Where does Kathy Willard find the time? As CFO of the giantentertainment and e-commerce company Live Nation Entertainmentsince 2007, Willard has handled the financial details of multipledivestitures, spin-offs and more than 200 acquisitions, includingthe prized though contentious acquisition of Ticketmaster in 2010.She then pulled off a complex post-merger refinancing andintegration of two massive companies, forging a singular businessthat has no equal in the industry. Today, Willard manages anextraordinary global financial structure that supports more than11,000 venue clients like New York's Madison Square Garden forwhich Ticketmaster sells tickets, and supports the concert tours atthese venues that Live Nation secures for more than 2,000 artists,about 20,000 shows each year.

|

Willard is also in charge of the finances of the 128 venues thatLive Nation owns or operates as a concert promoter, such as theHouse of Blues franchise, the Fillmore brand and the HollywoodPalladium.

|

If only that was the extent of her job. She also must manage thefinancials related to the company's 250 contracted entertainers,such as the Eagles, Jimmy Buffett and Christina Aguilera. Thenthere are artists like Madonna, Jay-Z and U2 that Live Nation doesnot manage but holds long-term contracts with in relation to theirmusic properties. In the case of U2, the company signed a 12-yeardeal worth a reported $100 million to sponsor the band's concerts,control related merchandise and market other rights such as fansites and premium ticket packages.

|

Each of Live Nation's 11,000 venue clients requires its ownprofit and loss statement, and each has a box office, which meansoodles of cash that has to be accounted for and transported tohundreds of banks around the world. Just imagine 50 million peopleeach year lining up to buy tickets using a wide range ofcurrencies. On top of it all, Willard is in abusiness—entertainment—known for its outsized personalities. LiveNation's chairman is Irving Azoff, the personal manager of Aguileraand other artists before becoming CEO of Front Line Management andthen Ticketmaster. As the Wall Street Journal reported,Azoff “has long been known in the music industry for his shortfuse.”

|

He's also known for speaking his mind without necessarilyconferring with people back at the store. In June, for instance,Azoff and John Malone, chairman of Liberty Media, Live Nation'sbiggest shareholder, leaked to the press that they were thinkingabout taking the company private given the previous year's concertslump and the usual post-integration blues following a majormerger. But as Willard says, “Internally there have not been anyofficial talks about privatization.”

|

Certainly, this is not a job for the fainthearted. Asked whatshe does in her off hours, Willard, an executive known for herrazor wit, replies, “You mean I'm supposed to leave theoffice?”

|

In truth, she is married and has a yellow Labrador retrieverthat demands what little remains of her time once she gets home.The job does come with benefits beyond the usual, however—freetickets to enough concerts to deafen a teenager. Her personalfavorites are U2, Madonna, Paul McCartney and Adele, and sheconfesses a recent crush on country performer Jason Aldean, thecrooner behind “Dirt Road Anthem.”

|

Willard's own road to success began in 1998, when she joinedwhat was then SFX Entertainment, founded the previous year. It wasacquired in 2000 by Clear Channel, which rebranded it Clear ChannelEntertainment prior to spinning it off as a public company calledLive Nation in 2005. At the time, the music industry was in freefall as it transformed from a business in which artists made moneythrough sales of recordings to one in which concerts currentlyaccount for 80% of their earnings by Willard's estimate. Recordstores were closing across America as the public illegally sharedsongs or bought them for a dollar a pop online. Live Nation hadfound its niche.

|

Having lured major artists like Jay-Z away from theirlongstanding record labels in mega-million-dollar deals, theconcert promoter-slash-ticket seller is so unique that some artistslike Bruce Springsteen accuse it of being a near-monopoly. Thatdidn't stop the Department of Justice from approving the LiveNation-Ticketmaster merger in January 2010. After a year of twistsand turns, Justice gave the thumbs up, so long as Live Nationdivested Ticketmaster's Paciolan ticketing operation and licensedits ticketing software to its closest competitor, AEG.

|

After acquiring Ticketmaster, Live Nation emerged as the world'sevent-ticketing leader; one of the top five e-commerce sites on theplanet, with more than 26 million unique visitors each month; theNo. 1 artist management company; and the leading provider ofentertainment marketing solutions that enable more than 800advertisers to arrest the eyeballs of the more 200 millionconsumers that Live Nation delivers each year through its liveevent and digital platforms. Last year the Los Angeles-basedcompany reported $5.1 billion in revenues and a workforce of6,200.

|

Riding herd on this wide-ranging behemoth from a financestandpoint is Willard, assisted by “hundreds of accountants” aroundthe world, she says, all of them full-time, salaried positions. “Ina post-Sarbanes-Oxley world, we're fully compliant, but it doestake a lot of control processes to make it comfortable for me andMichael [Rapino, Live Nation's CEO] to sign off on the financials,”she acknowledges.

|

Indeed, there are no comparable companies Willard can use tobenchmark Live Nation's performance. “American Airlines at leasthas United to look at, but we have no one,” she explains. “So wemake sure we have more information in our hands than other publiccompanies might have, just to be sure we can be as clear aspossible. Fortunately, I took this job a long time ago and havegrown up with it.”

|

Of the more than 200 acquisitions whosefinancial aspects Willard has overseen since coming on board, nonewere like Ticketmaster. As soon as the deal was announced, angryfans, artists and politicians weighed in with stern opposition.“This merger would give a giant, new entity unrivaled power overconcert-goers and the prices they pay,” Sen. Charles Schumer(D-N.Y.) warned DealBook. “It must be viewed skeptically andscrutinized with a fine-toothed comb.”

|

Live Nation fired back, arguing that consumers would benefitbecause the combined entity would make it easier for ticket buyersto pick the seats they wanted online, thereby bypassing the“sticker shock” caused when ticket-handling fees are tacked on tothe admission price. In testimony before a Senate JudiciarySubcommittee, Azoff disputed allegations of antitrust violations.In this era of technological innovation, he argued thatTicketmaster confronted greater competition from new ticketingsoftware developed by the venues themselves to sidestepTicketmaster.

|

Live Nation had just tapped technology to create its ownticketing business. “We had a real need to know who our customerwas, and Ticketmaster, as our data provider, didn't share thatinformation,” Willard notes. “That's why in 2008 we decided tostart our own ticketing company, which we successfully launched thefollowing year. That opened the door to useful conversations withTicketmaster.”

|

Whether the merger would pass muster was a roll of the dice,with legal observers giving it a 50-50 chance of prevailing.Willard says the company didn't know until two weeks before theacquisition officially closed that it was a fait accompli. “Therewas a lot of frustration and pain, but once we had the green light,we closed the transaction in five days,” she says.

|

The fast close was a testament to Willard's copious duediligence in preparation. Each company's functional heads andsenior leaders were aligned with their counterparts to work throughthe details of what the combined company might look like. When thedeal was given the thumbs up, all the documentation was in placeand the integration moved forward without a hitch. “Planningaforethought made a huge difference,” Willard says, noting thatwithin nine months Ticketmaster was running on Live Nation's OracleERP system.

|

She makes it sound too easy. In fact, the companies were twovery different businesses with not much overlap. And this was avery, very big deal—the first major merger to come before the Obamaadministration, at a time when the president was under the gun forbailing out big financial institutions. In addition to the JusticeDepartment's review, the Securities and Exchange Commission put theproposed transaction under the microscope. “We knew since this wasa merger of equals that we would get a lot of SEC review,” Willardconcedes.

|

From a regulatory standpoint, one of the companies had to be theacquirer. “We put more disclosures in our filing than a routine SECfiling,” Willard says. “We were cutting new teeth getting them whatthey wanted, developing some very interesting matrices that we putin the merger document.”

|

It was a ton of work, accompanied by additional anxiety becauseneither Willard nor the CFO at Ticketmaster knew which one wouldfill the position once the deal closed.

|

CEO Rapino gives Willard high marks for navigating the financialshoals of the difficult merger. “Kathy was instrumental in guidingour global financial processes and contributing to our strategyduring a period of exceptional change and dramatic growth,” Rapinosays. “She was a pivotal part of the planning and ultimateintegration of our divisions following our merger withTicketmaster. It's safe to say that no other financial executivehas the depth of Kathy's experience and insight into the liveentertainment industry.”

|

Once the two companies were one, the combined organizationneeded to refinance both companies' debt obligations so it couldmake one public filing, rather than two. Willard worked with thecompany's bankers and finance group to make sure that they wereready to move forward when the time was right.

|

Live Nation entered into a new $1.2 billion credit facility toreplace the existing credit facilities, and also did a $250 millionprivate offering of eight-year notes. “It actually turned out to befortunate from a timing standpoint,” Willard says. “There was abouta one-week window where the market opened up and we could get theentire credit facility refinanced at a good rate.

|

“We combined the debt and were oversubscribed, in fact,” sheadds. “It was a huge win in terms of reducing the filingrequirements, and it also allowed us to consolidate for taxpurposes. Better to be lucky than good sometimes.”

|

Luck has nothing to do with it, says Colin Ryan, managingdirector in Goldman Sachs' San Francisco-based technology, mediaand telecom practice. Ryan assisted Willard with the Ticketmasteracquisition, the recent divestitures and refinancing, and even thespin-off back in 2005 that gave birth to Live Nation.

|

“She was a principal actor in that spin-off, which was a verycomplex transaction, involving the creation of a public company,”Ryan says. “From there, she pruned the portfolio, selling off thenon-core motor sports business and theater division, and went allthe way through the Ticketmaster merger, right in the thick of therecession. There couldn't have been a worse time to try to do adeal. Then, she pulled off a complex financing structure thatmanaged to keep both companies' capital structures intact. Theseare not easy things to do. Kathy is a very accomplished CFO. She'salso one smart cookie who is always up for having fun while in thetrenches.”

|

Willard often is asked to make decisions beyond the purview ofmost big-league CFOs. “We're a global company involved with theworld's greatest entertainers, so we get some unusual requests,”she says. “For instance, there might be a concert in a smallcountry and I'll get word that the king wants a handful oftickets—the best seats, of course. We have to ensure that we aregiving him tickets just because he's the king, and we are notreceiving cheaper police services in return, for example. Afterall, tickets are a commodity and have to be accounted for.”

|

Obviously, Willard loves what she does—why else take on so muchwork? “I was sitting back recently at the Rose Bowl with 96,000other people watching U2 perform,” she says. “I was there early andwas just amazed at how all these people came into the venue sosmoothly, sat down and then shared a communal experience. I hadsuch an appreciation for all the people I work with every day. Ithought, 'My company does this.'”

|

Not so bad, after all.

|

Read about Siemens CFO Joe Kaeser here
and EADS CFO Hans Peter Ring here.

|

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.