Madonna intends
to sign a $120 million recording and touring deal with
live entertainment promoter Live Nation Inc. and leave her
longtime record label at Warner Music Group Corp., a
person familiar with the contract negotiations said
Wednesday.
The pop
superstar's management informed Warner last week that she
would accept Live Nation's offer after the record
company refused to match the deal, said the person,
who spoke on condition of anonymity because of the
confidential nature of the matter. Under terms of the
proposed deal, Madonna, 49, would receive a signing
bonus of about $18 million and a roughly $17 million
advance for each of three albums, the person said. A
portion of the compensation would involve stock, the person
said.
Madonna could
also benefit significantly from the touring component of
the deal, which gives Live Nation the exclusive right to
promote her tours, the person said. In a bid to
compete with the Live Nation offer, Warner pursued a
possible partnership with ticket retailer Ticketmaster,
a unit of IAC/InterActiveCorp, that would have enabled the
record company to offer a spectrum of touring services
to Madonna, the person said. Warner Music and Live
Nation declined to comment. A call to Madonna's
publicist was not immediately returned.
The proposed
10-year agreement would give Live Nation the rights to sell
Madonna merchandise and license her name, and any revenue
from such products would be split between the singer
and the company, The Wall Street Journal reported,
citing unnamed people familiar with the deal. Live
Nation also would have to pay $50 million in cash and
stock to promote Madonna's tours, according to the
Journal, which broke news of the deal on its Web
site Wednesday afternoon. The agreement would be in line
with similar deals other artists have struck with
labels in recent years that give record companies a
stake in their artists beyond the sale of recordings.
Live Nation,
which promotes and produces music shows, theatrical
performances, and other live events worldwide, has been
looking to expand beyond its core businesses to offer
artists services such as direct merchandising and
exclusive ticket sales. Its Artist Nation division
sells tickets and artist merchandise online. Warner has also
set out to strike deals with artists and other music
industry players in a bid to garner a share of revenue
from other segments of the music industry, such as
merchandising and touring. Those segments are faring better
than recorded music sales.
Madonna first
signed with Warner Music Group subsidiary Warner Bros.
Records in 1984. Her last contract with the New York-based
company calls for her to deliver one more studio
album, expected next year, and a greatest hits record.
The singer has been among Warner Music's best-selling
artists for years and arguably remains pop music royalty.
Losing the rights to release her new recordings could prove
to be a significant blow to the company's bottom line.
Warner, however, retains the rights to sell and
license her catalog of hits such as ''Like a Virgin''
and ''Music.'' Warner shares rose 11 cents to $11.29
Wednesday. Shares of Live Nation fell 32 cents, or
1.4%, to $23.36, then gained 64 cents in after-hours
trading. (Alex Veiga, AP)
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