Back in March, self SNLC'ed about issues at Carnegie Deli in NYC related to siphoning natural gas from Con Ed. Just this week, a different bit of dirty laundry got an airing at the other celebrated Carnegie-named institute in the neighborhood kitty corner from Carnegie Deli, namely the allegations by Ronald Perelman, chairman of the board of directors at Carnegie Hall, of what this NYT article described as "“related-party transactions” in "deals that posed potential conflicts of interest". The specific deal involves the Warner Music Prize, a $100K prize donated by the Warner Music Group, whose head is Len Blavatnik, another member of Carnegie's board, where the prize gala is scheduled for Carnegie next month. According to the NYT article:
"Mr. Perelman’s concerns were apparently not about the prize itself, but about whether Carnegie had properly vetted a project involving a commercial enterprise controlled by a board member...."
On the surface, that might sound a bit iffy on Warner Music Group's part and Blavatnik's part, if one takes Perelman at his word. Except that you should not, because there is another, subtler, 'conflict of interest' that implicitly calls into question Perelman's motivations for raising a fuss here, and casts doubts on his real reasons. It's contained in the parenthetical sentence in the same paragraph of that article, which goes....
.....as follows:
"(In 2011 Mr. Blavatnik’s firm had beat out several other suitors who wanted to buy the Warner Music Group, including Sony/ATV Music Publishing, which was working with Mr. Perelman and Guggenheim Partners, an investment firm.)"
Back in May 2011, at the NYT's "DealBook" blog, Michael De La Merced and Ben Sisario noted the bidding war for Warner Music at the time
here:
"By this week, however, three suitors had emerged with strong prospects. Mr. Blavatnik; Tom and Alec Gores, brothers who run their own private equity shops; and Sony/ATV Music Publishing, which had been working with the billionaire Ronald O. Perelman and the investment firm Guggenheim Partners."
One commentator who put 2 + 2 together is Drew McManus at his Adaptistration blog
here, where he starts by saying:
"Transparency within the nonprofit performing arts field has always been a troubling issue, in short, most measures fall far short of where they need to be and the byproducts are a string of internal abuses, financial mismanagement, cronyism, and even embezzlement. So whenever calls for increased transparency are heard, it should be a welcome message...."
McManus then says that Carnegie Hall seems to be positioning outside of this line of inquiry with the whole Perelman situation, but then makes this jump, after citing articles in the
Wall Street Journal and the
NYT:
"According to those reports, it is becoming increasingly clear is that Perelman is apparently using his chairman position to advance a personal agenda against another board member and fellow billionaire, Len Blavatnik, who outbid Perelman in 2011 for control over Warner Music Group.
That piece of recent history becomes important in light of the fact that much of Perelman’s motivation for increased transparency stems from unspecified process related concerns related to Carnegie’s involvement with the Warner Music Prize, a $100,000 award given to a young classical musician. The prize, and related gala ceremony, is funded by the Warner Music Group and the Blavatnik Family Foundation....
Consequently, even though his stated concerns over a lack of board access to concert event expenses seems like a good thing on the surface (and really, every board should have access to that data), it isn’t difficult to imagine that his motives have less to do with stewardship and more with advancing his own programming agenda."
Part of that programming agenda evidently has to do with de-emphasizing classical music and emphasizing more pop and rock acts, per
this NYT article back in February around the time that he became board chairman:
"For much of its history, Carnegie Hall was a major draw for popular music, including landmark rock concerts starting in the 1950s, and Mr. Perelman said it was time to reclaim that legacy.
He noted that the Beatles performed at Carnegie in 1964. “The Rolling Stones were there” the same year, he said. “We need a little more balance in the programming to broaden the audience and particularly the artists.”"
Subtext translation: cut back on classical. The catch, of course, is that times have changed, not to mention technology, since rock and pop need amplification as a rule. Today, rock and pop acts can fill Madison Square Garden, Yankee Stadium, and CitiField, which obviously have a lot more room than Carnegie Hall, and where modern technology can deliver sound to all seats at those larger venues. The whole point of Carnegie Hall in terms of sound is that it's meant for music that does not need amplification. The earlier article did note:
"While some classical music loyalists may object to a stream of contemporary offerings, the hall’s leadership argues that such concerts are necessary, given the aging of the classical music audience and the resulting financial travails of symphony orchestras across the country.
“We’ve been trying for a long time to do this,” said Clive Gillinson, 68, Carnegie Hall’s executive and artistic director. “We’ve always been about the best of every sort of music. It’s a great part of our history, and it should be a great part of our future as well.”'
It's all the more ironic to read that statement by Clive Gillinson, apparently in tune with Perelman's sentiments at the time, when you realize that during the recent blow-up, Perelman suspended Gillinson last month, per
this report, which mentioned an e-mail from Perelman to other Carnegie Hall trustees:
"Behind-the-scenes tensions at Carnegie Hall erupted into public view on Wednesday after Ronald O. Perelman, the billionaire businessman who became chairman of the Carnegie board this year, sent an email to his fellow trustees accusing the organization’s executive and artistic director, Clive Gillinson, of a “troubling lack of transparency” and criticizing the board for failing to provide “appropriate oversight.”
The email disclosed that Mr. Perelman and two other Carnegie officers had gone so far as to briefly suspend Mr. Gillinson in August, and suggested that the board was troubled by factionalism."
But again, keep in mind the Perelman-Blatavnik history, and the 'conflict of interest' on Perelman's side there. In addition, Dana Canedy had
this 1999 NYT article about Perelman and his record of corporate stewardship:
"....the image of Revlon's majority owner, the billionaire Ronald O. Perelman, is anything but unblemished. A 1980's-style deal maker with a passion for the high life, Mr. Perelman is known for bailing out of ventures in the nick of time. There have been fiascos -- for public shareholders, at least -- at Marvel Entertainment, Coleman, Consolidated Cigar and Sunbeam, all of which lost money and accumulated debt on his watch."
In 2013, in
this DealBook blog post at the NYT, Peter Lattman reports on further shenanigans by Perelman with respect to Revlon:
"The billionaire takeover artist Ronald O. Perelman has made his fortune doing big, messy deals that often end up in nasty legal disputes.
One of those messy deals — an attempt in 2009 to take Revlon private — ended up not only in court but also on the desks of federal regulators.
On Thursday, the Securities and Exchange Commission announced that Revlon had agreed to pay an $850,000 penalty to settle accusations that it deceived shareholders and its independent directors in connection with the failed takeover. The relatively small fine adds to the roughly $37 million in settlements that the company has paid to shareholders to resolve several related private lawsuits."
So one wonders; why does this nasty rich guy have any credibility in the Carnegie story, or any story? Granted, it doesn't speak well for Carnegie's board that they were stupid enough to elect him chairman in the first place. In addition, that is quite a jump that McManus made there as to why Perelman has behaved the way he has. Maybe in putting 2 + 2 together, he got 5. But on balance, I buy the connection, as the idea is in keeping with Perelman's past corporate behavior.
Of course, this could lead to a huge financial hole for Carnegie Hall if Perelman decides to cut Carnegie Hall off from any future donations. It's going to take some time for this story to play out, and I certainly don't know how it will play out. Stay tuned.
WIth that, time for the standard SNLC protocol, namely your loser stories for the week.....