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SM Entertainment shareholders have until the end of the month to weigh two competing visions for the South Korean music company’s future before its annual general meeting on March 31 — one from SM and Korean tech company Kakao and another from K-pop rival HYBE.
Despite SM Entertainment’s announcement Monday that it had canceled plans due to a court injunction to issue new shares and give Kakao a 9.05% stake in the company, making it the leading shareholder, SM and Kakao are pushing forward with their strategy to maintain control. On Tuesday (March 7), Kakao launched a tender offer to buy a 35% stake from SM’s minority shareholders by March 26 and, if successful, could soon own nearly 40% of SM and hold significant voting power.
SM — home to such K-pop acts as NCT 127 and Aespa — has nominated a slate of independent directors and laid out a plan for adding 260 billion won ($200 million) of revenue by 2025 by setting up operations in the U.S., Japan and Southeast Asia, and making acquisitions — including a publishing company — in the coming years, according to a company presentation to shareholders. If the roadmap is successful, SM believes it can double its annual sales from an estimated 770 billion won ($690 billion) in 2023 to 1.5 trillion won ($1.14 billion) in 2025.
Much of SM’s road map stems from its battle with founder Lee Soo-man. In late 2022, an activist investor, Align Partners Capital, convinced SM’s board to appoint a new auditor and terminate a contract with Lee’s production company, Like Planning. Now, SM is attempting to remake itself under revamped corporate governance and a more decentralized organization than Lee’s hierarchical control of artist development.
The current inside directors — including Lee’s nephew, Lee Sung-soo — will resign their positions “in order to take responsibility for the problems of the [Lee Soo-man] system,” the company stated. In their place, SM is recommending its own slate of three executives: CFO Jang Chul-Hyuk; Kim Ji-Won, head of marketing center; and Choi Jung-Min, head of global business center.
To ensure an independent board of directors, SM has proposed the chairperson be one of its outside directors, not one of its own executives. Among the company’s picks for outside directors are Kim Kyu-Shik, president of the Korean Governance Forum; Moon Jungbien, a professor at Korea University that specializes in environmental, social and corporate governance matters; and Sung M. Cho, CEO of music analytics company Chartmetric. For part-time directors, SM recommends Lee Changhwan, the CEO of Align Partners, and Jang Yoon-Joong, Kakao’s global strategy officer.
Lee Chang-hwan
Courtesy of Align Partners
HYBE, home to the wildly popular boy band BTS, has different ambitions for SM’s future. HYBE acquired a 14.8% stake in SM from Lee, the SM founder, on Feb. 22, and an additional 1% through a tender offer, according to a March 6 regulatory filing. It has blasted “the bias and irrationality” of the SM management that approved the Kakao partnership.
“HYBE has been considering the acquisition of SM for a long time and gave much thought into how the two companies could work together,” Jung Jinsoo, HYBE’s chief legal officer, wrote in a letter to SM shareholders on Thursday.
In the letter, Jung argues HYBE solved two problems when it acquired Lee’s equity. First, HYBE acquired Lee’s shares in two SM subsidiaries: SM Brand Marketing and Dream Maker Entertainment Limited. That solves what Jung called “leakage in SM’s profits” to Lee. Second, HYBE alleges SM still owes Lee fees for three years even though it terminated the Like Planning contract as of Dec. 31.
Jung says HYBE structured the stock purchase agreement so payments to Lee stop “upon the execution of the agreement.” HYBE also added a clause to terminate any transactions from SM to Lee that HYBE did not know about.
While SM sees Kakao as the partner for its transformation into a larger, more global entity, HYBE calls it an “unfair partnership” that would give Kakao permanent and exclusive rights to distribute SM’s music, protect SM’s equity at the expense of other shareholders and create conflict of interests that favor Kakao’s interests. “We believe that these details demonstrate the bias and irrationality of the current SM management who approved such arrangements,” Jung writes.
Beyond SM’s relationship with Kakao, HYBE is concerned with SM’s roadmap to increase the number of artists on its roster by expanding production in Korea and building overseas outposts. Jung is questioning SM leadership’s understanding of the time and resources required to develop and break successful artists.
“It goes without saying but you cannot generate profit in K-pop just by having a longer artist roster,” Jung writes. “What’s important is to nurture artists who are loved by fans and provide a creative environment.”
HYBE has submitted a competing slate of inside director recommendations featuring a handful of HYBE executives: Jung; Lee Jaesang, president of HYBE America; and Lee Jin Hwa, HYBE’s chief of management and planning.
For outside directors, HYBE has recommended Kang Namkyu, managing partner at GAON Law Group; Hong Sounman, professor of public administration at Yonsei University; and Lim Dae Woong, a representative of the United Nations Environment Program Finance Initiative. HYBE’s recommendation for part-time director is Park Byungmoo, managing partner at buyout firm VIG Partners; and Choi Kyu Dam, a former NCSOFT finance executive, for part-time auditor.
SM portrays the battle with HYBE as a fight for its independence from a large company. A HYBE takeover would put its interests over SM’s artists, SM says, and could force SM to downsize or divest assets to meet regulatory approval. What’s more, HYBE might not receive a warm welcome: 85% of SM employees who voted on the workplace app Blind oppose HYBE’s “hostile takeover” and want to “protect the culture diversity of K-pop and the unique identity of SM,” according to SM’s investor presentation.
Ultimately, the two sides have competing visions for a board of directors that will best serve SM shareholders and lead the company. To SM, HYBE’s recommended directors are either tied to Lee, employed by HYBE or hurt shareholder value in their previous corporate tenures. To HYBE, SM’s proposals could result in a board controlled by Align Partners that lacks the experience to expand SM and reach the company’s lofty targets.
“[I]t is questionable whether the current management has a sufficient understanding on these circumstances,” writes HYBE’s Jung.
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: A deep-dive into the messy – and litigious – situation inside the iconic 80s rock band Journey; an update on YNW Melly’s death-penalty case at the Florida Supreme Court; a sudden dismissal of a copyright lawsuit against Benny Blanco, Ed Sheeran and others; and much more.
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THE BIG STORY: Don’t Stop Litigatin’
If you read one thing this week, make it Steve Knopper’s long Billboard story about the simmering problems inside Journey — an epic tale of internal dysfunction among members of an iconic band that’s still printing money decades after its “Don’t Stop Believing” heyday.
The story has it all: dueling security guards in green rooms; a multi-million-dollar pay-per-view wedding; a trail of fired managers and staffers; and an absolute all-timer quote: “This is Neal. I am fucking your wife.” But above all else, it has lawsuits — ranging from divorce to defamation to intellectual property to assault.
Sure, there’s the current battle between lead guitarist Neal Schon and keyboardist Jonathan Cain over a disputed American Express card. But there’s also the lawsuit filed against Live Nation over an alleged assault on Schon’s wife, a case alleging a “coup” by former bandmates Steve Smith and bassist Ross Valory, a trademark dispute with former frontman Steve Perry and much more.
For the full breakdown of the crisis inside Journey, go read the entire story here.
Other top stories this week…
DEATH PENALTY DISPUTE – Prosecutors urged the Florida Supreme Court to reject an appeal by YNW Melly from a ruling last year that said he could face the death penalty if convicted at an upcoming murder trial. The rapper says the state forfeited the right to seek the death penalty by failing to give proper notice, but prosecutors say he “suffered no harm.”
MARILYN MANSON UPDATE – A week after one of Marilyn Manson’s sexual assault accusers recanted her allegations, a judge ruled that the sudden reversal couldn’t be used as evidence in Manson’s defamation lawsuit against his ex-fiance Evan Rachel Wood. The move came after Wood’s lawyers argued the “eleventh hour” revelation was just a “bad-faith” effort to save Manson’s case.
COPYRIGHT CASE CLOSED – Two songwriters who sued Benny Blanco, Halsey, Khalid and Ed Sheeran for copyright infringement over their 2018 hit “Eastside” suddenly dropped the lawsuit. The accusers told Billboard that they decided that continuing the case would have been “too costly, challenging, and risky for us”; but Blanco’s lawyer said the accusations were “baseless” and “never should have been made” in the first place.
PODCAST POT CLASH – Chris “Kit” Gray, the president and co-founder of PodcastOne, was hit with a lawsuit claiming he fired his executive assistant because she refused to ship cannabis products from California (where they’re legal) to his home in Florida (where they aren’t).
TRAVIS SCOTT’S NIGHTCLUB SCUFFLE – Police in New York sought to question rapper Travis Scott after he was accused of assaulting a sound engineer and causing $12,000 worth of damage to sound equipment at Manhattan nightclub Nebula. His reps called it “a misunderstanding being blown out of proportion” and stressed that no charges had been filed. Scott is expected to sit for questioning this week.
FORT LAUDERDALE, Fla. (AP) — A Florida prosecutor told jurors during closing arguments Tuesday (March 7) that three men on trial for the 2018 slaying of rapper XXXTentacion were “predators” who waited outside a motorcycle shop to rob and shoot the rising star, escaping with $50,000.
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Prosecutor Pascale Achille played cellphone videos the defendants allegedly took hours after the killing that showed them smiling and dancing as they flashed handfuls of $100 bills. Michael Boatwright, Dedrick Williams and Trayvon Newsome are all charged with first-degree murder and face mandatory life sentences if convicted.
“This is who they are. This is their real character. Killers that within 24 hours after shooting the victim dead and stealing $50,000 from him, this is what they do,” Achille told the jury as she played the video. “Look at how happy they look. Look at how excited they look.”
She also played surveillance video from the motorcycle shop and from where two of them allegedly stashed an SUV that she says link the men to the killing. And she recounted statements from a fourth man, Robert Allen, who pleaded guilty to second-degree murder last year and testified against his former friends.
George Reres, Newsome’s attorney, implored the jury not to convict his client based on Allen’s testimony or evidence implicating the other two defendants, saying, “He was not there.” He said that Allen, a 12-time convicted felon, should not be believed and that Newsome’s DNA was not found on any evidence.
He told jurors they should not believe Newsome is guilty simply because of the video showing him flashing money with the others, arguing he may not have even known where they got it.
“He did some stupid things — he posed with some money,” Reres said. “Guilt by association is not something the law permits.”
George Reres, Newsome’s attorney, implored the jury not to convict his client based on Allen’s testimony or evidence implicating the other two defendants – “he was not there.” He said Allen, a 12-time convicted felon, cannot be believed and that Newsome’s DNA is not found on any evidence.
He said they should not believe Newsome is guilty simply because there is a video showing him flashing money with the other defendants – he may not have even known where his friends got it.
“He did some stupid things – he posed with some money,” Reres said. “Guilt by association is not something the law permits.”
Mauricio Padilla, Williams’ attorney, called Allen a “liar.” He said the prosecution’s witnesses contradicted each other and Broward County sheriff’s detectives didn’t look at other possible suspects, including the Canadian star rapper Drake — he and XXXTentacion had an online feud. He said his client did tattooing and other work that paid him in cash, so the video of him flashing money means nothing.
Padilla also cast doubt on the value evidentiary value of the surveillance video, saying that while it may show his client in the store and walking back to the SUV, there are moments where the vehicle is blocked and Williams could have gotten out and left.
Boatwright’s attorney is to give his closing argument later Tuesday. The trial began a month ago.
XXXTentacion, whose real name was Jahseh Onfroy, had just left Riva Motorsports in suburban Fort Lauderdale on June 18, 2018, with a friend when his BMW was blocked by an SUV that swerved in front.
Surveillance video showed that two masked gunmen emerged and confronted the 20-year-old singer at the driver’s window, and one shot him repeatedly. They then grabbed a Louis Vuitton bag containing cash that XXXTentacion had just withdrawn from the bank, got back into the SUV and sped away. The friend was not harmed.
Boatwright, 28, is accused of being the shooter, while Newsome, 24, is accused of being the other gunman. Williams, 26, is accused of being the driver.
Prosecutors say the men, along with Allen, set out that day to commit robberies and went to the motorcycle shop to buy Williams a mask. There they spotted the rapper and decided to make him their target. Allen and Williams went inside the motorcycle shop to confirm it was him. They then went back to the SUV they had rented and waited for XXXTentacion to emerge and ambushed him, according to prosecutors.
The rapper, who pronounced his name “Ex ex ex ten-ta-see-YAWN,” was a platinum-selling rising star who tackled issues including prejudice and depression in his songs. He also drew criticism over bad behavior and multiple arrests, including charges that he severely beat and abused his girlfriend.
Producer, songwriter and artist Metro Boomin – a.k.a. Leland Tyler Wayne – has sold a portion of his entire existing publishing catalog to Shamrock Capital for close to $70 million, sources close to the deal tell Billboard.
News of the sale arrives on the heels of his second album HEROES & VILLAINS, which was released on Dec. 2, 2022. The record was peppered with some of the biggest names in music, including features from Young Thug, Travis Scott, Future, Don Toliver, Chris Brown, A$AP Rocky, Gunna, and late Migos member Takeoff. The album debuted at No. 1 on the Billboard 200 albums chart, making it his second album in a row to hit No. 1 as an artist.
As one of rap and R&B’s most defining creatives, Metro Boomin has helped craft hits like “Bad and Boujee” by Migos, “Mask Off” by Future, “Congratulations” by Post Malone, “Bank Account” by 21 Savage, “Father Stretch My Hands, Pt. 1” by Kanye West, “Jumpman” by Drake and Future, “Heartless” by The Weeknd, “Waves” by Kanye West, “Child’s Play” by Drake, “Tuesday” by iLoveMakonnen, and many more.
The multi-hyphenate musician has had 99 total entries on the Hot 100 chart as a producer, including two No. 1s and 10 top 10s. As an artist, Metro Boomin has 46 total entries on the Hot 100. He has spent 18 weeks at No. 1 on the Rap Producers chart and three weeks at No. 1 on the Hot 100 Producers and Hot 100 Songwriters charts.
Representatives for Shamrock did not return Billboard’s requests for comment. A representative for Metro Boomin declined to comment.
Shamrock was founded in 1978 as Roy E. Disney’s family office and has since become an active, powerful buyer in the music catalog investment space. It’s most notable investment being that of Taylor Swift’s Big Machine catalog which the firm bought from Scooter Braun’s Ithaca Holdings in 2020. In 2021, Shamrock expanded into the lending space with a $196 million debt fund to loan money to IP owners in entertainment.
Last month, on Feb. 2, 2023, Shamrock Capital announced that it raised $600 million in a new fund (Shamrock Capital Content Fund III) aimed at acquiring film, TV, music video games, and sports rights.
Metro Boomin’s deal, along with other recent hip-hop acquisitions — like Juice WRLD’s sale to Opus Music Group for a nine figure sum, Dr. Dre’s Shamrock and UMG deal for an estimated over $200 million, and Future’s publishing catalog sale to Influence Media Partners between $65-75 million — have proved that the genre is fueling new investor interest.
Those who have been skeptical of rap catalog sales often point to the genre’s short history, which may indicate sharper — or still unknown — decay curves from other genres like rock and pop. Decay curves, which are based on past performance of other songs in the genre, refer to when the song levels out into a predictable state of income generation.
But the 50th anniversary of hip-hop special at the 2023 Grammy awards and its continued dominance on streaming platforms may reveal that rap is ready to become another sought-after genre for buyers.
“There are certain names that have been around for a long enough period that they are now of an evergreen standard,” City National entertainment banking leader Denise Colletta recently told Billboard. “Those household names in hip-hop will continue to resonate with audiences.”
Florida prosecutors are urging the state’s supreme court to reject an appeal by YNW Melly over whether the rapper should face the death penalty if convicted in his upcoming murder trial.
Last month, lawyers for Melly (real name Jamell Demons) asked the Florida Supreme Court to tackle his case, arguing that prosecutors had forfeited the right to seek the death penalty by failing to give proper notice that they planned to do so.
But in a response last week, Florida’s attorney general told the top court that it should steer clear of the rapper’s case.
“Demons has suffered no harm,” prosecutors wrote in the Feb. 27 brief. “He was on notice for three years that the State was seeking death and at no time had the State indicated it was altering its sentencing intent.”
In asking the state high court to take up his case, Melly has argued that it raises issues of “great public importance” for Florida law beyond his individual charges. But in their response, prosecutors said there was no such pressing need for such judicial review.
“No other district court has been faced with this issue, thus showing that the issue rarely arises,” the state wrote in its brief. “Should a death sentence be imposed, this Court will have the opportunity to resolve this unique matter on direct appeal.”
Melly has spent years awaiting trial on first-degree murder charges over accusations that he and another YNW rapper shot and killed Anthony “YNW Sakchaser” Williams and Christopher “YNW Juvy” Thomas Jr. in 2018.
A first-degree murder defendant in Florida would typically face the possibility of execution if convicted, but Melly’s attorneys argued last year that the state had failed to comply with strict laws on how they must warn defendants that they’ll seek the death penalty.
Florida requires prosecutors to give notice 45 days after arraignment if they plan to seek capital punishment. In Melly’s case, the state attorney filed such a notice when they originally indicted the rapper in 2019, but failed to do so when a so-called superseding indictment was handed down earlier this year.
In July, a trial judge sided with Melly’s attorneys and said prosecutors had forfeited the chance to seek death. But in November, an appeals court ruled the judge’s decision was incorrect. The court wrote that since prosecutors gave notice that they might seek death when they first charged Melly in 2019, they had complied with state rules: “Notice is notice.”
Melly appealed that ruling to the Florida Supreme Court last month, arguing it was important that the death penalty law have “precisely defined and easily understood rules.” But like the U.S. Supreme Court, Florida’s top court hears only a small percentage of the appeals it receives.
In its new brief, state prosecutors urged the court to refuse to do so in Melly’s case: “Demons attempts to find conflict were there is none.”
A decision on whether to take the case will be issued by the high court in the months ahead. If it takes the case, both sides will then present more in-depth arguments on the disputed issues. If not, the case will return to the lower court for a jury trial on the murder charges against Melly.
Silvio Pietroluongo has been promoted to executive vp of charts & data partnerships at Billboard, it was announced Tuesday (Mar. 7).
The New York-based Pietroluongo, who was previously senior vp of charts & data development, is a 30-year veteran of the brand who has led Billboard‘s chart operation since 2008. In his new role, he will recruit new data partners for chart inclusion while collaborating closely with various departments within Billboard and PMC to create content and further business initiatives for the Billboard brand domestically and across the globe.
“Silvio’s contributions to Billboard and its charts is undeniable. Throughout the years, Silvio has been an exceptional operational leader among us and someone whose passion, commitment, and relationships shapes our daily team culture,” said Billboard president Mike Van in a statement on Pietroluongo’s promotion. “We are beyond thrilled to be able to recognize him and honor his commitment to making the ‘Billboard Charts’ what they are today.”
Under Pietroluongo’s leadership, the Billboard charts have evolved to reflect the ever-evolving digital and social media age, optimizing the comprehensive data sets that accurately and definitively measure success in music. During his tenure, Billboard’s charts were the first globally to include audio and video streams to measure song and album consumption. More recently, Billboard launched the Billboard Global 200 and Billboard Excl. U.S. charts to measure worldwide song popularity as well as expanded its menu of international song ranking under the Hits of the World banner to over 40 territories.
Pietroluongo started his Billboard career as an intern and moved up the ranks from there, serving in various leadership roles including research supervisor. He was promoted to associate director of charts in 2006, director of charts in 2008, vp of charts & data development in 2014 and senior vp of charts & data development in 2018.
Korean tech company Kakao will launch a tender offer to acquire up to 35% of SM Entertainment’s outstanding shares. The move came a day after a court injunction forced Kakao to cancel its plan to acquire a 9.05% stake directly from SM, whose roster includes NCT 127 and Red Velvet; a court injunction scuttled SM’s plan to issue new shares and give Kakao the stake, according to reports by Bloomberg and Reuters.
Kakao and its subsidiary Kakao Entertainment are seeking to become SM’s largest shareholder and partner, to help rebuild the company after SM’s board of directors terminated a production contract with the company’s legendary founder, Lee Soo-man, on Dec. 31. Lee sold most of his SM shares to HYBE, the home of BTS, on Feb. 22 and won a court injunction Friday that prevented SM from issuing new shares to Kakao. As a result, Kakao has been forced to seek shares from existing SM shareholders instead.
HYBE had sought an additional 25% stake in SM through a tender offer but was able to purchase slightly less than 1% of outstanding shares, the company revealed in a regulatory filing Monday (March 6). That increased HYBE’s ownership stake in SM to 15.8%. With Lee’s 3.65% stake, HYBE has voting power of 19.4% of outstanding shares. The next-largest shareholder, Korea’s National Pension Service, owns 6.2% of SM’s shares.
Kakao and HYBE are locked in a battle for control of SM’s board of directors ahead of the company’s annual general meeting on March 31. “Kakao has strong trust in the excellent competitiveness of SM Entertainment’s current management, employees, and artists, and the current management’s efforts to resolve the factors that hinder SM Entertainment’s growth,” the company said in a statement.
HYBE sees itself as the more skilled, experienced company to guide SM’s global ambitions and has criticized its competitor’s “utterly irresponsible contract” with Kakao.
Kakao and its subsidiary Kakao Entertainment, which raised $966 million from the sovereign wealth funds of Saudi Arabia and Singapore in January, will offer 150,000 won ($115.46) per share — a 25% premium over the 120,000 won ($92.36) per share HYBE offered.
SM’s share price rose 13.8% to 148,100 won ($114.09) on Tuesday morning in Seoul following news of Kakao’s tender offer.
Additional reporting by Jeyup S. Kwaak.
Paramount is exploring a potential sale of a majority stake in its BET business, which includes BET, VH1, and the BET+ streaming service, a source familiar with the matter tells The Hollywood Reporter.
The source cautioned that the discussions are still in the early stages, and there is no guarantee of any transaction taking place. They added that if a deal closes, Paramount expects to maintain a minority stake in the business, as well as a commercial relationship. Scott Mills serves as BET’s CEO.
BET is also unusual within Paramount’s portfolio in that some of its divisions have minority investors of their own. BET+, for example, counts Tyler Perry as an investor, while BET Studios counts Kenya Barris and Rashida Jones as stakeholders. Those deals would complicate any effort to merge BET+ or BET Studios into Paramount+ or one of the company’s other studios.
Such a deal, if it happens, would give Paramount cash as it continues to build out its main streaming offering, Paramount+, and as it reviews its holdings and figures out where things piece together in its strategy moving forward.
In January, the company announced plans to merge its Paramount+ and Showtime businesses.
Founded in 1980 by former cable lobbyist Robert Johnson and his wife Sheila Johnson, the BET channel was the first cable network to specifically cater to African American audiences. Paramount (then known as Viacom) acquired BET in 2000 for $2.3 billion.
While it is too early to say who potential buyers could be, given BET’s status in the African American community, high-net-worth Black individuals, or a Black-led company, would make some sense. A number of high-profile advertisers, including General Motors and Coca-Cola, have committed to significantly increase their ad spend on minority-owned media companies. While BET targets a minority audience, its Paramount ownership would not fit that bill.
The Wall Street Journal first reported the discussions.
This story originally appeared at THR.com.
As North America’s largest independent promoter, Gregg Perloff, the co-founder/CEO of Another Planet Entertainment, isn’t the type to ask for permission from the majors before making his next move.
Perloff has learned since selling Bill Graham Presents in the 1990s to the company that would become Live Nation that stealth can be a strategic advantage in the live-music business. That’s especially true when competing against Live Nation and AEG, which each have hundreds of millions of dollars in capital.
So, after three years of secretly negotiating, leasing and remodeling a 45,000-square-foot venue in downtown Los Angeles — AEG and Live Nation turf — Perloff and The Bowery Presents co-founder Michael Swier are about to open The Bellwether. The two-story venue is located west of the 110 Freeway between Third and Fourth streets. The one-city-block-long space is anchored by a 1,600-capacity general-admission theater and features a street-level bar and restaurant, plus a 600-capacity private event space. The venue also comes with provenance: It was once owned by Prince, who named it after his 1992 song “Glam Slam.”
Prince moved out in 1995, and a parade of lesser-known club operators followed. Months before the 2020 shutdown of live music, Swier found it. Instead of buying the building from its current owner, Perloff and Swier — who owns L.A.’s Teragram Ballroom and Moroccan Lounge — quietly worked out a long-term lease and started preparing the building for a 2023 opening. The Bellwether will be booked by long-time Another Planet Talent buyer Nick Barrie.
Perloff pulled off a similar coup in 2007 when he engaged in under-the-radar negotiations with San Francisco officials to secure a permit for the first multiday, after-sundown private festival in Golden Gate Park. Knowing the city badly needed revenue due to budget shortfalls, Perloff and his team kept the talks under wraps and got the agreement signed despite the last-minute protests of his competitors in San Francisco’s Live Nation office. That event, Outside Lands, is today one of the highest-grossing independently owned festivals in the United States.
Basketballs signed by late UCLA Bruins coach John Wooden and Golden State Warriors point guard Steph Curry. Former San Francisco Giants catcher Buster Posey autographed the miniature bat.
Karen Santos
Perloff, who has six decades of experience in the live-music business, sat down with Billboard to discuss his new L.A. venue, his thoughts on the Taylor Swift ticketing debacle, the U.S. Senate’s subsequent grilling of Ticketmaster, and the effectiveness of the U.S. Department of Justice’s 2010 consent decree and the protections put in place to protect Ticketmaster customers.
Let’s hear the big news about your new music venue.
We will be opening our first venue in L.A. in decades: a 1,600-seat music venue just west of downtown. We’re partnering with Michael Swier, who owns some of New York’s most iconic rooms like Bowery Ballroom and the Mercury Lounge. The new venue will have an open floor plan that can host any type of contemporary music act or genre. It’s got perfect sight lines with a wraparound balcony and side lounge where people can relax. We’ve got a d&b [audiotechnik] sound system custom-built for this particular room. When we saw this new space, every one of us said, “Oh, my God. We have to do this.”
Perloff says he bought this sculpture by glass artist Dale Chihuly “at an Oakland children’s hospital music therapy event.”
Karen Santos
Did 2022 meet your expectations in terms of sales?
It was a really good year for us, and our sales in 2023 are so much better than they’ve ever been. I don’t think I’m alone in this. While everyone’s saying there aren’t enough acts out there, the other side of the coin is sales are spectacular. When the end of 2021 came, there seemed to be this built-up demand after the pandemic, and we had a burst of great sales including for our festivals Outside Lands and Life Is Beautiful, both of which sold out. We had a really great 2022 as well. [Billboard parent company PMC Media is a majority owner of Life Is Beautiful.]
Why is sales momentum continuing to build?
Maybe it’s that half the people going to shows right now were ready the day the doors opened back up, and the other half now have joined in. I literally have never seen a situation like this.
Do you worry about business cooling off in late summer?
Not for Outside Lands. It was held during the first week of August and had its best year in 2022. But to your point, I’ve always said that it would be better for everyone if we could figure out how to convince artists to play all year round and go from a six- or seven-month business where everyone’s compressed together to one where artists go out earlier in the year.
Another Planet was one of the few concert companies that did not lay off any of its staff during the pandemic. Why was that important to you?
We were the only concert company that kept 100% of our employees on payroll with no salary reduction during the entire pandemic. It was important that people could continue their lifestyle. I didn’t understand why these big companies didn’t do the same. There was plenty of work to be done from home: new venues, different ways to tell people about our shows and production and building maintenance. When the pandemic ended, we were ready to go.
You’ve been a Ticketmaster client for a long time and stayed with the company after its merger with Live Nation. Over a decade later, do you think the Department of Justice got it right?
I’ll say this: There is supposed to be a firewall in place so that Ticketmaster won’t share your data with the concert promotion side of Live Nation. If anyone believes that Live Nation can’t get numbers from Ticketmaster, they’re very naive. Somehow people seem to know what everybody else’s ticket sales are.
A tambourine depicting legendary concert promoter Bill Graham that Perloff got at an event thrown by his late boss’ memorial foundation.
Karen Santos
Do you agree with the argument that Ticketmaster leverages Live Nation content to land ticketing contracts?
No, and I can’t believe that the Senate keeps fixating on something that is irrelevant. They don’t do it. That isn’t an issue. To listen to the Senate talking about arenas when Live Nation doesn’t even own an arena in this country is just crazy. Secondly, when the Department of Justice said it was going to subsidize AEG’s AXS ticketing to be a competitor to Ticketmaster [in 2010], we all saw how that went — not very good. I’m not sure that most people would pick AXS over Ticketmaster.
Because of Ticketmaster’s dominance?
No. What I’m saying is that it’s hard for me to take the government seriously when they say they want to stop monopolies when there are monopolies in every part of business, from telecom to transportation.
What are your reasons for sticking with Ticketmaster?
I thought Ticketmaster was doing a good job for us. I have nothing bad to say about my competitors. Everyone wants to pick on AEG and Live Nation, but most people have no idea how hard it is to produce a tour. I toured Star Wars: In Concert with LucasFilm around the world for five years and worked on tours with Bill Graham; it’s a completely different game than being a local promoter. AEG and Live Nation do an incredible job and should be applauded for the work they do with Taylor Swift and Bruce Springsteen. Every five years, you get an artist that’s so popular that you just can’t make everyone happy.
Do you think the Swift ticket sale was mishandled?
I think there were a number of problems with the Taylor Swift on-sale. This might be the first controversial thing I’ll say in this interview: Bands really want to put the whole tour on sale at once because they can advertise the whole tour at once and make a bigger splash.
Fender guitar cases containing instruments won at a benefit auction for The Bridge School, which was co-founded by Pegi Young, the first wife of Neil Young.
Karen Santos
Right, and for Swift, something like 2.2 million tickets went on sale simultaneously.
If someone’s touring for six months, it might make some sense to maybe break the tour into two segments and go on sale with the second part of the tour closer to the dates. But there’s no system in the world — and this is where I have to defend Ticketmaster — that could have handled the onslaught.
Do you think the Senate understands that?
My question for them is, “Why are you picking on Ticketmaster and Live Nation when you should be outlawing brokers?” They are the ones who screw up everything. Does every promoter take a few tickets? Does every venue have a few tickets? Sure. But it’s the scalpers that make it so no one can get a decent seat except the rich. The Senate didn’t do the research they should have done before they started pontificating and acting like they knew what they were talking about.
What’s the best way to stop scalping?
Many years ago, my business partner, Sherry Wasserman, came up with a brilliant system for Prince at the Wilshire in Los Angeles back when I ran the theater. We wanted to completely stop brokering for the show, and we made people line up the day before the show and present an ID when buying tickets. It was foolproof, we thought. And then the next day as people are walking in, here comes Muhammad Ali with tickets and a matching ID. Muhammad Ali certainly wasn’t in line the day before when we sold the tickets, but here he was with a ticket and ID. We didn’t know how, but he managed to beat the system. We just laughed and thought, “We did the best we could do.”
HYBE’s plan to control competing K-pop company SM Entertainment and thwart a partnership with tech company Kakao took another step forward on Monday when Kakao, responding to a court injunction, announced it had canceled its stock purchase agreement to acquire a 9.05% stake in SM Entertainment.
Last week, the Seoul Eastern District Court granted a provisionary injunction against SM’s plan to issue new shares and convertible bonds. The judge ruled that SM had made its decision without shareholders’ consent. It was a remarkable win for SM’s controversial founder, Lee Soo-man, and for HYBE, the reigning K-pop company and home to boyband BTS.
For weeks, SM’s management has been trying to wrest control of the company from Lee, who has been found guilty of embezzlement and exercised iron-fisted control over the company he founded in 1995. After SM made a deal with Kakao, Lee turned to HYBE, which became SM’s largest shareholder on Feb. 22 after it acquired a 14.8% stake from Lee, whose production contract with SM was canceled as of Dec. 31.
On Monday, HYBE sent a letter to SM demanding that “the current [SM] Board of Directors should fulfill its duty of care and duty of loyalty towards SM and actively exercise the right to terminate the business cooperation agreement, which contains clauses that are disadvantageous to SM and advantageous to Kakao,” according to a statement that described the letter.
With the injunction in place, HYBE also called for SM to exercise its right to withdraw the recommendation of the director candidate nominated by Kakao. SM had put forward Jang Yoon-Joong, Kakao’s global strategy officer, as a part-time director.
SM and HYBE are pushing competing visions for SM’s future before shareholders vote on a new board of directors at SM’s annual general meeting on March 31. SM wants to partner with Kakao – owner of the Melon music streaming service and KakaoTalk messaging service – to better monetize its intellectual property and launch a joint venture in the U.S.
Called “SM 3.0,” the road map calls for SM to break from the single-producer system maintained by Lee until his removal. Instead, SM wants to develop artists through multiple labels and production centers in Korea, Japan, Southeast and the U.S.
HYBE calls an SM-Kakao tie-up an “unfair partnership” that would give Kakao permanent and exclusive rights to distribute SM’s music, protect SM’s equity at the expense of other shareholders and create conflict of interests that favor Kakao. “We believe that these details demonstrate the bias and irrationality of the current SM management who approved such arrangements,” Jung Jinsoo, HYBE’s chief legal officer, wrote in a letter to SM shareholders on Thursday (March 2).
