He may be a relative newcomer to the music business — but with significant stakes in a portfolio of its biggest companies, Maffei has become a power that major labels and indies alike can’t ignore.
Across the huge video screen spanning the stage at Manhattan’s TimesCenter, a ragtag rock band strides in slow-mo: white-haired singer in a T-shirt, tight jeans, smoky eye makeup and Freddie Mercury mustache; guitarist in black leather pants; another guitarist in a cowboy hat too big for his head; and a guy in a black jumpsuit and gold chains whose role is unclear. They perform what sounds like a famous Queen song, then sit down for interviews.
But something’s not quite right about this installment of Behind the Music. For one, the singer is way off-key; for another, the song is called “Capitalist Rhapsody,” with the usual “Galileo!” chorus changed to “Oh Rapino! Oh Rapino!” This is not some scrappy band of rock’n’rollers — it’s a parody video by the brain trust of a cable giant that’s gradually and quietly preparing to dominate the music business: Greg Maffei, the 59-year-old president/CEO of Liberty Media; Courtnee Chun, Liberty’s chief portfolio officer and senior vp investor relations; Mark Carleton, a senior adviser; and Albert Rosenthaler, chief corporate development officer. And this is no episode of some backstage drama music show: It’s Liberty’s much anticipated Investor Day, where Maffei’s team annually rolls out a central parody skit, usually riffing on music, and the crowd takes a break from checking stocks on laptops to applaud politely.
Once Maffei and crew have finished their shenanigans, it’s up to Michael Rapino, president/CEO of Live Nation — the dominant concert promoter, of which Liberty owns 33% — to steer things back to business. “I’m going to take all that rebellious energy and pack it into a blue suit and 14 boring slides,” he dryly tells the crowd. “That seems to be what we do up here.” Rapino has appeared in Investor Day skits before, noticeably cringing a few years ago while clinking a cowbell as Maffei and company riffed on Will Ferrell’s “(Don’t Fear) The Reaper” skit from Saturday Night Live. (He declined to comment for this story.)
Unlike Rapino, Maffei is a music industry outsider. He did not start his career as a DJ, he never produced a concert in college, and his tastes run middle-of-the-road boomer — John Mayer, Dead & Company, Billy Joel. He’s a Republican, a longtime John McCain supporter who donated to President Donald Trump’s 2017 inauguration but who also has donated to Democratic candidates in his home state of Colorado. For years, the industry has regarded him as a sort of cowtown curiosity, a brilliant investor with an unlimited checkbook who buys damaged properties like SiriusXM (Liberty owns 71%), Live Nation, Pandora (now fully owned by Sirius) and iHeartMedia (5%), then turns them around. He has a goofy, dad-joke sense of humor and seems genuinely tickled to take his turn at playing a rock star. Maffei has set up Investor Day as a kind of “Woodstock for media investors,” as Christopher J. Marangi, Gabelli Funds’ co-chief information officer, puts it.
“Look, I’m a suit; let’s be real,” says Maffei a few months ahead of Investor Day, wearing his more standard uniform of a blue button-down at his Englewood, Colo., office. “We try to show some amusement value.”
But his Investor Day focus on rock’n’roll wasn’t just a joke. In 2020, Maffei is poised to steer Liberty into far greater influence in the music business. In a speech that same morning in late November, he made a case for audio — not video — as “a more attractive space where we are spending our time and dollars.” Less than a month later, The Wall Street Journal reported that Liberty asked the U.S. Department of Justice to approve an expansion of its 5% investment in broadcast giant iHeartMedia into a controlling stake — and a dominant position in concerts, broadcast radio and SiriusXM to go with its own streaming service, Pandora.
Soon enough, Maffei’s outsider approach could put him at the center of the music business. With a controlling stake in iHeart (which is not a sure thing: the DOJ reportedly has antitrust concerns about one company owning the dominant AM-FM and satellite radio broadcasters), Liberty might be able to play concerts, streaming and satellite/broadcast radio off one another, plus smaller divisions like its QVC-owned Katy Perry footwear line. Allen Kovac, manager of Mötley Crüe and head of indie label Eleven Seven, envisions a Liberty “dashboard” in which customers stream via Pandora and buy tickets through Live Nation. “It’s going to take a little while to perfect, but it will be one of the single best things that happened in the music business since Spotify,” he says. New York promoter John Scher sees echoes of the late Robert Sillerman’s early-2000s SFX rollup of promoters, venues and radio in which stations promote concerts. Jerry Mickelson, president/CEO of Chicago promoter Jam Productions, agrees and adds: “Sillerman was flying by the seat of his pants, but Liberty’s much smarter.”
Maffei only hints at the possibilities for vertical integration among these divisions. “Thank you for the credit that we’ve got a great master plan,” he says. “I don’t think it’s been quite that well thought out. We’ll see if there are things where they can touch each other.” A Dartmouth College-educated, Harvard Business School-trained dealmaker, he argues that unlike those entrenched in the music business, he has an uncluttered way of looking at things; he saw the potential in a Sirius-Pandora merger, then talked longtime Sirius CEO Jim Meyer into the idea. “A lot of times, businesses are very much focused on ‘How do I get from here to there?’ ” he adds. “I’m a little less held to that standard of ‘What do I have to do this quarter?’ ”
So why not stack Live Nation in the same division as Formula One racing so, as Maffei (vaguely) put it during Investor Day, “synergistic things can happen”? Why not consider merging content (Howard Stern’s Sirius show, iHeartRadio podcasts) with distribution (Pandora streaming, iHeart’s 850 broadcast stations), similar to what Netflix and Disney are doing? Why not add a controlling iHeart stake so Liberty could, if it wants to take full advantage of its holdings, broadcast Live Nation concerts to radio listeners everywhere?
Regardless of how Liberty uses its music properties in tandem, owning large stakes of Live Nation, Ticketmaster, iHeartMedia, SiriusXM and Pandora could well give the company a key competitive advantage: user data. “This is what Netflix has been so great at,” notes Josh Hill, a Minneapolis investor in Liberty. “They use that data to see what’s popular, to invest in content, to make the platform more popular — which makes it worth more money.”
Maffei won’t offer details on how Liberty might use that information, but he is clearly bullish on the music business as a whole — and ready to take advantage however he can. “You’re absolutely seeing a renaissance,” he says. “Technology threatened the traditional record business, but it now has also created new business models. Nobody was buying a new album from the 1980s — now they’re maybe listening to something from the ’80s that I’m getting paid for in a way that I wasn’t before. That’s huge.” On Investor Day, he told CNBC that “the good news for us is we are a serious player in audio.” And soon, Liberty may get much more serious.
Peggy Johnson vividly remembers her first Live Nation board of directors meeting back in 2013. Then executive vp of Qualcomm Technologies, Johnson, a self-proclaimed introvert, found a room “full of Type A entertainment and finance individuals.” She quietly explained to Maffei, who had invited her onto the board, that she preferred to work in small groups. “He didn’t try and turn me into one of them,” recalls Johnson, now Microsoft executive vp business development. “He allowed me to be just who I was.”
Maffei has a way of putting people at ease. When I first met him several months ago at Liberty’s headquarters outside Denver — a three-story brick-and-cement building that looks like a castle — he calmly reassured me when a plane from the nearby airport appeared headed directly for the window of the room we sat in. “The only time it drives you crazy is when the F-16s land,” he said. “They’re like three times as loud as any other plane that comes through here.” At Investor Day, when an analyst wondered whether Google could drive other streaming companies out of business, Maffei was similarly soothing, saying: “That’s a fairly dystopian view of the future, my friend.”
When it comes to music, Maffei acknowledges his experience is limited. He played trombone and piano as a kid and occasionally attends concerts with newish music biz friends like Rapino, Meyer, Maverick’s Guy Oseary and Irving Azoff. He considered journalism before landing early on at investment bank Dillon Read, where, the Journal reported, he engineered a refrigerator-company sale to Citicorp. He took over Citibank’s Pay ‘N Pak Stores and liquidated them in a year-and-a-half. Such moves brought him to the attention of then-Microsoft treasurer Mike Brown, who hired him as director of business development and investments in 1993.
“He could lead by teaching,” says the retired Brown. “If he gets on a wrong track for a few minutes, he doesn’t have trouble admitting that. Bill Gates was like that. He doesn’t need all the oxygen in the room.” Maffei’s wheeling and dealing intensified at Microsoft, where he steered the company into a $1 billion Comcast stake and helped create the Microsoft-NBC joint venture MSNBC. Later, he was co-president/CFO of Larry Ellison’s Oracle. “If I have a talent,” says Maffei, “it’s a lot of intellectual curiosity about different things and a reasonable ability to juggle balls.”
That intensity isn’t limited to the office. Living in Colorado, he used to ski 20 nights every season. (His four kids — two in their early 20s and teenage twins — used to race.) “I don’t see him taking a nap,” says John Hickenlooper, the former Colorado governor and U.S. Senate candidate — and longtime Maffei drinking buddy — whose wife, Robin, is Liberty’s vp corporate development. “When I was governor, I’d call him up sometimes and ask his advice, and all of a sudden, he’d be shouting into the phone: ‘That’s not a foul! That was a terrible call!’ And he’d be pacing the sidelines of one of his children’s sporting events.”
Even at home, Maffei can’t resist some competitive ribbing. His sons — the oldest is in finance, and the twins are mostly into soccer and hip-hop — like to tease him when he asks about whatever new rapper they might be streaming: “Daddy, isn’t that Billy Joel?” On one recent evening, Maffei finally had his revenge. When one of the 16-year-olds was listening to an old rock’n’roll tune, Maffei appeared out of nowhere with a characteristic quip. “You can’t believe the counter-rip I got to give him,” he recalls. “ ‘You know that’s Billy Joel, right?’ ”
That competitive spirit is usually lighthearted in intent, but it sometimes rubs music business colleagues the wrong way. “He is a sort of combative-bully type of a person,” says a senior music industry executive who knows him well. “It’s a business strategy that has worked well for him. People are afraid of him because he can extract revenge in many ways because of all the different businesses that he controls.” With a controlling iHeart stake potentially in Liberty’s mix, this tendency is, to some, worrying. “Any company that gets too big and controls too much wipes out competition to a large degree,” says Scher, who, as an indie promoter, regularly battles Live Nation for shows. “It’s hard competing against them, and if they have the extra clout of having radio support in markets that I promote, it’s going to make it even more difficult to break through.”
Maffei exhibited what Ted Kalo of the Artist Rights Alliance calls a “pugilistic chief executive” personality in late 2018. Although the Music Modernization Act received widespread music business support, it ran counter to SiriusXM’s interests — Meyer wrote in Billboard that Sirius shouldn’t pay royalties for pre-1972 songs when AM and FM stations didn’t have to. A pro-MMA group accused Maffei of anti-artist lobbying, sending a truck around Washington, D.C., displaying his photo, as well as his $20.2 million annual salary and the message, “WHAT HE WANTS TO PAY ELDERLY ARTISTS: $0.”
Billion-dollar-company CEOs rarely respond to their enemies on social media, but Maffei tweeted: “When your opponents are wrong, they usually take the low road.” (He needled his social media critic even further at Investor Day, changing a “Bohemian Rhapsody” lyric to “Oh my Twitter, oh my Twitter, oh my Twitter has a foe!”) “It was something that Jim Meyer at Sirius had to go sort of clean up,” says the executive who knows Maffei well. “He had the whole industry lining up against him.”
In 2009, Liberty bought 40% of SiriusXM, which was then struggling to avoid bankruptcy. It was one of Maffei’s earliest deals as Liberty CEO, one which ushered the cable giant (owned by Colorado billionaire John Malone) into the music business and road-tested his idea of combining content and distribution, like Netflix and Disney+ do today. By 2018, he had declared an interest in buying a large stake in Universal Music Group. Maffei calls Vincent Bolloré, whose family controls much of the board of UMG parent Vivendi, a “very impressive” and “very cagey guy.” He couldn’t talk him into the deal and says he’s unsure that UMG will ever sell, although Chinese tech giant Tencent bought 10% of the company at the end of 2019.
The one type of music business property Liberty does not own is actual music — neither master recordings nor publishing. But SiriusXM and iHeart develop their own on-air content every day, for which the broadcast companies pay relatively little. The senior executive close to Maffei says he believes labels and publishers “have too much power in the industry,” and through Liberty’s varied music assets, he’s trying to gain “some leverage back against them.”
Malone, Liberty’s reclusive founder and chairman, pays close attention to Maffei’s music deals and signs off on all of them, but at 78, he isn’t as active in the negotiations as he had been for decades. (He has gamely appeared in Maffei’s Investor Day videos — in November, he sang a few Queen notes off-key.) And thanks to his lucrative holdings in other areas, Malone, known for his patience as an investor, encourages Maffei’s long game in the music business. For example, in June 2018, Liberty tried unsuccessfully to buy 40% of iHeartMedia as it emerged from bankruptcy — but now the opportunity may have returned due to the broadcast giant’s low share price. Says Minneapolis investor Hill: “I’m sure what they’re thinking is, ‘If we were ever going to try it, now is our time.’ ”
That could be the music business story of early 2020, but Maffei is more ambiguous. “We have a permission slip to say, ‘OK, what might work in a year or two? What might work in five years?’ ” he says. “Well, we’ll be here, hopefully, and we’ll be able to do something smart and take advantage of it then.” Or, as Maffei sang more succinctly in his Freddie Mercury getup on Investor Day: “Deals will come! Deals will go! Sell them high! Buy them low!”