The New York Times-20080125-Live Nation Finds a Buyer For Its Theater Business

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Live Nation Finds a Buyer For Its Theater Business

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After almost a year of fielding bids, Live Nation has sold most of its North American theater business, including the Broadway Across America touring network, to Key Brand Entertainment, a company owned by a British producer and run by an American entertainment executive.

The deal, completed on Wednesday, also includes eight theaters that Live Nation leased or managed in Minneapolis, Boston, Baltimore and Toronto, as well as the Canadian arm of the touring business. The touring network includes agreements to market and produce shows at more than 40 theaters across North America. The sale price was $90.4 million.

The sale does not include everything that Live Nation initially put on the table: its share of the Chicago market, for example, was sold to its partner, the Nederlander Organization, for $60 million in November. But the purchase did not come with the more than $150 million price tag that was originally being batted around.

Now comes the hard part for the buyers: John Gore, 45, a British producer who has put up several successful West End shows and invested in Andrew Lloyd Webber productions; and Thomas B. McGrath, 51, a former vice president of the Viacom Entertainment Group who is the founder of a financial firm that specializes in acquiring and investing in entertainment businesses. (Dancap Productions will manage the Canadian properties for Key Brand.)

The road business in North America has been patchy in recent years and problematic for Live Nation's theatrical division in particular. Presenters involved with the network since long before it was acquired by Clear Channel in 2000 (it was spun off as its own company in 2005) have been pulling out recently, prompted in part by a feeling that the theatrical business was an afterthought for a company more focused on concerts.

As long as that happens, you're likely to have disaffection with your partners, Mr. McGrath said in a phone interview.

As for road business in general, Mr. McGrath said the main issue was a lack of saleable shows. Blockbusters like Wicked and Mamma Mia! have consistently reported high ticket sales, but midsize shows have not had much to brag about. That can be changed, Mr. Gore said, by more skillfully marketing the shows that were not necessarily big hits on Broadway.

Mr. Gore said he also wanted to rejuvenate the division's producing arm so that the network would not be entirely dependent on other peoples' shows.

It has just been shelf space, Wal-Mart, he said of Live Nation's recent programming. Key Brand is currently investing in more than 10 shows, either on Broadway or in development, he said. But he said he also wanted to produce shows from the ground up.

Really we want to start workshop level, Mr. Gore said. Asked if the new shows would reflect those on his producing resume, which includes stage versions of Star Trek and the mid-1960s British television show Thunderbirds, Mr. Gore said those are just things I've had fun with in the past. The dream is to find the next great American musical.

[Illustration]PHOTO: John Gore, a British producer, is one of the buyers of Live Nation's theater business. (PHOTOGRAPH BY BARLOW-HARTMAN)