Live Nation CEO Deeply Skeptical Of Marc Geiger’s $75M SaveLive Venues Plan
Live Nation CEO Michael Rapino threw cold water on SaveLive, former WMR executive Marc Geiger’s plan to roll up independent concert venues facing long-term shutdowns due to coronavirus.
The plan, which Geiger shared last week, would see him and partner John Fogelman making strategic investments in independent music venues around the country, taking 51% ownership stake and creating an independent regional venue network when the concert business returns post-pandemic.
In an interview with the New York Times, Geiger said he has amassed a war chest of more than $75 million to back the plan.
During the question and answer segment of Live Nation’s Q3 investors call last week, Brandon Ross, an analyst with LightShed Partners asked Rapino about Geiger’s plan.
Rapino’s Response
“Probably the same one he had in William Morris.
But I think that there’s a lot of talk on the independent venues, Save Our Stages, etc. And there’s no doubt, everyone in live — service providers and companies — are having a rough year. We’ve been very focused on making sure that the 12 million employees in Live, from the hairdresser to the lighting crew to the security guards, get some stimulus and help. We think those people are in the most need. So we’ve been very vocal about that.”
“When it gets to the venues, in general, the thesis out there with Marc Geiger and some others, is that these independent venues are so distressed that they’re going to throw someone the keys at a very cheap price, and you can maybe roll up some of these cheaply and have some scale. Well, the thesis is basically broken at the first point is, any great live club is not throwing anybody the keys cheaply. There’s a lot of capital out there. So if you own the Troubadour in Los Angeles, it’s a legendary business and you’re having a tough year, you’re not selling to Marc Geiger or anyone else at one or two times multiple.”
“Your access to capital, PPE loans, lots of ways you can keep your business afloat while you get through the storm. So we don’t think that there’s a huge opportunity that there’s a fire sale happening at that level. Now number two is, we’re the — we have a consolidation of clubs in our business. Clubs on their own are a tough business if you scale them up on their own. They’re not a really, really fruitful business on their own. So we like them as part of our overall ecosystem.”
“But we don’t believe that clubs, whether you own 10, whether you own 20 of them on their own, provide you much global synergy or U.S. synergy to leverage off of. So we hope all these clubs find their way through this pandemic, like we hope all live service providers find their way through this and that the government and stimulus program is going to help them survive it. But we don’t think that, that there’s probably many that are going through fire sale to anybody because there’s too many great options for them.”
