Almost $3 million was paid to Live Nation by The New Jersey Sports and Exposition Authority to encourage concert promotion giant to bring top artists to Authority concert venues. The secret kickbacks were revealed in documents released following a legal battle between the Authority and the NJ Star-Ledger.
According to The Star-Ledger, the lion's share of these rebates went to promoter Live Nation, who collected $2.9 million in rental discounts since 2007, including more than $800,000 in 2011 alone for events staged at the Izod Center. The Izod Center generated event income of $22 million in 2011, meaning Live Nation's rebates accounted for about 3% of the venue's rental revenue.
While not illegal, the rebates were kept confidential. Richard Barnet, co-author of "This Business of Concert Promotion and Touring" and a professor at Middle Tennessee State University told the Star-Ledger "They call it rebates. I call it kickbacks.
According to The Star-Ledger, the deal between Live Nation and the Authority worked on a sliding scale per-ticket rebate, meaning that the more concerts Live Nation booked at the Meadowlands, the more of a rebate per ticket Live Nation would get. Rebates for Live Nation ranged from $4 to $6 dollars per ticket. In exchange, the promoter agreed to provide "priority scheduling rights" for certain concerts.
Other Promoters Received Kiickbacks
And it wasn't just Live Nation. Other promoters involved in the rebate system include AEG Live, who recieved $265,000 over three years; Metropolitan, who netted $30,000 and Bowery Presents earned $110,000. According to James Minish, the sports authority's executive vice president, the program has been very successful for the Izod Center. "It?s given us more shows," Minish told The Star-Ledger.
Ron VanDeVeen, who booked shows at the Izod Center for the Authority elaborated, describing the kickback system as evolving from an effort to ameliorate risk for the Authority, with the venue picking up half of the cost of a show in exchange for a share of the gate. "We?re a state agency. We did not want to take that risk," VanDeVeen told The Star-Ledger.
Metropolitan Talent's John Scher expressed surprise at the amount Live Nation receieved in kickbacks from the Authority. "Strong-arming is alive and well," said Scher, who's company also received a small share of the rebates. "At the end of the day, it all comes out to more money for the presenter; less money for the Sports Authority," he added.
Spokespersons for Live Nation and AEG Live declined to comment to The Star-Ledger on the story. The documents obtained by the Star-Ledger can be viewed here. via CelebrityAccess