They’re Calling Almost Everyone’s Tune

“It’s tough to handle this fortune and fame.

Everybody’s so different; I haven’t changed.”

— Joe Walsh, “Life’s Been Good”

FOR a man who sits atop one of the most feared corporations in the music business, Irving Azoff seems surprisingly proud of his middle finger. Images of it, raised high and defiant, are hard to avoid in his home, a 12,000-square-foot mansion in one of the richest neighborhoods in this city.

There he is, the chairman of the newly merged Ticketmaster and Live Nation, staring from behind his digit of choice in a photograph on his stationery. And there he is again, grinning from the same vantage point in an image on a sweatshirt that he wears one afternoon when he offers a tour of his estate.

Somehow, when deployed by Mr. Azoff, this obscene gesture seems less a profanity than a very succinct statement of personal philosophy. At roughly 5-foot-3 and at the age of 62 — imagine an accountant who used to be a jockey — he has a teenager’s sense of humor and a rascally, triumphant style that has been the bane of his enemies and the delight of his allies for four decades.

“He who dies with the most toys wins,” read the front of a T-shirt that he once had made for employees of his artist management firm, which has handled acts like the Eagles, Steely Dan, and the Go-Gos. The back of the shirt read, “Irving wins!”

He has won often over the years, but his biggest victory might well have come on Jan. 25. That day, the Justice Department blessed a merger between Ticketmaster, the ticketing giant that Mr. Azoff has led since 2008, and Live Nation, the world’s largest concert promotion company.

Live Nation Entertainment, as the new company is called, is a colossus unlike anything the industry has ever seen. Ticketmaster has roughly 70 percent of the concert ticket market in the United States and is known for the ever-rising cost of an assortment of tacked-on fees, now as much a part of concert experience as sticky floors and shoving. Live Nation, led by Michael Rapino, 43, is a roll-up of regional promoters that now runs more than 22,000 events a year, many in the 127 amphitheaters and clubs that the company owns or operates. Total annual attendance is more than 50 million.

Then there’s the company’s not-so-secret weapon, Front Line Management, a consortium of artist management agencies that Mr. Azoff started cobbling together in 2005. Front Line shepherds the careers of roughly 200 marquee solo artists and bands, ranging in age from Miley Cyrus to Willie Nelson and including Van Halen, Neil Diamond, Christina Aguilera, Kid Rock, Maroon 5 and the Kings of Leon.

To say this new conglomerate has inspired fear in the live-concert business doesn’t capture the extent of the quaking. A coalition of consumer groups and independent promoters lobbied hard against the merger, warning that Live Nation Entertainment could quietly threaten venue owners by hinting that if they dropped Ticketmaster, they would have a hard time booking Live Nation tours or Front Line talent. The coalition also said the new company would have something close to a monopolist’s hand when it came to setting ticket fees.

“Now that it’s united with Ticketmaster, the sky will be the limit when it comes to fees,” says Sally Greenberg, executive director of the National Consumers League. “It’s not enough to say ‘If you don’t like the high prices, don’t go to the show.’ We need a concert market that has real and robust competition.”

In their first interviews since the merger was completed, Mr. Azoff and Mr. Rapino denied having much weight to throw around, saying that it’s established artists who are really in charge.

They say they are still trying to figure out new ways to generate revenue, and the two men acknowledged that if their companies weren’t allowed to merge, Live Nation in particular would have been in awful financial shape.

“There’s an old saying, ‘It’s easier to kill a business than to change,’ ” says Mr. Rapino, now Live Nation Entertainment’s C.E.O. “We wanted to make sure we got married before we spent four years too long saying, ‘God, we should have put these companies together.’ ”

That the Justice Department went along with this marriage surprised many who were expecting the Obama administration to pursue possible antitrust questions more aggressively and take the companies to court. But department officials contend that they extracted real concessions in a consent decree that prohibits an assortment of bullying tactics by the new company. The department also tried to gin up some competition in the ticketing market by, among other moves, forcing Ticketmaster to sell off a subsidiary called Paciolan in the hopes that it would become a serious competitor.

Maybe that will happen, but for now, Mr. Azoff is as close to a commissioner for live music as this country has ever had. And he occupies this job at a time when labels, as a force in the market, are withering and bands are making the bulk of their income from concerts. Which is to say, more power than ever is concentrated in the live-music side of the business, and the business of live music is more concentrated than ever.

Other executives in this industry have made greater fortunes, but Mr. Azoff is arguably the most powerful man in the history of pop music.

“This business has always had a lot of guys who wield a lot of decision-making power,” he says, in a tone that suggests he doesn’t have more influence than the music titans before him.

IRVING AZOFF has never broken through as that staple of pop culture, the nationally known mogul. But it is not for lack of charisma, money or a flair for the outlandish. On occasions when he has found a restaurant’s service slow, he has lit the menu on fire. He once had a gift-wrapped boa constrictor delivered to a manager whose wife he considered a bit treacherous.

The accompanying happy-birthday note said: “Now you have two of them!”

“My wife was involved in that one,” says Mr. Azoff, chuckling. “But it was a baby boa constrictor, in a cage. It actually was kind of a nice gift.”

In music circles, he’s been known as a savvy negotiator and a ferocious advocate for his artists, capable of sonorous shouting jags. “Let’s just say you had a ringing in your ears for a few days after he yelled at you,” says Dave Lucas, a former concert promoter now with Live-360, which consults with music venues. “You waited a while before you called back unless you wanted more.”

Mr. Azoff is also known for bending the truth when it suits his purposes or those of his clients, a propensity that long ago earned him the nickname Swerving Irving. He has been surprisingly honest about his penchant for dissembling — even saying so under oath, in a deposition in a lawsuit over the band Boston. After calling two music executives liars, he said, “Come to think of it, you can’t believe much of what I say, either.”

“That’s Irving,” says Don Engel, a lawyer who has worked both for and against Mr. Azoff. “His game is, ‘I say whatever I want, and if I change my mind, that’s the new truth.’ ”

It’s all part of the game, Mr. Azoff says: “Various jobs that I’ve had require me to stand behind the curtain and — what’s the word? — create an illusion. This is a business that requires different tactics at different times.”

One recent afternoon, Mr. Azoff was sitting in his office, recovering from strep throat. He was about to hit the phones for a few hours of the quick conversations and messages that consume most of his waking life. First, however, he wanted to listen to Ms. Aguilera’s newest single, “Not Myself Tonight,” which had just been uploaded to her Web site. It takes a minute or two to find the play button on the right Web page — Internet-proficient, the man is not — and suddenly the tune is blasting out of a pair of speakers at concert volume.

“It’s dance-y,” he yells over the din.

During this three-hour visit, Mr. Azoff is flip, funny and kind of cuddly, at least when he talks to his musician clients. His wife, Shelli, is home and visiting with a few friends, but the house is so large that we won’t cross paths. His 12-year-old son is in the backyard getting a tennis lesson. There’s also a guest cottage here that’s been turned into a gym and a separate building for a pool table and a Ping-Pong table.

His favorite toy, though, is a gleaming $110,000 black Tesla, an electric car he says is the fastest car he’s ever owned. (“And I’ve owned Ferraris. I’ve owned Porsches.”) He offers a demonstration and we inch down his driveway, past his koi pond, through a set of slowly opening gates. When Mr. Azoff reaches the street, he punches the accelerator, and the car lunges to about 70 m.p.h. in under four seconds.

“Need I say more?” he cackles, barely braking in time for a stop sign. “It’s insane!”

As he drives, he narrates a tour of the neighborhood. That’s David Geffen’s house, that’s where Lucille Ball lived, Michael Jackson died in a house over there. He points to land beside his. “This is an old widow, who’s 86 years old,” he says. “I’ve got an option to buy this when she kicks.”

Mr. Azoff is the last of a generation of rock entrepreneurs who started as young men in the early ’70s, when rock transitioned out of its hippie, anti-establishment phase and into its professional, stadium-tour era. Some of his contemporaries retired rich. Most were flattened by trends and competition they never saw coming. For those without the instincts of a survivor, this is an industry with few happy endings. Its nearest analog isn’t an industry at all; it’s politics. Alliances shift, backs are stabbed and most people have at least three agendas, only one of which they will discuss candidly.

Consider the saga of Ticketmaster and Live Nation.

IN the years before their courtship, these companies were on the verge of war.

For a long time, Live Nation had been Ticketmaster’s biggest customer: if you wanted a ticket to a Live Nation site, Ticketmaster sold it to you. But Mr. Rapino looked enviously at Ticketmaster’s balance sheet, which showed a steadier business with higher margins and less agita. Today, if you buy a ticket to a Lady Gaga concert, you’ll need to hand over a $2.50 “facility charge,” as well as a $15.45 “convenience charge” and $2.50 if you want to print your ticket at home.

Some of that money goes back to promoters as rebates — a practice that Ticketmaster pioneered — but Ticketmaster keeps most of it. So, in 2007, Live Nation told Ticketmaster that it would not renew its contract and began developing a ticketing platform of its own.

For a fleeting moment, it looked as if price competition was coming to the concert business.

But ticketing technology is notoriously tricky, and Live Nation’s ran into a rather infamous glitch in February 2009, when Phish fans briefly overwhelmed the system. Even so, Live Nation’s ticketing ambitions helped persuade Ticketmaster to merge, in part because Live Nation was starting to make overtures to venues with Ticketmaster clients. Ticketmaster had a choice: it could either merge with the company that had once provided about 15 percent of its revenue, or compete against it.

For Live Nation, there were plenty of reasons to join Ticketmaster. Live Nation was saddled with so much debt — about $800 million, much of it for maintaining venues and for upfront fees for artists — that Mr. Rapino worried about becoming a takeover target. In March 2009, its stock traded for less than $3 a share.

To Mr. Rapino, it was either an all-out battle, which could have devastated his company, or a merger he regards as win-win for everyone. Certainly, Live Nation Entertainment has benefited. When Ticketmaster and Live Nation announced the merger in February 2009, as Wall Street neared its bear-market low, they said the new company would be worth $816 million. It’s now worth $2.8 billion.

But Mr. Rapino says that fans and artists will come out ahead, too. His goal is to turn Ticketmaster’s Web site into live music’s answer to Amazon.com, allowing him to sell merchandise, fan club memberships and so on. “Now,” he says, “I’m not just a guy with the stage who puts on the show.”

Mr. Rapino is sipping a Fresca in Live Nation’s office in a sleek, modern building in Beverly Hills. He has a closely trimmed beard and black hair in what could be described as a mulletlike cut. He was raised in Thunder Bay, Ontario, and started his own promotion company after college, which was bought by Clear Channel Communications, the radio and concert giant. He went to work there and became known for assembling facts for snazzy presentations. He was also regarded as a ruthless infighter and a shameless, if slightly tin-eared, self-promoter.

On this particular afternoon, he has just come from a meeting with Dave Stewart, best known as the male half of the Eurythmics. Before Mr. Stewart leaves, he drops by Mr. Rapino’s office to say goodbye.

What was he doing there?

“When the Internet came about,” Mr. Stewart replies, “the artist realized, well hang on, you can’t steal a ticket for a seat, so we started to lean more toward, I don’t really want a record deal, I want to be aligned with somebody who can help me sell tickets. But then I want a company that can use that music and that seat to get ancillary revenues” — from things like food, beverages and sponsorships — “to help me survive.”

Mr. Rapino nods through all this. “He said it better than I can,” he says, sounding awed.

The relationship between Mr. Rapino and artists is complicated. On the one hand, he must be deferential and accommodating, because without a regular caravan of acts, he has nothing but empty seats and red ink. At the same time, some artists are exasperating, though Mr. Rapino is far too diplomatic to say so.

Instead, he’ll simply note that artists — at least the famous ones — are in a position these days to define their own destiny. And without question, that destiny includes higher ticket prices. The average price of a ticket to one of the top 100 tours soared to $62.57 last year from $25.81 in 1996, according to Pollstar, far outpacing inflation. The interesting question is why.

Mr. Rapino’s theory is that musicians are just benefiting from the same trends that have enriched other superstars, like athletes and actors.

“The ticket was underpriced 40 years ago,” he says.

Rival promoters see another culprit in high ticket prices: Live Nation. The company, they say, represents a consolidation of regional promoters that didn’t just coincide with rising ticket prices but also helped cause them. Ticket prices, in this telling, have gone up because the largest promoter has been paying whatever-it-takes sums to get bands in the door — both to drive out competitors and to bring in desperately needed revenue to cover fixed overhead costs and to fill up seats. The company’s biggest outlays include “360 deals” with Jay-Z, Madonna, U2 and others, giving the company a stake in tours, recording and merchandise profits in exchange for nine-figure paydays. Jay-Z’s deal was reportedly worth more than $150 million.

“Look at what has happened to ticket prices, and the price of everything else at a concert, over the last 10 years, right when consolidation was happening,” says John Scher, who books shows in Madison Square Garden, at Radio City Music Hall and elsewhere in New York. “I talk to college kids all the time and they tell me that going to a show at an arena or an amphitheater is just beyond what they can afford. And it’s because Live Nation has been paying the acts these outrageous sums, which is just alienating the fan base.”

Mr. Rapino denies overpaying for bands, and says that the price of tickets often triples when they’re sold by scalpers, which suggests that they were actually underpriced.

Then again, when Mr. Rapino was describing the parlous condition of the concert business in front of Congress last year, he noted that 40 percent of concert tickets go unsold, a statistic that he offered as a symptom of an industry in distress but that might just be evidence that Live Nation and its rivals don’t know how to price and sell their products. Today, as high as ticket prices are, Live Nation earns none of its profit from ticket revenue. The artists get nearly all of that. Live Nation’s earnings come from stuff sold on site, like beer, parking and advertising.

While there is plenty of argument about what combination of forces caused ticket prices to go up as Live Nation’s share of ticket money went down, there is a broad consensus about one of those forces.

The force is named Irving Azoff.

MR. AZOFF started by booking rock concerts in high school and later dropped out of the University of Illinois at Urbana-Champaign to work as an artist manager. The folk rocker Dan Fogelberg, whom he met in college, was his first client, and then came REO Speedwagon, an unknown at the time. Next was the future Eagles guitarist Joe Walsh.

“We met one night at the Whiskey a Go Go,” says Mr. Walsh, referring to a club on the Sunset Strip. Mr. Walsh says his solo career was in a rut, and he was broke. “So I said: ‘You can manage me. But first you have to help me trash this dressing room.’ And we threw everything everywhere.”

This was one of the secrets to Mr. Azoff’s career: He didn’t just join the juvenile behavior of his acts. He encouraged and led it. He started food fights on planes. He reveled in pranks. He assumed that there was no amount of mayhem that a few $100 bills couldn’t fix. When Mr. Walsh wanted a room that connected to Mr. Azoff’s and a hotel had none to offer, Mr. Azoff dispatched an underling to a hardware store to buy a chain saw, which Mr. Walsh used to cut a makeshift door.

“Then he bought me a case so I could bring the chain saw on the road,” Mr. Walsh says. “Just having a chain saw when you’re on the road, you can accomplish an awful lot. You don’t even need to start it.”

For all his frat-boy shenanigans, Mr. Azoff had a Doberman’s instincts about protecting his clients. Plenty of managers at the time became rich by keeping clients in the dark about their finances, arguing that mixing commerce and art was bad for the music. He did the opposite.

“Irving basically said, ‘I’ll bring you into the negotiation,’ ” says Cameron Crowe, who wrote a profile of Mr. Azoff for Rolling Stone and became a friend. “You’d go to his office and Dan Fogelberg would be sitting across from Irving, just watching the show.”

Mr. Azoff was part of the defiant counterculture but was fluent in the language of contracts and comfortable mixing it up in corporate suites. He also had great intuition about how to psychologically size up both foes and friends, and he could sweet-talk and charm as convincingly as he could erupt in rage.

“We met him in 1975 right when my partner Walter Becker and I had decided to give up touring,” says Donald Fagen of Steely Dan. “We expected him to say, ‘You guys have to tour if you expect a career.’ Instead, he said, ‘I’m going to triple your album sales without you touring.’ Maybe he kind of guessed at what we wanted to hear, which is a kind of business genius itself.”

But the place where Mr. Azoff’s style would have the widest and most lasting impact was on the road.

The concert business was regional at the time, and many promoters had rather creative ways of divvying up the spoils. Some would subtract fictional overhead costs from the band’s share — for replacing the hockey ice under the stage, for instance, even if the ice was intact through the entire show. In the movie “Almost Famous,” a slick new manager pitches his services to a band by asking, “Do you know to keep from getting charged for the ice below the floorboards at Chicago Stadium?”

That was an Irving Azoff line, says Mr. Crowe, who wrote and directed the movie.

“He’d come out of Urbana-Champaign with a knowledge of where the bodies were buried because he was a booking agent in his previous life, and he’d buried them,” Mr. Crowe says. “At the time, there was a lot of mystery about promoting concerts and a lot of promoters had a wonderful ride until Irving came to town.”

His expertise was determining exactly how much money the promoter stood to pocket from a show, always a closely guarded secret. He’d send an employee into the parking lot to count the number of cars paying parking fees. He’d call the food concession and ask for sales data. What he couldn’t sleuth out on his own, he would coax from one of the promoter’s underlings, who were often eager to curry favor with the great Irving Azoff.

“Every guy working at the lower level in this business dreams of moving up,” says Mr. Azoff, shrugging as though this particular idea didn’t take a genius.

He added up all the numbers and argued that when it came time to split the proceeds, this revenue should be considered, too. Why not? Without the talent, there were no fans to pay for food and parking. Knowing how much the promoter was earning on a given night, Mr. Azoff could ask for a larger cut of ticket revenue.

The promoters, he’d say, could keep the money earned at the venue, but in exchange they’d have to give Mr. Azoff and his acts a greater cut of ticket revenue than they typically handed over. Ninety percent, to be precise. It became known as “the Irving deal.”

THE Irving deal pinched the margins of every promoter. But none were pinched quite like those of an entrepreneur named Robert F. X. Sillerman, who began a buying spree of regional promoters in late 1996, ultimately spending more than $1 billion, most of it borrowed. How would Mr. Sillerman turn a profit? By selling more ads and sponsorships, he said. Great, replied Mr. Azoff. His bands will take 90 percent of that income.

“I said, ‘Of course you’re going to give me 90 percent of the money, Bob,’ ” says Mr. Azoff, remembering a contentious phone call. “‘That’s our standard split or we’re not going to play. How many people do you think will pay to see Robert Sillerman at the Boston Garden?”

This was posturing, to a degree — Mr. Azoff didn’t really expect 90 cents of every ad dollar. But he was reminding Mr. Sillerman of a simple principle. If a promoter was going to earn money from some new source, he’d have to share some of it with Mr. Azoff’s bands.

Ultimately, Mr. Sillerman didn’t even try to make his conglomeration, SFX, a viable long-term venture. Instead, in 2000, he sold the company to Clear Channel for $3.3 billion in stock and the assumption of $1.1 billion in SFX debt, a sum that seemed preposterously high to many in the industry. Five years later, as Clear Channel stock languished, the concert business was spun off — and Live Nation was born.

That same year, Mr. Azoff decided to “fight clout with clout,” as he puts it. He started consolidating management firms, reportedly with more than $100 million raised from sources including the Warner Music Group and a private equity firm, Thomas H. Lee Partners. Many of the management firms took a lump-sum check against a share of future profits.

“His pitch was, ‘Let’s create a big company that gives the artists a power base,’ ” says Clint Higham, a manager at Morris Artist Management in Nashville, whose clients include Kenny Chesney.

In 2008, Ticketmaster, which had owned a piece of Front Line, bought Warner Music’s minority stake for $123 million. As part of that deal, Mr. Azoff became the C.E.O. of both companies.

A year later, Mr. Azoff set aside his ambition to “fight clout with clout,” and Live Nation and Ticketmaster unveiled the mother of all music industry mergers.

THE Justice Department considered the merger, and negotiated with the parties, for just under a year. Ultimately, officials approved the deal after what they described as significant changes.

First, there is an attempt in the consent decree to jump-start two ticketing competitors — Paciolan, the aforementioned subsidiary, which was sold to Comcast; and the Anschutz Entertainment Group, which was granted the right to sell tickets using Ticketmaster’s technology for the next five years, in exchange for a royalty fee to Live Nation Entertainment. A.E.G., Live Nation’s closest rival in the promotion business, has the option after five years to build its own platform or buy Ticketmaster’s source code.

“Our hope is that there will be competitive choice for venues,” Christine Varney, the department’s antitrust chief, said in a phone interview. “Whether that’ll mean lower prices for fans, we’ll see, but we think that the more competitors there are in this field, the more likely it is that prices will go down.”

To many, the government’s effort to nurse a couple of Ticketmaster rivals into fighting shape seems a long shot at best. But the government also won from Live Nation Entertainment a promise that it would not engage in certain anticompetitive behavior. The company’s ticketing side, for instance, is barred from sharing data with the promotion side.

That reflects the worry of promoters with Ticketmaster contracts that the hugely valuable information collected through ticket sales — the e-mail addresses and the musical appetites of customers — will be quietly exploited by Live Nation. There are penalties for violating the consent decree that Ms. Varney described as $10,000 a ticket, but a lot of promoters worry that the company could break the rules and that nobody would know.

“There is supposed to be this Chinese wall at the company,” says Mitchell Frank, who books shows for a Los Angeles club, Echoplex. “But really, what is to stop them from mining all the data that I collect?”

If the merger presents so many potential hazards, why did the Justice Department approve it?

Several people familiar with the negotiations inside the department said that officials didn’t think they had much choice. According to Jim Hurwitz, a former Federal Trade Commission lawyer who wrote a paper for the American Antitrust Institute arguing against the merger, Live Nation told the government that it was going to exit the ticketing market no matter what happened with this deal and that it would enter an informal alliance with Ticketmaster if it wasn’t allowed to merge. On the other hand, if it was allowed to merge, the government could exert some control through a consent decree.

In other words, Mr. Hurwitz explained, the choice presented to the Justice Department was this: either let us get married and have a say in our union or try to stop us — in which case, we’re just going to start seriously dating. “My sense also is that Justice was worried about its prospects if it went to court, and it didn’t want to lose its first major case,” Mr. Hurwitz says.

Ms. Varney of the Justice Department has disputed that notion, saying that it would have litigated if it hadn’t won the concessions it wanted.

NOW that Live Nation Entertainment is a reality, how does it intend to grow? Mr. Azoff and Mr. Rapino are still coming up with answers. They want to improve Ticketmaster’s e-commerce site and look for ways to sell merchandise, fan club memberships and so forth to people buying tickets. The two executives talk about new pricing models and a better fan experience.

Potentially, these changes are revolutionary. For years, neither promoter nor ticketer has considered fans as the first priority. Ticketmaster’s most important clients are venue owners. The promoter, of course, worries foremost about the artist. If you’ve ever attended a concert and felt treated like an afterthought, now you know why.

But as Live Nation Entertainment tries to create this fan-friendly concert experience and improve its margins, it has tough trends to fight. The number of new bands with arena-packing power is dwindling. The company has made few inroads in hip-hop and rap. We live in a world of downloadable singles, but albums and artists’ repertoires are what traditionally sell big tours.

Then there is the problem that Mr. Azoff can blame only on himself. No matter what ideas Live Nation Entertainment conjures to generate more cash, artists are likely to demand part of the upside. They’ll want the Irving deal. And why wouldn’t they?

“We’ve squeezed every drop that there is to squeeze,” Mr. Azoff replies, using “we” to refer to artists and managers. “We’ve probably squeezed too much. But we’re not going backward,” and here the “we” switches to Live Nation Entertainment, “so with this merger we’re going to form new businesses through e-commerce so we don’t have to go to artists and say ‘We want to take back some ground.’ ”

When it comes time to negotiate the deals between artists and promoters, Mr. Azoff in many instances will have a seat on both sides of the table, a potential conflict of interest that he dismisses — because he’s been at this a long time, he says, and because everyone trusts him to do what it is fair for everyone.

Does that group include fans? We are about to find out. Much about the concert business is now an open question, but what’s clear is how much of the future resides in Mr. Azoff’s impish little hands.