When worlds collide
In his bare, newly rented office, concert promoter Gregg Perloff stretched out on the carpet and flashed the grin of a middle-aged businessman who has just traded in his corporate cubicle for a small business dream. Nothing in his demeanor hinted that Perloff is, depending on whom you ask, either the leader of an industry mutiny or a man walking his career off the plank.
“Everybody in the business is watching, I know that,” Perloff said. “And that makes it all the more interesting.” Perloff was, until two weeks ago, a major figure in the massive empire of Clear Channel Communications Inc., which dominates the concert market with more than half of the nation’s ticket sales. Disenchanted with corporate strictures, Perloff stunned his employers by quitting and immediately launching an independent company. Far more shocking, just five days later he booked Bruce Springsteen for a show next Saturday at San Francisco’s Pacific Bell Park -- a high-profile coup that has infuriated his old bosses and roiled the concert world.
Perloff said that in the first 48 hours after he bolted he got more than 100 phone calls from musicians (among them Neil Young, Carlos Santana and Sammy Hagar), managers and agents, some offering support, others inquiring about business prospects. Some of that is a nod to the goodwill Perloff has engendered in a 28-year career that began as a protege to the colorful Bill Graham, the Bay Area rock promoter who became an iconic pioneer in his field, and saw Perloff eventually inherit the leadership of that empire. Some of it is also attributable to the malice toward Clear Channel, a company that its critics call impersonal and conservative -- to them, the antithesis of the late Graham’s style.
In the end, Perloff left Clear Channel because, to his mind, the company is bad for concerts -- it’s too distracted, too unwieldy, too unhip, too corporate for the core business of creating magic music moments like the golden days of his youth at the Fillmore or Winterland ballrooms. He said that more than a lack of charm, the monolithic state of the business now also stifles variety and risk-taking for fans. “I want to have fun again,” he said.
So far, it has not been all fun. “Clear Channel people are spreading the word that they want to make an example of us, to make sure no one else does what we did,” said Perloff, who was joined in his defection by Sherry Wasserman, another high-ranking Clear Channel executive in the Bay Area. Their new company, Another Planet, is the target of a lawsuit by their former employer, which claims that the Springsteen stadium show and other deals were arranged while the pair were still on the Clear Channel payroll. The suit filed in San Francisco Superior Court also claims that the pair tried to lure away staffers and is guilty of taking in-house trade secrets. The upstarts deny the accusations and say the corporate giant plans to smother their fledgling business in an expensive legal battle.
Lee A. Smith is Perloff’s replacement as head of concert booking for Clear Channel’s western region, a turf that is more or less everything in the U.S. west of Denver and stands as the most profitable concert sector. Smith concedes that the exits of Perloff and Wasserman created emotional upheaval for the local staff and that the Springsteen booking multiplied the anxieties. He dismisses, though, the suggestion that the lawsuit is a cudgel to kill off a competitor. “It is an attempt,” Smith said, “to right a wrong.”
Smith also said he believes his former colleagues could not have assembled the Springsteen show solely in the time after his departure.
“People were shocked. We all know that stadium shows take a great deal of effort and time and all of that. It’s pretty amazing to announce a show that soon after resigning from somewhere. ‘How did they do that?’ was the general reaction.”
Springsteen representatives did not return calls for this story. But Pat Gallagher, president of San Francisco Giants Enterprises, the entity that seeks non-baseball events for the stadium, said he tapped Another Planet for the late-developing show at the last minute and considered Perloff the “only choice” because this is “a relationship business, and we have a relationship that has shown Gregg and Sherry are the most capable of handling this.”
The defection of Perloff and Wasserman has a compelling historical subplot with the long shadow of Graham still extending over the Bay Area music scene. Graham was a tenacious maverick and true romantic when it came to the magic of live music, be it his Jefferson Airplane club bookings in the 1960s, the landmark tours by Bob Dylan and the Band he arranged in the 1970s or his labors at Live Aid in the 1980s. When Graham died in a helicopter crash in 1991, Perloff took over as president and Wasserman became the No. 3 executive at Bill Graham Presents.
In 1995, Perloff and Wasserman were among the 14 BGP executives (two of them Graham’s sons) who bought the company from their late leader’s estate for $5 million and also assumed its $20-million debt. Three years later, Wall Street financier Robert Sillerman, under the banner of SFX Entertainment, came to town with his $2-billion plan to create a national web of concert promoters and the BGP crew accepted his $68-million price to sell. But two years later a bigger fish came along: Clear Channel, a titan of the radio business based in San Antonio, bought up SFX and, with it, BGP.
A Bay Area spirit and Graham’s legacy made BGP different than the rest of the Clear Channel empire, though. It held on to its original name, for instance, a nod to the potency of the brand name and the lesson learned earlier by SFX, which created a local uproar by even suggesting the late promoter’s name be taken off the banner. Even with the looser rein, Perloff, Wasserman and other BGP old-timers chafed over all the policies they could not resist.
“The promoter’s entrepreneurial spirit, the spirit that keeps us driven to do what we do and to have the DNA to do what we do, is independent by nature,” Wasserman said. “That’s why you had all of these independent promoters prior to the roll-up of SFX and Clear Channel. The necessity of corporate uniformity -- which is what is demanded when you’re in a Wall Street company -- is at odds with the spirit of freely and independently making decisions and being responsible for those decisions. They have a different agenda than an independent promoter, which is where we all came from. It’s a cultural clash”
Those independent promoters around the country are watching the doings in Berkeley. Perloff signed a five-year contract with SFX, as did most of his indie industry peers, who sold during Sillerman’s buying spree. Perloff’s contract finished this year, and all over the country there are Clear Channel executives who may see inspiration in the Bay Area situation.
“It’s very big news,” said Irving Azoff, the Los Angeles-based manager of the Eagles and Christina Aguilera, and himself a veteran of the concert promotion business. “It feels like maybe there’s going to be a shift as guys look to go independent. There had been plenty of people saying they would be the one to do it, but it was Gregg and Sherry that actually did it. And I think they will do very well.”
Veteran singer-songwriter Jackson Browne said he hopes more independents follow the lead. “Clear Channel should worry. The pendulum swings both ways. They bought all of this up, the whole business, but what they bought is a mercurial thing. Rock ‘n’ roll is an expression of spirit, and that extends to the people in the business who aren’t artists.”
On Thursday, Another Planet won an early skirmish with Clear Channel when a San Francisco judge rejected the corporation’s motion for a temporary restraining order that would have tied up the proceeds from the Springsteen show, which would have been a bruising blow for the young company.
Also on Thursday, Perloff was visiting the office of San Francisco Mayor Willie Brown to talk about potential new business. The Bay Area loves the iconoclastic and bold, which is also why much of the city’s populace is still smirking over an elaborate vandalism campaign this week that targeted local Starbucks coffee shops.
Like Starbucks, Microsoft, Blockbuster and other corporate powers that enjoy market ubiquity, Clear Channel is “an easy target for potshots,” said Smith, Perloff’s replacement as BGP president and Clear Channel region chief.
“I know here, in the Bill Graham Presents area of influence, I think it is the case that it’s unfair criticism,” said Smith, who joined BGP in its independent days in the 1980s and was among the BGP leadership group that bought the company in 1995. “We all were doing the same job that we were doing before Bill died and after Bill died, and with much success. To sell the company and have it resold doesn’t mean we’re doing a worse job.”
Clear Channel, though, has struggled despite its colossal strength. The $4-billion cost of creating the empire and the approach of paying top dollar to lock up entire A-list tours has not led to the shining profit performance expected for the concert division, and the firm’s senior executives have conceded as much publicly. Also, U.S. Department of Justice officials confirm that Clear Channel is the subject of two separate antitrust investigations, one of them stemming from allegations that the corporate giant uses its vast radio holdings to exert unfair pressure during its concert dealings with labels and artists.
Smith said he, like Perloff, has reverence for the Graham name and legacy and he says that during his watch he will fight “homogenization” in the same fashion that his predecessor did. Smith inherits an impressive promotion machine, about a dozen exclusively operated venues (including a celebrated new amphitheater in Seattle and auditorium in Denver) and a firm grip on its turf.
Another Planet, meanwhile, has four employees, an office that fills with the sound of passing freight trains every hour or so and a mission statement that makes them sound like a Berkeley bohemian up against a Texas behemoth. “You’re going to see a small group of people committed to being a socially responsible company,” Perloff said. “People with desire, mania and passion to get back to the core business, which is producing concerts and different activities that recognize the importance of public assemblage and the socialization that goes on during live music events.”
Another Planet also has the hearts of some artists. Hagar, the former Van Halen singer, said Perloff should expect his challenge to the establishment to resonate with the rock spirit. “He’s got huge artist support even if it’s not going to be real public support. Clear Channel, they don’t have a relationship with anybody. I go to shows and I don’t know who the hell any of the people are promoting the show, not like before when in each town there was guy and a personality and relationship. That makes them vulnerable.”
Still, Hagar said Clear Channel is no flimsy foe, and Hagar predicts that sympathy won’t deter artists from taking the outsized paydays that Clear Channel has offered in the past. “They’re going to go after [Perloff], that’s the nature of the business. I think they’re probably going to make life miserable for him. And look, I have to take off my hat to them. You know, they put people out of business and they have hurt some people and made things different in a way I think is not great -- but, wow, as a businessman you have to respect what they’ve managed to do. At the moment, they still run the show.”