Madonna may ditch Warner for $120 mn Live Nation pact
The pact would give Madonna a mix of cash and stock in exchange for the rights to sell three studio albums, promote concert tours, sell merchandise and license her name.
By Agencies |
LOS ANGELES: Pop star Madonna is close to leaving her long-time Warner Brothers Records label for a wide-ranging $120 million deal with concert promotion firm Live Nation, the Wall Street Journal reported on its website on Wednesday.
The pact would give Madonna a mix of cash and stock in exchange for the rights to sell three studio albums, promote concert tours, sell merchandise and license her name, the paper said.
Madonna, 49, has recorded for the Warner Music Group-owned label her entire career, stretching back to her 1983 self-titled debut album. A Live Nation spokesman declined comment. Publicists for both Warner Music and Madonna did not immediately reply to requests for comment. Analysts said the move, if true, could Warner Music Group scrips badly.
“This report, if true, is clearly a short-term negative for WMG shares,” said Jesper Kruger, who helps manage about $64 billion at ATP in Copenhagen. “On the upside, WMG keeps all the rights to Madonna’s earlier work.”
The defection would be one of the worst suffered by Warner Music, said Laura Martin, an analyst with Soleil Securities. Madonna’s last album, ‘Confessions on a Dance Floor,’ opened as the top US album in 2005 and has sold 1.6 million copies in the US, according to Billboard.com, citing Nielsen SoundScan.
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“She’s made a lot of money for Warner, the biggest hit for them last year,” Los Angeles-based Martin said in an interview. “It’s really not good.” Warner Music was indicated the equivalent of 30 cents lower at $10.98 in Frankfurt on Thursday. There was no trading. The shares rose 11 cents to $11.29 on Wednesday in New York Stock Exchange composite trading. They have fallen 51% this year. Live Nation fell 32 cents to $23.36. New York-based Warner retains Madonna’s music catalogue, as well as the rights to her next studio album and a greatest hits compilation after that, according to a person familiar with the negotiations who confirmed the music company is no longer involved in talks. Warner Music declined to comment, said Will Tanous, a company spokesman. Live Nation, the world’s largest concert promoter, would receive the rights to sell three studio albums, promote concert tours and license Madonna’s name, the Wall Street Journal said.
The agreement reflects Live Nation’s strategy of seeking broader accords with artists to share in sales generated by albums and merchandise. Madonna’s move from a record company to one known primarily for promoting concerts underscores the growing importance of touring as music sales decline.
Live Nation chief executive officer Michael Rapino, asked last month about speculation Madonna may sign a deal that includes sharing revenue from touring, merchandise and recorded music, said, “The rumours are testament that maybe we are being viewed as a very different business partner.”
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John Vlautin, a spokesman for Live Nation, didn’t respond to phone calls seeking comment. Madonna’s ‘Confessions’ tour last year, promoted by Live Nation, took in about $194 million, the most ever for a female artist, Billboard reported in December. ‘A Bigger Bang’, the Rolling Stones tour in late 2005 and early 2006, was the biggest ever with $437 million in sales, the trade publication said. Box-office revenue from concerts in North America increased 35% to more than $2.8 billion in 2006, according to Billboard Boxscore, and the worldwide concert take rose 30% to $3.4 billion. US album sales fell 15% in the first half of this year to 229.8 million units, Nielsen SoundScan said in July. Warner Music, led by chairman and CEO Edgar Bronfman Jr, ranked third with 19% of the market.
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“It certainly won’t help losing a marquee artist,” Richard Greenfield, a New York-based analyst with Pali Capital, said in an e-mail. “The problem is the precedent it sets for established artists leaving labels.”Download
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