Ticket Masters, page 31
“First I had to get inside,” says Cohl. “I go, ‘Chuck, what’s wrong with your deal? Everybody says you’re losing money. You’re telling me you’re not, but you are. I’ve got to find out why.’ I found out — he trusted me to tell me the deal.”
According to reports, the initial agreement was as follows: the Jacksons would receive 84.44 percent of the concert proceeds, and Sullivan would get 16.56 percent; money owed to the Jacksons was due twenty-four hours after each concert; and, the most precarious aspect, there was a provision that required Sullivan to pay the Jacksons $21 for every ticket, whether it was sold or unsold. (As collateral for a $12.5 million loan to make the down payment on the contract, Sullivan had put up the Patriots, Sullivan Stadium and a family-owned racetrack.)
A critical problem was that, in doing ticket projections for the concert bid, Sullivan based the counts on full use of a stadium’s concert capacity. It turned out that the eight-story, 365-ton stage that was built in secret took up approximately a third of a stadium’s field. So, for instance, at the tour opener at Arrowhead Stadium in Kansas City, there were only 45,000 tickets available versus the expected 60,000.
“I said, ‘Look, I can fix it. I know how to make this tour make money. You’ve made certain mistakes,” recounts Cohl. “You know how to run a football team, but . . .” Sullivan wouldn’t listen to him.
Cohl looked at the schedule, saw an open weekend and offered Sullivan a deal he knew the struggling promoter couldn’t refuse: “Come play three nights at a stadium in Toronto. Because I know your deal, here’s what I’ll do — I will stand in your shoes and guarantee what it is I know you owe Michael for those three nights, and I’ll give you a guaranteed $100,000.” After Sullivan agreed, Cohl gave him a proverbial wink before exiting and said, “Then, after the shows, you’re going to hire me to run the tour for you.”
Walking into settlement after the three sold-out Toronto shows, Cohl proudly paid Sullivan his $100,000. “Congratulations, Chuck. You did really well for a one third partner.” Cohl remembers underscoring Sullivan’s complicit understanding of what he meant. “From then until breakfast the lawyers negotiated, and by breakfast he hired me to run the tour for him.”
Over the next twenty shows Cohl shifted the monetary scale more favorably in the beleaguered promoter’s direction. The revenue share was adjusted to approximately seventy-two percent for the Jacksons, twenty-eight percent for Sullivan; the per-ticket guarantee and the twenty-four hour payment requirement were also cut. “I thought of five or six ways to help him make money,” says Cohl, “but not the ticket because he’d given it all away.” Those ways included a better merch deal, travel packages, ticket rebate deals, hotel deals and limited sponsorships.
“I saw all those P&Ls and I saw what could happen because nobody thought you could do giant, stadium-only tours,” says Cohl of the experience. “Number one, the Victory tour was an invaluable lesson, to be able to walk home and go, ‘Wow, I didn’t think anybody could make that much in three shows, never mind one show,’ and just filed it.”
While CSNY had done a stadium-only tour with Graham a decade earlier, it was twenty dates shorter. Moreover, both the Victory tour and CSNY were strictly domestic — none had attempted to go international. The numbers and contracts Cohl had been privy to were at that point for the biggest tour ever. It didn’t get any bigger, and Cohl had not only managed to get access to the numbers but in fact was allowed to come in and adjust them. It was a career-changing coup.
“Number two,” continues Cohl, “for the first time I’d met all these names that I’d been reading about in Amusement Business and Billboard all my life, whether it was Larry Magid or Jack Boyle, all of them. The only one I really knew was Bill Graham because he’d been coming to Toronto. I came home and I said to my staff, ‘We do it at least as well, if not better, than all of these people we read and hear about, see pictures of, and they get trophies and awards. All the acts say we look after them as well or better than anyone and we’re doing a great job. I now know it’s true.”
The Victory tour is where the college dropout finally received his diploma. “It was like going to school and getting my Ph.D. and being paid for it,” says Cohl. “And it was on Chuck’s tab.”
In the years to come Cohl’s visions of the future lay well beyond Canada and the United States.2 He would periodically pull the Victory tour file out of his desk drawer and, as he says, “doodle numbers.” “This was really powerful information,” Cohl would tell himself. “I should go after the Rolling Stones. I should go after Pink Floyd. I should do something with this information.” He would stare at the file and his hypothetical doodles and think, “I will, one day.”
THE SECOND AMNESTY INTERNATIONAL TOUR, Human Rights Now!, a multi-artist benefit show featuring Bruce Springsteen, Sting, Peter Gabriel and others, came to Toronto’s Maple Leaf Gardens on September 15, 1988.
Bill Graham was the tour’s promoter. As show preparations were being made, Graham, known for his explosive personality, was tearing into Cohl’s employees as he would any production staff. “A couple of my people called and quit,” recounts Cohl, who was up in his office at the time. “‘We’re going home. This guy just told me I’m a piece of shit.’” He persuaded them to stay and told them he was en route to deal with the situation.
He immediately found Graham backstage: “‘Bill, stop. For the rest of the day talk to me. You cannot talk to my people — that’s literally it.’ Whatever you need, let’s work it out.”
He then gathered his staff and made another declaration: “I promise you we’ll never have to work with Bill Graham again. This is it.”
After the necessary soundchecks were completed and all seemed in order, Cohl found Graham, who was taking a break. “By the way, we’re never going to work together again — ever, ever,” he told the veteran promoter. “We don’t need you coming in and abusing everybody, so thank you, this is it.”
Cohl walked over to the hot stove lounge and sat down for some steak and mushrooms with his longtime partner, Lori McGoran. After a few bites he started to feel ill, thinking that it was perhaps the food. He opened his belt and unzipped his fly halfway to try and relieve the increasing pain. No luck. Minutes later he turned to McGoran: “Take me to the hospital. Something is terribly wrong.”
The doctor quickly diagnosed the problem: kidney stones. He passed them quickly. “The next morning I’m calling the doctor to see if stress can cause kidney stones,” retells Cohl. “It’s Graham’s fault I have kidney stones. He caused me to have such a stressful day. It wasn’t the mushrooms. I’m driving to the office going, ‘That’s it.’” When Cohl arrived at work, his staff of sixteen greeted him.
“Boss, we need to talk to you.”
“I know exactly what you’re going to say,” Cohl said, cutting them short. “I gave you my word and I’m keeping it. We’re never working with Bill Graham again.”
“No, we’re going to give you your word back on this one. It’s okay.”
“Why?” Cohl asked incredulously.
“Because you realize that if we don’t ever work with Bill Graham again, we’ll never get to work with the Rolling Stones again, and that’s clearly a highlight of why we’re all in the business.”
“Just go back and start working again,” said Cohl, waving them off. “I promise you we’re never going to work with him again, and don’t bet that we’re not going to work with the Rolling Stones.”
When all the employees had left the room and closed the door, Cohl opened his desk drawer and pulled out the Victory tour folder.
The day had come.
THERE ARE FEW THINGS THAT veterans of the live music business agree on. If common parlance suggests there are two sides to every story, the concert business typically has four or five perspectives for any given tale. There are two moments that the industry collectively agrees were a watershed: SFX’s promoter rollup in the late 1990s and Michael Cohl winning the Rolling Stones’ 1989 Steel Wheels tour.
Everything in Cohl’s career had led up to this point: the constant questioning of the business’s fundamentals, the cross-collateralized touring of Canada, the strategic partnerships with Canadian and American promoters, the development of the Brockum merchandising arm, finding a deep-pocketed parent company and, finally, the insight from the Victory tour deals.
“I saw hall deals that I didn’t think were possible,” Cohl says of the Victory tour’s contracts. “Getting halls for free, halls for $50,000 when everyone thought they were $150,000, expenses that halls were paying that promoters normally paid.”
Cohl had been sitting on the information for four years. “It was more that I was afraid of not getting it than I was of anything because no one likes to fail,” he confides. He had often asked himself, as he mocked up hypothetical schemes based on the Victory tour, who would be the best act to help give this new platform life? And the answer, for him, was always easy: the Rolling Stones — arguably the most popular band in the world. It was his answer to Weintraub’s Elvis. He just had to be patient.
At the time the Stones hadn’t toured since 1982 with Tattoo You. Cohl went to Peter Bronfman, the owner of Labatt’s, to ask for his financial support.3
“I’m going to do this, but I need your backing,” Cohl told Bronfman. “This is big money — I don’t have this kind of money. This is going to be tens of millions of dollars. Will you back me?”
“Yes.”
“Good. I’m going to go get the Rolling Stones. We’re going to put them back together and we’re going to do the tour.”
Given Bronfman’s wide network of connections in the entertainment world, particularly with its majority stake acquisition of CPI the year before, he asked around to gauge what others thought of the plan. According to Cohl, everybody told Bronfman that there was no chance on earth he was ever going to get the Rolling Stones and no chance that Bill Graham was not going to have them, and that they were all wasting their time. Bronfman, feeling a bit embarrassed with what he perceived to be his sudden lack of business acumen, called Cohl for a meeting.
“Everybody thinks you’re nuts,” said Bronfman.
“Who’s everybody?” asked Cohl. “What do you guys know? You know about beer.”
“We talked to all your partners, and they think you’re nuts, too.”
Cohl persuaded Bronfman to trust him and to believe that all the people Bronfman had talked to had an almost xenophobic image of themselves — that CPI and the Canadian concert business was always going to be “the other guy” in the view of American promoters.
With Bronfman’s support secured, Cohl phoned a mutual friend of the Stones’ financial adviser, Prince Rupert Loewenstein, to get introduced. He told them that he was going to pitch a new kind of business model for large scale touring.
Ten minutes later the phone rang.
“Excuse me, young man,” said the Prince in a formal British accent. “I understand you have something to say to me.”
“$40 million for forty shows,” Cohl initially offered for a Stones tour.
“Very interesting,” replied the Prince succinctly.
As luck would have it, in January, shortly after Cohl received Loewenstein’s call, the Stones entered the studio to record Steel Wheels, the beginning of their commercial comeback. As always, it was the tour that made the band its real money, not the album sales.
Graham had successfully helped produce the last several Stones tours — 1972, 1975, 1978 and 1981. So when he received a call in early 1989 from one of the band’s business managers, Joe Rascoff, the tone of the conversation was disarming. “‘They’re going to go on tour,’” Graham recalled Rascoff saying. “‘Bill, the situation is that there’s another organization bidding to do it. . . . You should consider whether or not you want to make a bid to buy the tour. Because we already have an offer.’”
“I didn’t really know what he was talking about,” Graham later reflected. “I have never bought a tour.” He asked what exactly he meant.
“‘You have ten days to get a bid together,’” Rascoff responded. “We’ll have a sponsor. I don’t think you’ll be able to beat these numbers, and I’m not telling you what they are. If you buy the tour, you’ll need to guarantee ticket sales and merchandise and so on.’”
“During my first conversations with Joe, I began to get an inkling that something was wrong here,” said Graham. “He kept saying, ‘We didn’t approach these people. They came out of nowhere, Bill.’ I said, ‘Joe, but you accepted. When they came to you, why didn’t you say, ‘You want to bid on our tour? This is our team. The Rolling Stones, Rupert, Rascoff and Bill Graham.”
Over the course of several meetings with the band, Rascoff and Loewenstein, Graham felt like he was treading water as time and again he was told, “The numbers are just too big,” “The numbers are so incredible” and “You can’t possibly match the numbers.” The “number,” as Graham would eventually find out, was an approximately $65 million guarantee for fifty dates. Word had reached him that it was Cohl and CPI leading the bid.
Prior to calling the Stones with his offer, Cohl had gone through various scenarios of how Graham would react to the bid — knowing that Graham was the incumbent promoter — which, based on the Victory tour model, had the band only playing stadiums. After running through them in his head, Cohl was struck with an epiphany: Graham was in a no-win situation.
“I’m going to walk in and I’m going to bid an amount of money that people think I’m nuts,” he says of the first scenario. “Graham’s going to absolutely never come close because he’s going to think I’m out of my tree.” The alternative, Cohl realized, was just as bad for Graham: “He’s just not going to share [this type of model and its profits] with people anyway because he’s known this all along and he’s never had to share it.”
Meaning that if he shared it now, the Stones and other acts would know he’d made more money off previous stadium shows than they’d realized.
Compounding the problem for Graham was his belief that, “If [CPI] owned the tour and cut all the local guys into their deal, each promoter would make less than in the past because the pie was being cut another time.”
While Graham had taken the Stones out on their previous, mostly stadium run in 1981–82, his role was as tour director, not tour promoter. He still utilized local promoters in their respective cities, often giving them the standard ten or fifteen percent of profit after expenses.
After a long conversation with Mick Jagger about the Steel Wheels tour deal, Graham felt confident that he’d be able to win the bid back or at least involve himself to a large degree in the tour. The singer had agreed to let him get the numbers from Rascoff. Yet no sooner had the spring returned to his step than Rascoff was telling him that the deal with CPI was done. Graham’s right hand at BGP, Gregg Perloff, was getting calls about CPI calling stadiums for availabilities.
Furious, frustrated and confused, Graham called Rascoff. “You tell me the money is too big but it’s not really done yet, and yet they’re already calling stadiums. This is an example where by not having me involved, you and I already disagree in how this should be done. Call the promoters, not the stadiums, to get the local avails. Let them do their jobs. Let them keep their part.”
Rascoff’s response said it all: “Bill, you see, here’s the first example already of the problems we’re going to have.”
Graham’s loss to CPI stunned the industry. “When we got the contract, I don’t think anybody could believe it,” says Cohl. “They just went, ‘Who is this guy?’”
THE BUSINESS MODEL FOR NATIONAL — and international — touring that Michael Cohl created had two key differences from those developed by previous promoters. The first was that, like his earlier Canadian shows, the entire tour was cross-collateralized. It wasn’t viewed as fifty separate business deals but rather one massive one. To that end it was predicated on local promoters getting flat fees after costs and expenses — just as Concerts West had arranged in the 1970s. Cohl contends it was never positioned as a take it or leave it type offer, despite relaying how a typical conversation with a local promoter would begin: “We’d like you involved. We’d love to have you be a part of it. We don’t want to offend you and make you not part of it in your own market. But there’s a certain value for services, and we have our business to conduct.” If a local promoter opted out — as some did — Cohl struck a deal directly with the venue.
The second key difference was that CPI’s rights as a promoter were expanded to include as much as possible. “You might be losing money as a promoter, but there’s this other merchandiser who’s come in and is making money,” Cohl remembers. “It didn’t seem right. Then you would see different promotions — the record company over there trying to do this, as if the show didn’t mean anything; the merchandiser would be off with some local store; and it seemed very disjointed. What we decided, very simply put, was there had to be a way to get a bigger bang for your buck, a more effective way of pooling all this.”
If they could package it all, control all the various elements and enable them to cross-promote and feed off each other, the returns could be much greater. “Most important,” says Cohl, “is you’re going to get inside people’s heads and you’re going to make it a bigger thing, a bigger event, a bigger stature for the bands.” As he’d put it to prospective clients, he wanted to give them a reason to work more and therefore make more money.
He also created new revenue streams for the band such as travel packages for fans, TV deals and VIP seating.
Local promoters from around the country were up in arms. “I’ve never seen greed at this level — ever,” said longtime New England promoter Don Law. “It’s insulting. The Who cut a tight deal that everybody complained about but they didn’t insult people like this.” The revenue share, according to Law, equated to ninety-nine percent for the band, one percent for the promoter. “You can’t pay people’s salaries on that. We’re enormously disappointed. We’ve done the Stones every time in Boston since 1972, but we’re out of it completely on this one. We’re not going to do it just for the prestige.”
