Strategy

Will Spider-Man defeat Michael Cohl?

He reinvented the Stones and the music business. But can he save Broadway's costliest fiasco?

Update: On the evening of March 9th (after this story went to press), Michael Cohl and fellow producer Jeremiah J. Harris announced that Spider-Man ‘s opening would be delayed until early summer. The statement followed several days of meetings with Spider-Man ‘s stakeholders. While Cohl and Harris insisted that director Julie Taymor would remain part of the creative team, Philip William McKinley, a director of Broadway musicals and circuses with experience mounting productions in Las Vegas, has effectively replaced her. Playwright and former Spider-Man comic book writer Roberto Aguirre-Sacasa will rewrite parts of the show’s script, and Bono and The Edge plan to write two new songs.

In the winter of 2009, Sheldon Inwentash arrived at Caplansky’s Delicatessen in Toronto for a late Saturday lunch with friends. Walking through the deli’s usual weekend bustle, the CEO of resource venture firm Pinetree Capital spotted Bill Ballard, a fellow mining investor. Sitting at a corner table with Ballard was a bushybearded and bespectacled man dressed in a T-shirt and jeans. Those dining at nearby tables would have been surprised to learn that this greying hippie had helped to invent the modern global music industry.

Michael Cohl was visiting his hometown to pitch some business. As Inwentash tucked into a grilled salami on rye, Cohl talked about technology and music, his voice swelling with the zeal of a showman. But mostly he talked about talent, relishing the names as they rolled off his tongue: Bono. The Edge. Julie Taymor. Broadway.

Inwentash’s business is mines; he had never put a dime into theatre. And the project was clearly a salvage job. But Inwentash knew who was sitting across from him — the guy who’d shown the Rolling Stones how to make money by the hundreds of millions, who had invented the $200 concert ticket and first pinned a $400 price tag to a leather jacket adorned with a band logo. The guy who’s had the concert industry following his lead for 20 years. ‘I’m in,’ said Inwentash, and by the time he parted with Ballard and Cohl, he was on his way to a seven-figure investment in the biggest thing ever to sweep up the Great White Way: a high-tech spectacle called Spider-Man: Turn Off the Dark.

Two years later, Spider-Man is in the headlines for all the wrong reasons. ”Spider-Man’ isn’t just the talk of Broadway, it’s the punch line,’ declared The New York Times in February. ‘Pigs will fly before Spider-Man recoups $65 million costs,’ Bloomberg News announced early this month. In previews since the end of November, the most expensive musical in history has seen its opening delayed, and delayed again. Actors have been injured performing ambitious stunts, and mid-show accidents and technical hiccups have interrupted many performances.

Nobody involved has escaped media scorn. Critics blame composers Bono and the Edge of Irish rock band U2 for neglecting the show and writing sub-par songs. Taymor, the woman whose staging of The Lion King earned US$4 billion in box office, is accused of directorial hubris. But some of the sharpest barbs have been reserved for the show’s lead producer, Cohl. One of the most accomplished entertainment moguls Canada has ever minted, who saved the production when it was broke, he is now battling to get the show opening-ready before it collapses under the weight of its cost, or literally kills someone. Anonymous Broadway insiders claim he’s indulged the unrealistic whims of the musical’s creative talent instead of reining them in as a producer should. The cast and crew don’t trust him, they say. He’s a newcomer who doesn’t understand how Broadway works, and doesn’t care to learn.

Amid all that, Cohl is embroiled in a high-profile legal dispute with entertainment behemoth Live Nation after losing a bitter boardroom struggle with his former partners in the company. At stake is his chance to work one last time with the rock band that made his fortune and legend — the Rolling Stones — and a shot at what could be the biggest concert tour in history.

Cohl is not a man accustomed to failure, but he knows the measure of the challenge. ‘Broadway’s tough,’ he says on the phone between appointments at Times Square’s Foxwoods Theater. ‘This show’s tough. This is the most difficult, most complicated, most extraordinarily challenging thing that I have ever done. Ever, ever, ever.’

So why is he doing it?

Bono’s name flashed on Cohl’s cellphone in the middle of a dinner with partner Lori McGoran. It was August 2009 and the couple was in Spain with their four kids, just starting a long-planned three-week vacation celebrating their 30th anniversary. ‘He started telling me about all this trouble that Spider-Man was in,’ Cohl recalls, ‘and did I think I could come in and help, please.’ Cohl already had a modest stake in the US$30 million that original producers David Garfinkle and Tony Adams had raised for the show. The pair had secured the rights to the characters and gotten the big-name talent on board. Then the veteran Adams suddenly died, felled by a stroke during the very meeting at which the Edge signed his contract. The inexperienced Garfinkle was left at the tiller. Nearly four years later, the production remained in development and, Bono reported, was bankrupt.

Cohl wouldn’t ditch his family, but asked to be kept in the loop. When at vacation’s end Spidey still hadn’t found a saviour, Cohl flew to New York. It took the team two and a half months to figure out how to salvage the venture. A new budget was drawn up: in order to realize the grand creative vision, Cohl needed to find another US$35 million in the midst of a recession. ‘It was Bono and Edge and Julie Taymor,’ says Cohl when asked why he signed on. ‘How could you not want to work on that? They were in trouble, and I’ve had a great relationship with them. Of course I would try to help them out.’

But he had no idea where he’d get the money. ‘I just started calling people — people we know, people we don’t know,’ he says. ‘I heard from a majority that I was out of my mind, but they said it politely. ‘Wow, that’s a lot of money for a Broadway show.’ ‘Wow, has anyone ever spent that amount on a Broadway show?’ ‘Holy smokes, Michael, look at that budget!” Outsiders have estimated that Spider-Man will need to play to sold-out houses for four years to break even, though those close to the production contend it will take half that time.

By February 2010, Cohl had lined up the cash (including a significant new stake from his own bank account). His pitch centred on the show’s cutting-edge wire stunts and technology, the strength of the Spider-Man brand, and the calibre of the names involved. And it predicted a future beyond Broadway, when Spider-Man would play in arenas worldwide, less a traditional musical than an enormous concert tour — the territory Cohl knows best.

Toronto-born in 1948 to a middle-class family, young Cohl wasn’t much interested in academics. ‘But those things he was interested in, he was brilliant,’ says Harold Niman, a lawyer and longtime close friend. In math tournaments and as a provincial debate champion, Cohl was a fiendish competitor. As he told an interviewer in a 2006 documentary, ‘The one thing I had learned, I don’t know where it came from, was, whatever I did do, I had to win.’

After dropping out of York University, an 18-year-old Cohl and a friend opened a strip club in Ottawa called Pandora’s Box. But a friend’s $5,000 payday for putting on a Guess Who concert helped convince Cohl that a bigger opportunity lay in staging a different kind of entertainment. He borrowed money from every friend and relative he could tap to finance his entry into concert promotion, but his first show at Toronto’s Maple Leaf Gardens was such a dud that he didn’t have the money to pay the band’s fee. So a desperate Cohl convinced Gardens owner Harold Ballard, to whom he was a stranger, to loan him the $12,500 on the spot. ‘In the nicest way, what makes him unique is his absolute audacity,’ says Bob Ezrin, an award-winning record producer who’s been a close friend of Cohl’s since both were breaking into the business in Toronto. ‘He just doesn’t see obstacles to the ideas he has.’

Cohl was innovating almost from the start. He created a popular series of shows at the Gardens that bundled dinner with a package of bands, and used that to beat out bigger promoters for an exclusive contract with the venue. Forming Concert Promotions International with Harold Ballard’s son Bill, he figured out a way to make cross-Canada tours profitable for international acts by enlisting an alliance of regional promoters. He bought a merchandising company and, in 1983, won the merch contract for Michael Jackson’s global Thriller tour — then effectively took over the whole tour when its promoter ran into money trouble.

And CPI didn’t restrict itself to concerts. ‘We were in everything,’ says Ballard. ‘We were in boxing, we were in ballet, we were in magic shows. We did operas. If there was a nickel out there, we didn’t mind trying to find it.’ Handling a touring production of The King And I led to a theatrical division, and Cohl saw an opportunity to do Broadway theatre in the likes of Wichita, Kan., and Boise, Idaho. For cities that didn’t have theatres capable of accommodating Broadwaystyle productions, he made the shows suitable for arenas. And he placed the earliest bets on taking splashy musicals to distant markets like Alaska and Hawaii.

In July 1989, Cohl first made international headlines, and it was hard to say what was more stunning: that, after years of feuding, the Rolling Stones would tour the world to promote a new album; or that the man behind the deal was a relative unknown from Canada. Cohl, established by then as the country’s biggest concert promoter, had gone to the Stones with an unlikely proposition: he would guarantee the band US$40 million for 40 shows. At the time, that kind of money was unheard of. But Cohl didn’t plan to sell just tickets: he planned to sell travel and dinner packages, VIP seats, an incredible range of souvenir merchandise, not to mention film and TV rights, and marquee corporate sponsorships. And he and the band would put on such a spectacle, it would justify every dollar people spent.

The Stones’ Steel Wheels Tour became the top-grossing tour in music history, reinventing the concert industry and opening up the music business to new revenue streams. Cohl would shatter that record again and again over the next two decades. He promoted massive tours for U2, AC/DC, Pink Floyd and, several more times, the Stones, whom Cohl turned into the most bankable live-music act of all time. The band’s most recent jaunt under Cohl wrapped up in 2007, tallying a US$560-million gross. ‘He’s bitten off more than he can chew a number of times in his career,’ says Ezrin. ‘And he’d just find a way to make his mouth bigger.’

That Cohl was even available to work on Spider-Man was the result of a rare setback. In June 2008, he had abruptly resigned as chairman of entertainment giant Live Nation and CEO of its recently formed Live Nation Artists division. He had joined the company’s board in 2006 after selling it a controlling stake in CPI. The deal, for $10 million in cash and $120 million in stock, made him Live Nation’s largest shareholder, and allowed him to try to realize his newest vision for the music industry. With sales of recorded music withering, the hot idea among record labels was to sign artists to so-called 360 deals, where a company didn’t just release a band’s recordings, but promoted the concerts, sold the merchandise, and shared in profits from websites, fan clubs and film deals. In a way, such deals were an extrapolation of what Cohl had been doing for decades on the touring side.

But while most were experimenting with low-risk, low-cost 360 deals with young bands, Cohl was thinking bigger. The month after his appointment to the helm of Live Nation Artists, the company announced a 10-year, US$120-million 360-style agreement with Madonna. It was ‘a defining moment in music history,’ crowed Live Nation CEO Michael Rapino at the time, and heralded ‘a new business model for our industry.’

As the months passed, Live Nation kept spending: a US$100-million deal with U2, US$152 million for rapper Jay-Z. But as the bills added up, rumours hit the press of a power struggle between Cohl and Rapino. With Live Nation’s stock off more than 40% since inking the agreement with Madonna, Rapino wanted to slow down and assess the existing portfolio. Cohl was determined to press ahead and lock down more big-name acts. After months of feuding, Cohl, a famously ruthless and successful negotiator, was pushed out.

‘Before I went there, I told them that they would choke on [my plan], because the zeroes would get too big,’ Cohl now says. ‘And at the point that they choked on it, we’d part company. And of course that’s exactly what happened.’

But those close to him suggest the experience aff ected him more than he lets on. ‘Michael is not used to anything but success,’ says his pal Niman. ‘So this was a humbling experience for him. I think Michael took that stuff very personally. Who wouldn’t? When people he’d brought along in business appeared to have turned on him?’ Live Nation’s senior ranks are littered with Cohl’s former partners and proteges, among them Rapino, a one-time marketing executive with CPI partner Labatt’s, and Arthur Fogel, a former CPI president who now heads Live Nation’s global touring division.

The terms of his exit barred Cohl from competing against Live Nation in concert promotion, but he bought an exemption letting him work with a few artists — including the Rolling Stones, the deal’s ‘crown jewel.’ Then, this past October, Live Nation filed suit against Cohl for US$5.35 million, charging that he hadn’t paid what was owed for the non-compete exemption. Cohl responded in January, accusing the company of breaching the terms of the agreement by making a play for the Stones’ business, and of actively trying to undermine his relationship with the band, which is widely believed to be considering a 50th-anniversary tour for 2012. It was yet another blow. ‘I think it was sobering and gave him a reason to reset and rethink,’ says Ezrin, who had joined Cohl at Live Nation. ‘And by the nature of the deal he had to make, it forced him into exploring other avenues of interest — which led him directly into Spider-Man.’

As Canadian Business went to press, a new round of speculation suggested that Spider-Man’s opening night would be delayed yet again, from March 15 to some time in the summer, giving the cast and crew time to rework parts of the show. Sources close to the production team confi rmed that two days of meetings would likely produce an announcement to that eff ect before this article’s publication.

But as the show limps on, and rumours swirl that the whole US$65-million fiasco may simply go down the drain, the people who have put money into Spidey still believe in Cohl’s ability to save it. ‘To tell you the truth, this was as much as anything an investment in Michael Cohl,’ says Vancouver venture capitalist Gregg Sedun, a first-time bettor on theatre. Sugar Rautbord, a Chicago socialite, author and an early investor, says, ‘He seems to be an individual very used to making money out of chaos.’ James L. Nederlander, president of American theatre’s storied Nederlander Organization, adds, ‘I’ve known Michael for 20 years, and if there’s anybody capable of pulling a rabbit out of the hat, it’s him.’

Despite the frustration, the 63-year-old Cohl is back where he wants to be: with artists he believes in, at the centre of a project that conventional wisdom says can never work. ‘I get up in the morning and I’m aggravated and emboldened, and I’m depressed and I’m excited, and I’m all the things that you get from being involved in a show like this,’ he says. ‘But I am never bored.’

‘He’s a showman,’ points out Ezrin. ‘And when you have that in your blood, it’s the fuel you run on. He loves to look out from backstage and see a big audience full of people with their hands waving. Nothing makes him happier.’