Madonna dumps Warner for $120 million Live Nation deal

first_imgMadonna’s landmark deal with concert promoter Live Nation Inc. marks the latest move by the music industry to find new ways to profit from artists as CD sales slip and the Internet changes the way music is delivered. The deal – officially announced Tuesday in a joint statement by Live Nation and the Material Girl – gives the company an all-encompassing stake in her music. Financial terms were not disclosed. But the 10-year deal is worth about $120million, said a person who spoke on condition of anonymity because of the confidential nature of the matter. For Live Nation, the signing of Madonna was part of a push to forge similar deals with a range of artists, from superstars to emerging talent, under its new Artist Nation division. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREGame Center: Chargers at Kansas City Chiefs, Sunday, 10 a.m.“Madonna is the first step to making Live Nation into the next-generation music company,” Live Nation CEO Michael Rapino said during an investor conference call. “We believe it should help attract additional artists.” The strategy has been adopted by other recording companies. Britain’s EMI Group PLC signed a similar all-encompassing rights deal with Robbie Williams in 2002. Madonna made her move after her longtime record company, Warner Music Group Corp., refused to match the terms of the Live Nation offer. Madonna said in the statement that she was drawn to the deal with Live Nation because of the changes the music business has undergone in recent years. “The paradigm in the music business has shifted, and as an artist and a businesswoman, I have to move with that shift,” Madonna said. “For the first time in my career, the way that my music can reach my fans is unlimited. I’ve never wanted to think in a limited way and with this new partnership, the possibilities are endless.” The singer still owes Warner Bros. Records another studio album and a greatest-hits album. In its own written statement, Warner Music congratulated Madonna. “She is one of the most remarkable artists of our time,” the company said, reminding her fans that Warner Music will still issue her next album and owns her catalog of recordings from the past 25 years. The deal with Live Nation encompasses future music and music-related businesses, including the Madonna brand, albums, touring, merchandising, fan club and Web site, DVDs, music-related television and film projects, and associated sponsorship agreements, the company said. Under terms of the deal, Madonna, 49, would receive a signing bonus of about $18million and a roughly $17million advance for each of three albums, the person said. A portion of the compensation would involve stock. Madonna could also benefit significantly from the touring component of the agreement, which gives Live Nation the exclusive right to promote her tours, the person said. The company said it could release its first Madonna album in two to three years and stage a tour within two years. The deal has gotten mixed reactions on Wall Street, with some analysts questioning whether Live Nation can squeeze out a significant profit. Shares of Live Nation rose 3cents to $21.45 on Tuesday. Rapino said he doesn’t understand Wall Street’s skepticism. “I’m amazed that our stock hasn’t jumped considerably in that we’re absolutely delivering what we talked about for two years,” he said, referring to Live Nation’s efforts to grab a bigger slice of the music business beyond touring. Madonna’s last tour generated nearly $200million globally, and her last album, “Confessions on a Dance Floor,” sold nearly 8million copies worldwide, Live Nation said. Still, artists generally get 90percent of ticket sales from tours, with promoters taking the rest. Album sales, meanwhile, have been in decline for most of the decade and digital sales, while growing, remain a fraction of recorded music sales. Madonna would have to stage several successful tours, release a few albums and pull in significant other revenue for Live Nation to recover the money it must pay the singer.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img read more