jake Berry, the tour's production manager, confronts one of them. A roadie has stopped him to report that the Philadelphia fire marshal is threatening to shut down the concert if anyone smokes onstage--including legendary smokers, Keith Richards and Ron Wood. "I'm not going to tell Ronnie and Keith they can't smoke," says Berry, as he rushes to strike a compromise. That evening, as usual, Wood inhales contentedly through the opening number, Not Fade Away.

Like everybody on the tour, Berry fervently believes that--despite critics' japes about their advanced age--the Stones are still a good bet to sell out stadiums and make money. As in any virtual corporation, the partners succeed individually by succeeding together. Cohl guarantees the band an estimated $85 million, both to cover their expenses and as base salary. But after the tour breaks even, he and the Stones stand to make even more money.

Perhaps that's why the Stones, particularly Jagger, immerse themselves in the business of Voodoo Lounge. Cohl and Rascoff both consult them on issues such as merchandise and concert dates. The Stones also act as brand managers: "They understand better than anyone what it means to be a Rolling Stone," says Cohl, "and how that name should be used and treated."

When Mick Jagger struts onstage in Philadelphia at 9:45 p.m. that evening, the driving rain and wind of an early season nor'easter barely slow him down. "Welcome to a rather soggy Voodoo Lounge," he says jauntily to 50,000 drenched fans, as raindrops course down his memorable mug. For the CEO of a virtual corporation, this is called keeping your end of the bargain.

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