The Promoter Game: looking at the state of play with the nation’s biggest

Worth some $1.2 billion annually, the Australian music market helps sustain almost 15,000 jobs, houses almost 4,000 live venues and sees fans spend more on music than they do on domestic holiday airfares, buying over 16.2 million concert tickets in 2012, the year in which we were ranked the sixth largest music market in the world.

While 2013 saw festival after festival fall onto the chopping block’s growing pile, the Australian concert industry flourished. The GFC recovery took leaps and bounds in the last financial year as punters happily coughed up an average of $85 to see acts like Taylor Swift, City and Colour and Beyonce. Although promoters and fans alike were flustered when acts like Pitbull, Kesha and The Darkness were forced to cancel tours due to low ticket sales, our concert business brought out so many international heavyweights that news the reprised New Kids On The Block couldn’t bank on Australia was a mere drop in an already glittered ocean.

2013 was the year of the global concert tour, with artists like Pink, who performed 46 sold out shows to over 600,000 fans Down Under, Justin Bieber, whose eight national dates contributed to his $69.9 million gross earnings, Rihanna, who grossed over $10.1 million in Australia alone, Beyonce, who finished 14 national dates while making finishing touches on her surprise visual album, and Bon Jovi, who sold out all 90 shows on their Because We Can world tour – grossing over $205.1 million in the process.

THE YEAR OF THE BIDDING WAR

With every worldwide tour stopping at Australia’s world class venues and subsequently escaping the financial mire infringing other markets, it’s no wonder 2013 sparked a few bidding wars between the country’s big four promoters. Increased risks and pressures due to the high demand from international acts wanting a piece of the pie lead to unnecessary inflating of fees for big name acts. One promoter who flatly refused to indulge in any one-upmanship, was Michael Chugg, Executive Chairman of Chugg Entertainment.

“We’re just not going to get involved in these stupid bidding wars that are going on,” he says down the phone from his Sydney office. “Basically all the international promoters based out of Melbourne are in these crazy bidding wars. They’re just paying far too much for these bands and they need 95% houses [almost sold out venues] to break even.

“We’re being careful. Every promoter knows that one of the hardest words to say – but one of the most necessary words right now – is ‘no’, and we’re getting pretty good at it.” Statistically, Chugg can comfortably avoid such battles. Chugg Entertainment made more than $85 million in the last financial year and sold over 900,000 tickets in 2012 alone.

Since leaving The Frontier Touring Company (which he started with Michael Gudinski and Phil Jacobsen in 1979) 13 years ago to forge his own legacy, Chugg has released a tell-all tome, started Chugg Music – his own management company and record label – and won the lifetime achievement award at the 2008 Arthur Awards in London. Billboard magazine also named him the fifth biggest concert promoter in the world right now.

Chugg looks upon his fellow promoter magnates to fix the issue. “[Michael] Coppel and Gudinski have a lot to answer for because the bidding wars are crazy and the money they’re paying some of these bands is just ridiculous.” Coppel’s trajectory may have been similar to Chugg’s at one point (with his self-titled promotion company) but when the world’s biggest live events company approached him in early 2012 in order to acquire Michael Coppel Presents, his decision to join Live Nation was an easy one.

“I’ve been a promoter for thirty odd years and it just struck me that the world’s becoming a lot smaller and you need to specialise. The great climb in a single territory was disappearing, so I think what we’re seeing is these global major players tying up as many of either the artists, or the venues, or the festivals, as they can so we may lead the trend.”

As President/CEO of Live Nation Australasia, Coppel may seem like the Michael with the biggest budget, but he assures us he’s never booked a tour on a whim. “Two promoters can look at an artist and have a different view of how successful that tour is likely to be,” he says down the phone from Melbourne. “If you’ve got any doubts you shouldn’t be doing it because you’re just doing it for the wrong reasons.”

Michael Gudinski AM, Founder of Mushroom Group and its flagship Frontier Touring, has had a banner year. From Bruce Springsteen, Leonard Cohen and Neil Young, to Taylor Swift and Muse, it may seem like a hard roster to top, but with another Springsteen tour kicking off next month and the Australian leg of The Rolling Stones’ 50th anniversary tour in March, the first quarter of 2014 easily eclipses his competitors in terms of international appeal. “Look, success breeds success,” the 61-year- old says over the phone from Los Angeles, “I believe that. Live Nation are a very, very important worldwide organisation and I think it’s important that some independents stand up and fight, and I think we’re revolutionising and changing – change is very important.

“Things move very quickly these days, so we’re trying to look at not having a formula – press button A then button B – with how we promote, and how we market. We try to be more original, and I think it’s made a big impact internationally, because we also do a lot of smaller acts, we don’t just sit back.”

Interestingly, when Gudinski first pitched for Springsteen 30-odd years ago, his management turned him down. Springsteen’s manager Jon Laudau brought it up with him last year, saying ”We always wanted to work with you but you seemed too wild at the time.” Gudinski, of course, took this as a compliment.

The rest of this article is in the Australian Music Industry Quarterly – out today. To read on, click here.