Bloomberg on Madonna, Warners and Live Nation
While the only report about Madonna being close to end her 25 year deal with Warner Bros comes from yesterday’s Wall Street Journal and no official source has commented on the rumour yet, more and more news outlet continue speculating on the possible new contract with Live Nation, foreseeing a scenario that’s all yet to design. Here is one more article posted on the online website of Bloomberg.
Warner Music Group Corp. may fall following a report on the Wall Street Journal website that Madonna will leave the company and sign a 10-year recording and performance contract worth about $120 million in cash and stock with Live Nation Inc.
“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 Corp. Madonna’s last album, “Confessions on a Dance Floor,” opened as the top U.S. album in 2005 and has sold 1.6 million copies in the U.S., according to Billboard.com, citing Nielsen SoundScan.
“She’s made a lot of money for Warner, the biggest hit for them last year,” 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 today. There was no trading. The shares rose 11 cents to $11.29 yesterday in New York Stock Exchange composite trading. They have fallen 51 percent this year. Live Nation fell 32 cents to $23.36.
New York-based Warner retains Madonna’s music catalog, 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 rumors are testament that maybe we are being viewed as a very different business partner.”
John Vlautin, a spokesman for Live Nation, didn’t respond to phone calls seeking comment.
“It certainly won’t help losing a marquee artist,” Richard Greenfield, a New York-based analyst with Pali Capital Inc., said in an e-mail. ”The problem is the precedent it sets for established artists leaving labels.”
From an article by Andy Fixmer and Michael White, Bloomberg. Thanks to Vincy.