Industry Profile: Louis Messina
— By Larry LeBlanc
This week In The Hot Seat with Larry LeBlanc: Louis Messina
Louis Messina, the founder/principal of The Messina Group/AEG Live, believes that one of his jobs as a concert promoter is to cater to the people who buy tickets for his shows while building future superstars.
Houston-based Messina, the son of a boxing promoter, began his career as independent promoter in New Orleans. Then, as president of Pace Concerts in Houston, he helped to build a live entertainment empire.
At Pace, he also created such iconic American rock events as Ozzfest, Texxas Jam, and Van Halen's Monsters of Rock. As well, he launched the George Strait Country Music Festival, and nationally toured Tim McGraw, the Dixie Chicks, Faith Hill, Brad Paisley, Alan Jackson, and Kenny Chesney.
Since 2001, operating as TMG/AEG, the high-powered Messina has single-handedly reignited the national concert circuit with celebrated tours by Taylor Swift, Sugarland, George Strait and Kenny Chesney.
As a high school student in New Orleans, Messina booked small club shows. At PM Productions, he booked, produced, and even hung posters. In Nov. 23, 1972, he promoted his first major concert -- A sellout with 8,000 people turning out – but the headliners Curtis Mayfield and B.B. King failed to show due to poor weather.
In 1975, Messina moved to Houston and co-founded Pace Concerts, a division of Pace Entertainment, the multifaceted entertainment company co-founded in 1966 by Allen Becker, a former insurance salesman.
Becker had spent a decade producing all kinds of motor sports events, including motorcycle jumping and races, as well as a few music concerts.
When the New Orleans Superdome opened in 1975, Becker was awarded a contract by the State of Louisiana to produce the grand-opening entertainment. There he met Messina and, following an Allman Brothers show that they co-produced together, they decided to start Pace Concerts.
Their first show on Nov. 1, 1975 with The Who was the grand opening for the multi-purpose Houston sports arena, The Summit (later renamed the Compaq Center). The second show was ZZ Top followed by bills locally with Willie Nelson, Cat Stevens and Paul McCartney & Wings.
Then things nosedived.
As last man on the totem pole, Pace Concerts had to take on a slew of new acts that were “financial losers,” including Bruce Springsteen and the E Street Band as well as doing shows in small Texas cities like Harlingen and McAllen, in order to get the rights to promote bigger acts in larger Texas cities.
But Pace Concerts soon took over the Texas market, toppling Concerts West, the largest concert promoter in the market in the ‘70s. Then, Messina, along with Becker's sons Gary and Brian, piloted Pace Concerts to being one of America’s preeminent promoters, promoting club, arena and stadium shows throughout the country.
Pace Concerts spearheaded the amphitheater boom, beginning with Starwood Amphitheatre in the Nashville suburb of Antioch. Pace came to build and own an interest in 13 amphitheaters across the country.
In the late 1990s, consolidation hit the concert business when Robert FX Sillerman, under the SFX Entertainment banner, spent about $2.5 billion rolling up promoters in North America and Europe.
Pace Entertainment was snapped up in 1998 by SFX Broadcasting in a $130 million deal that included Pace Concerts, Pace Theatrical, Pace Motorsports and the company's 13 amphitheaters.
With a stake of slightly under 10%, Messina was the largest shareholder in Pace Entertainment, outside of the Becker family.
Sillerman sold SFX to radio conglomerate Clear Channel Communications in 2000 for about $4 billion, with Clear Channel forming Clear Channel Entertainment (CCE) in hopes of synergizing its live and radio businesses.
That synergy, says Messina, never developed. He was one of the several executives who left before Clear Channel spun off its live entertainment division to form free-standing, publicly traded Live Nation.
CCE didn’t let Messina leave freely. He argued he had a one year non-compete clause; CCE had a differing view and it appeared as if Messina and CCE were headed toward litigation.
The dispute, however, was settled out of court and Messina was allowed to set up TMG. However, due to a non-compete clause with CCE that kept him from promoting rock and pop music for two years, Messina decided to focus on country.
Afterwards, Messina entered into a joint venture with AEG Live. The TMG/AEG Live joint venture is a three-pronged deal in which Messina oversees the South region, TMG acts as the country music arm of AEG Live, and overall, he helps to build the company.
With its middle-class fan base, cross-generational appeal, clearly defined radio format and superstar headliners like George Strait, Kenny Chesney, Toby Keith, Keith Urban, Rascal Flatts, Brad Paisley and newcomer Taylor Swift, country music today is a powerhouse concert attraction.
Take 19-year-old Taylor Swift.
As one of the youngest headliners in the concert business, and one of the several acts in country with crossover appeal (racking up 17 million tracks sold at iTunes), Swift continues to support her latest album, "Fearless" with an ongoing sold-out North American tour. “Fearless” topped the Billboard Hot 200 for 11 weeks and its lead off single “Love Story,” the most downloaded country song in history, has been no. 1 in 22 territories.
With the success of her album "Fearless," Swift could have played multiple-night runs at venues like Madison Square Garden in New York or the Staples Center in Los Angeles, according to Messina, but the singer wanted to underplay the tour dates.
Messina and Festival Productions in New Orleans will team up for a major country music festival at Louisiana State University's Tiger Stadium in Baton Rouge on the Memorial Day weekend in May, 2010. Tentatively dubbed The Bayou Country Superfest, it will be the first music concerts ever at Tiger Stadium.
Country is an exciting sector of the concert world these days.
The (concert) business is healthy as long as you offer people what they want to see—if you give people a good product; if there’s a good value for the cost of the ticket; and you give them a good show.
The relationship between a promoter and an artist often transcends business does it not?
Without a doubt. When you are involved, when you have passion toward your artist, and when you know the two of you are on the same page, you kill for that artist. You bleed for him or her. Like with Kenny Chesney, George (Strait) and Taylor Swift, I bleed for them.
With over $18 million in earnings in the past year, Forbes magazine ranks Taylor Swift as the 69th most powerful celebrity.
When I first saw Taylor three years ago opening for George Strait, I knew there was something special there. There was an aura about her; a gleam in her eyes. You could sense (her star quality). When they asked if I’d like to work with her I said, “Do you want my heart to keep beating?” Of course, I wanted to be in the Taylor Swift business. She’s wonderful. Her parents are wonderful. I love everything about her -- her work ethic, her vision (for her career), and the family environment she has.
How did you plan out her North American Fearless Tour that takes in over 50 cities?
When I got involved, I did two things. I booked the smaller building in town, and I booked the bigger building in town. When there was only one building I had one configuration, and I had a second configuration. Before the shows went on sale I said, “Don’t be surprised if this tour just doesn’t go crazy.” “Fearless” wasn’t even out yet. I just had a gut feeling about the tour. But was I blown away that we were selling out (shows) in three minutes? Absolutely. I have never been involved with any act from the Rolling Stones to Bruce Springsteen to U2 that sold out this fast. We could have done four Madison Square Garden shows, four Staples Center shows, and four shows in Chicago.
What are Taylor’s demographics at her concerts?
It’s 65% girls. Its young girls with their moms who are in their ‘30s singing the words to every song. But the guys are there too. Everybody sings every song.
What is Kenny Chesney’s appeal?
Kenny is a superstar. I call him “Rock Star.” I love him and he’s a superstar. It is as simple as that. Not only in country music but in the entertainment business, everybody gravitates toward him now. There’s no telling who’ll shows up at one of his shows. It’s Joe Walsh or Bruce Springsteen. Kenny is in the upper echelons of superstars in the United States. There’s nobody that sells more tickets than Kenny year after year.
Your nickname is “Kenny’s Boy.”
I am “Kenny’s Boy.” Let’s not get wrong about that now. We have all worked (on building his career) but it’s all been Kenny. He works his butt off and he gives everything that he’s got but he has allowed us to do our jobs. He allowed me to do my job and my staff to do their jobs. He allowed (manager) Clint Higham to do his job.
With Kenny, we pride ourselves on always having a great package. His opening acts have been Keith Urban, Rascal Flatts, Gretchen Wilson, Sugarland, Dierks Bentley and, this year, Miranda Lambert (who gained fame as a finalist on the 2003 season of “Nashville Star”) who is going to be a superstar one day.
Platforming acts has been a pivotal strategy in building headliners in country. George Strait had Tim McGraw open for him. Then Tim had Kenny Chesney open for him. Kenny helped build Rascal Flatts and they then helped to build Brad Paisley.
Exactly. That’s how it all got started for me in country music. I had a relationship with George in the early days. Then he fired me. Then I got hired back and I created the George Strait Country Music Festival in San Antonio. We did a couple of one-off (shows) in San Antonio and Dallas and then we decided to take (the festival) on the road. That opened the doors to Tim McGraw, Faith Hill, the Dixie Chicks, and Kenny Chesney.
That is kind of how I started “Louie World.”
“Louie World” started out when I left Pace Concerts (in 2001). We made an arrangement and I was able to carve out (a section of the concert market) with George Strait, the Dixie Chicks, Tim McGraw, Faith Hill and Kenny Chesney.
Despite your legal tangles with Pace Concerts (then owned by Clear Channel Entertainment) over a non-compete clause, you had a good relationship with Allen Becker who co-founded Pace Entertainment. He was a mentor to you.
And he still is. He’s still my best friend. But his company had moved on (after being bought by SFX). Allen wasn’t really a part of it anymore and it wasn’t where I wanted to be. I knew I had a one year non-compete (in my contract). They said I had five years. I said, “What are you talking about? I only have two years left in my contract.” They didn’t read about the freeing of the slaves. It was crazy. We were ready to go to battle. (Allen Becker’s son) Brian was caught in the middle (as chairman and CEO of CCE. In 2006, Brian co-founded Base Entertainment). Other people there in the day-to-day negotiations with me were friends but it was like I never knew them before.
Pace Entertainment was sold to SFX Broadcasting in 1998 for an estimated $130 million, almost 11 times its annual earnings. That was said to be the highest paid for a concert promotion company purchased by SFX in the ‘90s.
Well, we were the only ones that had assets. The rest of them just had good bullshit. We had the sheds (amphitheatres) and we had motor sports and we had a theatrical (division). We had everything. It was one-stop shopping.
You had an overall share of 10% in Pace Entertainment. Did you become wealthy with SFX buying the company?
I wouldn’t say I became wealthy but I could pay bills. It was a good pay day.
How was the transition for Pace with the takeover by SFX?
When SFX bought Pace and those other (concert promoter) companies, you had five companies that had always competed and were still competing, although they were now in the same company.
After SFX was sold to Clear Channel Communications in 2000, you initially figured that Clear Channel Entertainment (since renamed Live Nation) was the way to grow the business, did you not?
I thought it was brilliant. You put live and radio together. What a way to grow the business. But they did it all wrong.
There didn’t seem to be synergy between the different divisions of Clear Channel Communications.
There was zero. At the radio and live (companies), nobody knew each other. Nobody cared to know each other. Like I said, they went about it the wrong way. Instead of trying to embrace the music to the live music business, they went in with baseball bats and said, “This is the way we are now doing business.” Everybody rebelled.
Was concert promotion an industry that needed to mature by consolidation? Given what was going on with other entertainment businesses at the same time.
The first and second generations of (American) concert promoters was like The Mob. We had our families. We had our territories. Pace was kind of a carpetbagger in that we began building amphitheatres and started going into everybody’s back yard. But we knew we couldn’t survive being (only) a concert promoter. We had to get into the popcorn and peanut business.
In an around about way consolidation was semi-good. It made people rethink how to do business. But it has not worked -- just look at how much Clear Channel had to write off, and look at Live Nation today. They are all my friends, and I do a lot of business with Live Nation, but when is it going to explode?
In a recent interview with CNBC's Julia Boorstin, Live Nation CEO Michael Rapino said, “In our business 40% of our tickets are unsold, so our job at the end of the day is to fill the building.” Are tickets overpriced?
It is a two part (problem). It is overpricing and it is overbooking. That was one of my (complaints) at Pace and operating all of the amphitheatres. People used to say that we have to grow our business at 25% every year. But if you looked at numbers each year, 80% of our losses came from 20% of our shows. I said the way to grow the business was to do fewer shows.
I’d rather have fewer shows and sell 25% more tickets. All we are doing in these amphitheatres is cannibalizing each other. People cannot go to 500 shows a year. They just can’t, even in a good economy. (Promoters) say, “Well we have all of these sponsor commitments.” I say, “Take less money.” I argued that until I was blue in the face (while at Pace). I still think that is the same problem today, they are booking too many shows.
There’s a ticket pricing ceiling as well. People say we have reached it.
It’s interesting that you say that.
Well, people will pay more for a good seat on the secondary ticket market.
People will buy P1 tickets. I haven’t seen the limits on that yet. The tickets that people won’t buy are the P2s and P3s. My theory is that the people who would normally go to concerts, and who can’t afford the P1s and are forced to buy P2s and P3, don’t feel that they have a shot at getting a good seat. Maybe they are discouraged before they even have a chance to buy a ticket.
There’s not an act I’d pay $250 to see.
I am in total agreement with you there. That’s a lot of money. I used to hear, “Well, you pay that for Broadway (tickets).”
Many Broadway shows are offering reduced tickets right now. They are hurting due to the economy and lack of tourists.
There are empty seats everywhere.
Critics of secondary ticketing say the practice is a potential can of worms for the concert industry.
Well, it is, but it’s a huge business. The artist and some of the promoters don’t share in it. But it’s there. It always has been there. It has just gotten bigger.
Then raise the ticket price.
That’s what these secondary tickets are in these auctions (for shows). Artists are saying, “Okay, what do you want to pay for a ticket? Here’s what we think its worth. What do you want to pay? In some cases, artists share (in the secondary ticketing income). We were going to do that with Taylor, and she just pulled it right off of the table. I explained to her what auction tickets are. First, she went, “Okay, we can do that.” Then she realized what it is, and she said, “I can’t do that. I’m scalping my own ticket.” We pulled it before tickets went on sale. It cost her $1 million (for the tour).
I think the ticket needs to be sacred. I really do. I think that there is a bond between the fans and the artists. And I think that the ticket has to be sacred. Unfortunately, it’s not. I mean (a marketplace) where the secondary market goes away. But how do you do it? Do you do the paperless ticket? Everybody has a scam. The secondary ticket business is too big for it to go away, and it’s getting bigger.
A few years ago, you talked about the problem of offering deep discounts. That shows may be overvalued.
You reach a threshold that people won’t spend money on a ticket. If you discount it, you have to discount it properly. If I have upper balcony tickets what I do is flex (pricing). Even with Kenny Chesney this year, we have P3 tickets as low as $20. The same with Taylor Swift, but Taylor sells out in a heartbeat. But Kenny is playing stadiums. I will flex the P3 tickets. If they don’t sell, I will add more $20 tickets. I’d rather discount a ticket than give it away. Because once you start giving away tickets, you are done. The act is done. I’d rather have fans in the seats than give tickets away. There are just so many firemen that can go to shows.
To develop new revenue streams, artists are even starting to charge for backstage meet and greets.
An artist has to make a living, you can’t deny them that. If an artist wants to take the time to meet 50 or 150 people and, maybe, have a private concert for them, that’s their prerogative. I don’t see anything wrong with that. It is like a baseball player, they only have so much shelf life. With artists, even though they have made millions, the meter keeps running. Sponsorships used to be taboo.
Yes, but what was your first reaction when Michael Cohl’s The BCL Group took over the Rolling Stones’ touring in 1989 and rolled out a slew of merchandise for the Steel Wheels Tour? This was the band that used to be the anti-establishment band.
When they get onstage, they still are. When Michael did the Rolling Stones, he took the business to another level. Now it’s designer clothes and vintage concert shirts. People do not have to buy that merchandise if they don’t want to, but it’s there. I can’t begrudge anyone for doing stuff that that could enhance them financially.
You seem excited about your co-venture with Quint Davis’ Festival Productions for the inaugural Bayou Country Superfest at Tiger Stadium in Baton Rouge next year.
Quint’s a genius, you know. He really is. I love him. I always have. With me being from New Orleans, and him being involved with the jazz festival (as producer of the New Orleans Jazz & Heritage Festival), I was honored that he even asked me to be a part of it. Quint is just so creative. Everything he’s done with the jazz fest has been wonderful. He came to me with this idea of doing a show in Baton Rouge and he asked me for my help. He came to see Kenny. He went “Holy Shmoley. Look at this production! This is the Rolling Stones or bigger!”
You created the George Strait Country Music Festival, Ozzfest, Texxas Jam, and Van Halen's Monsters of Rock. Back in New Orleans, you created Dr. John Mardi Gras Mambo.
Is the event aspect of the concert experience important to you?
There’s nothing like an event. It sets things apart from everything else and it’s exciting when you create something.
You father took you to see Elvis Presley at the Municipal Auditorium in New Orleans in 1957. Did you go to boxing matches too?
I went to tons of boxing matches. I still love boxing. But that’s not the reason I got into the business. I did it because I really love music. I loved the excitement that happened in front of the stage. I never tried to pick up a guitar or anything like that. But I used to do pantomime Elvis in front of the mirror.
You didn’t go to college; you went to work at a radio station selling advertising so you could make connections in the music business. Why concert promotion as a career?
I am not qualified for anything else. This is something that I always wanted to do. Even in high school, I did dances with local bands. I rented out VFW halls and did theme dances. I’d book Paul Varisco and the Milestones (on Chase Records). I got started promoting those guys twice a year and they were really successful. Working at PM Productions, I became a professional while I was still in high school.
PM Productions was the promoter of the Curtis Mayfield and B.B. King no-show?
That was PM Productions. The company was short-lived because P ran out of money and he went away and then M went away. (With new money) we became National Concert Attractions. Then I met Allen Becker when the New Orleans Superdome opened in 1975
Have you been back to New Orleans since the devastation of Hurricane Katrina in 2005?
I have been back there. We played there a couple of times with Kenny. That’s the only times I’ve been back to New Orleans, honestly.
Was it painful to go back and see parts of a city where you grew up not there anymore?
What is painful is the politics of getting that city back on its feet. The devastation is just Mother Nature. The fact that it is taking so long for them to do, that’s what is devastating to me.
My heart’s not really in New Orleans anymore. When I left New Orleans in 1975, I left New Orleans. I still have family there but I left. I moved to Houston and didn’t look back. It’s hard to do business in New Orleans. I am pretty aggressive. People there go, “This is not how we do it here.” There is a charm about New Orleans in that it is sort of lost in time but there’s the frustration part too that it is lost in time.
Houston is a very aggressive city.
Totally. I owe everything to Houston. I came here broke. Allen Becker took a shot with me. This is where my roots are.
Coming into the AEG fold reunited you with many people you had worked with over the years.
Sure, John Meglen and Paul Gongaware (co-founders Concerts West) are dear friends. John worked with me at Pace, and we started Pace Touring. He bolted when SFX bought us. I’ve known (AEG CEO) Randy Phillips for a long time. (AEG president and CEO) Tim Leiweke is great. He reminds me of Allen Becker because he’s straight forward and honest. He let’s you be yourself. I have nothing but respect for everyone at AEG. It was a good place for me to be a part of because it is a privately-owned company. They allow me to do what I do.
You are pretty independent for an AEG company. You have a stand-alone company, really.
Basically, but it’s a good working relationship. I try to feed it as much as I can. If I can get acts to play AEG facilities I do. It’s a good working relationship.
You said that at Clear Channel there wasn’t synergy between divisions and promoters. Is there a synergy within AEG?
Yes, much more so than there was at Clear Channel. The one thing about (Live Nation CEO) Michael Rapino is that he has given back a little bit of the heart of the business there. Because Clear Channel did take the soul out of everybody. They really did. Everybody was going, “Why did we do this (sell our companies)?” The reason why was that we got a check. We all sort of sold our souls.
With consolidation, the bidding still goes on for top tours.
Oh, the bidding goes on ridiculously. It is over my head, I couldn’t do it. Even with somebody else’s money.
At what point do you say to the agents or the managers "enough" when the guy down the road says, “You won’t pay that? We will!”
You do say “Stop” and it doesn’t happen. Look at Nickelback. Here’s a band that didn’t sell a lot of tickets. I got involved and then they had a huge record (“All the Right Reasons” in 2005). They are talented and were ready to explode but, maybe, I had the foresight to see they were ready to explode. Everybody else thought, “Nickelback? That band can’t sell tickets.” We sold out across the country. Not once but twice. Then, when it was all said and done, the other guy (Live Nation) wrote them a big old check.
What I say now is that I only want to work with acts that want to work with me. Those acts that want to work with me, they will make more money because I share everything with them. There are no side bets.
Is there room in the market today for an independent concert promoter?
It would depend on what part of the pie they want to take. If they are trying to compete with Live Nation or AEG, there’s not a shot. If they are happy carving out a niche for themselves, and work really hard, keep their passion and maintain relationships with artists and managers, I think that someone can survive and have a great niche.
You turn 62 this year. Have you made any retirement plans?
Me? I love what I am doing. If George, Taylor or Kenny fire me then I guess I am done. But I love what do. I still have so much passion for this business. When I walk into an arena or stadium with those artists, when I see that George Strait smile or see Kenny’s smile or that Taylor Swift look or with Sugarland, and I see their fans, I am so proud of being a part of this. One day, I won’t be on the road as much but I love doing what I do.
Larry LeBlanc was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record. He has been quoted on music industry issues in hundreds of publications including Time, Forbes, the London Times and the New York Times.