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Will Kwatinetz and Azoff Team Up for Supermanagement Company?

Green Day's Idiot Win

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Reprinted with permission from Hits Magazine

September 28, 2004

Jeff Kwatinetz is at it again, and this time he's dancing with Irving Azoff. Sources inside both companies confirm that talks are ongoing to join their music management companies under one roof.

Plans are for Azoff to head the company, overseeing a combined roster that includes Linkin Park, Korn, Dixie Chicks, Enrique Iglesias, Audioslave, Limp Bizkit, Snoop Dog, Christina Aguilera, Jewel, Van Halen and the Eagles, among others.

The money men were reportedly up in Boston at Thomas H. Lee Partners, trying to hammer out a business model that would give the deal the proper economics. Kwatinetz had previously huddled with Lee and company about acquiring Warner Music Group before Edgar Bronfman Jr. entered the picture. Questioners questioning whether the financiers would entertain the possibility of rolling this new management entity into their reported plans to take WMG public. Kwatinetz also reportedly made a play for MGM's film library earlier this year, though it ended up going to Sony.

Back in 2000, entertainment moguls Robert Sillerman and Haim Saban separately considered a play to consolidate the music management business, though, as a service industry that doesn't deal in hard assets, but personalities, it never happened. Sillerman actually acquired 16% of The Firm for a reported $25 million as part of a $200 million deal to acquire the company in Nov. 2000 and fold it into his planned FXM super management entity. He ended up being sued by Kwatinetz for breach of contract and fraud to the tune of $1 billion, when he was forced out of the deal because of his non-compete clause with Clear Channel after selling them SFX. An out-of-court settlement was eventually reached, with Kwatinetz buying back the 16% of the company acquired by Sillerman for substantially less than he sold it for.

At the time, Sillerman was reportedly offering management companies six-to-eight times annual earnings, which was considered high for a service business. The other issue was the personal nature of management, and how binding artists' contracts would be if their personal service representatives were to leave.

Rumor has it, if the deal happens, Irving will try to bring ex-colleague Howard Kaufman's HK into the fold, with a roster which includes Aerosmith, Jimmy Buffett, Lenny Kravitz, Chris Isaak and Fleetwood Mac, among others? Meanwhile, another possible target is Allen Shapiro's Mosaic Media Group. In 1999, Shapiro acquired Atlas/Third Rail Management's Pat Magnarella, Scott Welch and Charles Roven, with an artist roster that included Green Day, Alanis Morissette and Goo Goo Dolls, to his company, which repped Jim Carrey, the Wayans, Jon Stewart and Will Ferrell, among others, at the time.

Kwatinetz originally started The Firm in 1997 after ankling Gallin-Morey and Associates with Mike Green, Peter Katsis, Gayle Boulware, two assistants, Korn and actor Martin Lawrence, in a Malibu condo. Kwatinetz acquired Ovitz's AMG in May, 2002, adding partners Rick Yorn and Julie Silverman-Yorn, and a client roster that included Cameron Diaz, Samuel L. Jackson, Leonardo DiCaprio, Vin Diesel and Martin Scorsese, among others. He brought on music managers Andy Gould and Rob McDermott (Linkin Park), Simon Renshaw (Dixie Chicks) and Jeff Rabhan (Michelle Branch). The Firm recently added Anastacia, Clay Aiken and Weezer to its roster. Last March, Kwatinetz linked up with ex-Disney TV and Comcast C3 Chairman Rich Frank's Integrated Entertainment Partners, naming him to the newly created post of The Firm's Chairman.


HITS magazine is the most powerful information vehicle in the music industry, and is read religiously by all the top executives and everyone else.




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Reprinted with permission from Hits Magazine

September 28, 2004

Holy dookie! Green Day's back on top of the charts.

The band's new Reprise album, American Idiot, a punk opera no less, climbs to #1 this week on the HITS Top 50, with more than 270k in sales. Their last studio album, Warning, entered at #2 back in Oct. 2000, with 170k in first-week sales.

Said Launch Head of Label Relations Jay Frank, after denying his informal Internet findings show Ralph Nader leading the presidential race, commented: "Green Day debuting at #1 is an affirmation of the wide appeal this band still has. Launch's "Artist of the Month" promotion with the band has been viewed by everyone from pre-teens to their parents and beyond and has made it one of our most successful promotions this year."

Capitol Nashville country hunk Keith Urban (#3) and Epic rockers Chevelle (#6) are the other Top 10 newcomers.

The rest of the Top 10 includes Fo' Reel/Universal holdover Nelly (with Suit at #2, Sweat at #4), Curb's Tim McGraw (#5), Concord's Ray Charles (#7), UTV's Now Vol. 16 (#8), Geffen's Ashlee Simpson (#9) and Octone/J/RMG's Maroon 5 (#10).

Other chart bows are registered by Century Media metallers Shadows Fall (#16), Geffen's John Fogerty (#22), Geffen's Shark Tale soundtrack (#40) and Lost Highway/IDJ's Elvis Costello (#46).

Cash Money/Universal's Lil' Wayne leads the week-to-week gainers with an 8% rise (#46-43), followed by Geffen's Guns N' Roses (#28), Capitol's Yellowcard (#29) and Columbia/CRG's Switchfoot (#33), all up 6%. Island/IDJ's The Killers (#26) rises 5%, while RCA/RMG's Velvet Revolver (#27) and J Records/RMG's Alicia Keys (#32) are both up 2%.

Next week, a slew of new releases will be headed up by Lyric Street's country-rockers Rascal Flatts and Hollywood's teenpop idol Hilary Duff, with Reprise's The Used, Rawkus rapper Talib Kweli, Matador's indie darlings Interpol, Nonesuch's Brian Wilson SmiLE album and S-Curve's Joss Stone, all looking to debut in the Top 50.


HITS magazine is the most powerful information vehicle in the music industry, and is read religiously by all the top executives and everyone else.




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By Kenny Kerner

Sony-BMG will fire more than 3500 employees internationally in a cost cutting effort designed to save the company in excess of $350 million dollars. Company executives (those who remain) say this plan will play out through 2005.

Megadeth members Dave Mustaine and bassist Dave Ellefson are counter suing each other... Columbia has signed Avion and will release their self titled CD project in late October. Avion came to the label's attention by propelling their single, "Seven Days without You" onto the Billboard Adult Top 40 chart without a major label.

The BDS (Broadcast Data Systems) Awards were recently made public and the winners with the most spins (radio plays) were "Fallin'" by Alicia Keys and "Hero/Heroe" by Enrique Iglesias, each with 500,000 spins. "Headstrong" by Trapt and "Yeah" by Usher both had 400,000 spins and nine others shared third place, each with 300,000.

Caroline Distribution is celebrating its 21st year as one of the major independent distribution companies in the industry...Country trio Malibu Storm is getting some powerful airplay thanks to their cover of the classic Def Leppard tune "Photograph."... Madonna's current Reinvention tour recently sold out six performances at New York's Madison Square Garden.

The 2004 Billboard Music Awards are set for December 8th at the MGM Grand Garden Arena in Las Vegas. The show will be broadcast on Fox TV... Look for Tim McGraw's 9th CD for Curb Records, Live Like You Were Dyin' to be one of his strongest sellers ever, with "Back When" as his next #1 single.

American Idol winner Fantasia remained in the Number One slot on the Billboard Hot 100 Singles Sales charts for nine consecutive weeks with "I Believe" on J Records. That record ties Clay Aiken's "Solitaire" for second place. The only other Idol artist to remain in that position longer was—Clay Aiken himself with "This is the Night" which spent 11 weeks in the penthouse. So much for Idol chatter!


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