Madison Square Garden Starts Artist Venture With AzoffAndy Fixmer
Madison Square Garden Co. will set up an artist-management venture with former Live Nation Entertainment Inc. Chairman Irving Azoff, agreeing to pay $125 million for half of the new company.
Azoff, 65, will contribute his company and be chairman and chief executive officer of Azoff MSG Entertainment LLC. Madison Square Garden, the New York-based owner of concert venues and the New York Knicks, is also providing a $50 million credit line, the company said in a statement yesterday.
MSG is partnering with Azoff to develop new ways for artists to make money as the music business derives the majority of its revenue from digital outlets like Apple Inc.’s iTunes and Spotify Ltd. streaming. In addition to managing artists including the Eagles and Van Halen, the venture will license music rights, televise events and produce online publications and Web TV shows.
“This is essentially a venture capital firm in as much as it will be investing in startups as well as purchasing already established entities,” James Dolan, executive chairman of MSG, said in an interview. “It is a high-growth vehicle, the kind of growth a public company of our size couldn’t achieve under our current configuration.”
MSG fell 0.4 percent to $58.01 in New York yesterday. The stock has gained 31 percent this year.
The venture will have four units: Azoff Music Management, Global Music Rights, Television Production and Live Event Branding and Digital Brand Architects, according to the statement.
The music-rights business will own a 90 percent interest in a music publishing operation run by CEO Randy Grimmett that will acquire, develop and license music for commercial purposes.
Lawrence Randall, former head of programming and entertainment for the National Football League, will oversee the TV business, which will buy, develop and produce live and televised events.
Azoff MSG Entertainment will hold a 50 percent stake in Digital Brand Architects and the unit will be overseen by Allison Statter, the company said. The business includes more than 70 bloggers and will consult brands on opportunities in social media.
The new venture will also partner with Brian Schuster, ACTV8 and United Talent Agency on a interactive live-music competition show being developed for the Web.
“We want to help artists find appropriate ways in these times to exploit intellectual properties,” Azoff said in an interview. “It’s far more than a management company.”
Azoff will also advise MSG on managing live-event venues, including the Forum in Inglewood, California, according to the statement. The Forum, acquired by MSG in June, will open in January with a performance by the Eagles.
Investing in Azoff’s previous businesses has been profitable for MSG, Dolan said in the statement. MSG was an investor in Front Line Management Group, which Azoff co-founded in 2004.
Azoff sold the majority of the artist-management business to Ticketmaster in 2008 for $123 million. Live Nation, which bought Ticketmaster in 2010, bought the 25 percent of Front Line it didn’t already own for $116.2 million in 2011 and Azoff became chairman of the concert promoter.
“We are looking forward to exceptional growth,” Dolan said. “We have a partner and an executive who will run this who is finally in his career being set loose to pursue all the great ideas that he has.”
Live Nation said in December when Azoff departed the company, that a non-competition agreement allows him to manage certain artists. Azoff’s clients include Christina Aguilera, Fleetwood Mac’s Lindsey Buckingham and Steely Dan, according to the statement. At the time of his Live Nation departure, Azoff said he wanted to build a new management company representing clients in music, sports, fashion and other areas.
MSG is finishing a $1.05 billion overhaul of its namesake arena in New York that will make shooting video and showing events online an integral part of the venue, Azoff said.
“We are really looking beyond getting more shows in a building,” Azoff said. “We are looking at the next generation of how artists will connect with fans.”