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Live Nation Inks Deals With Madonna, U2, Jay-Z Worth $1.3B

Yes, that is correct - $1.3 billion or more. In October of 2007, Madonna inked a deal with Live Nation estimated to be worth $120 million. Jay-Z is reported to be in current negotiations for a similar long-term contract with Live Nation estimated to be worth $150 million. The U2 deal announced in March is expected to be worth more than $1 billion based on the band's 2005-2007 Vertigo tour which grossed over $400 million. The details of these deals are extraordinary.

The Details
Each of these deals runs for 10 years and encompasses multiple revenue streams including websites, fan clubs, tour productions, music distribution (except for U2 whose distribution remains with Universal Music Group), merchandising, DVDs, music-related television and film projects, and others.

Read the original articles on the BillBoard magazine website.

These deals represent a trend towards consolidated rights management for the music artists. All of the revenue streams and rights management for these music artists will be consolidated under one umbrella. This may also represent a significant shift in the business model of the music industry. Today the major labels manage limited revenue streams for a large number of artists. The artists that make it huge cover the investment losses for those that don't. The shift could be towards managing all the revenue streams for a few select artists who have proven track records and will bring in the numbers. This works great for the successful music artists and Live Nation. It may make it tougher for the unproven artists to break.

The Downside
We now will have to go through Live Nation for photo pass credentials for all the artists who enter similar deals. They are running all of the tours for Madonna, U2 and Jay-Z for the next 10 years. Live Nation will also be the company with whom we will have to negotiate if any of our images are licensed for merchandise, websites, art for CDs/DVDs, broadcast rights, etc. I anticipate we will see more predatory, rights-grabbing agreements when we arrive to pick up photo passes before these shows. Live Nation has a lot at stake so they will want to control as much as possible.

The Upside
Live Nation has deep pockets and will be earning a significant amount from these deals. That means we should be able to demand fair market rates and get them. Keeping up with the music business deals like this gives us knowledge that is powerful when negotiating licensing agreements with them. I admit it only matters for the artists who sign these deals, but if you work in that bracket of the industry then this is valuable information. Imagine the dollars you can negotiate if the rights package includes all of the revenue streams that Live Nation controls for a given artist. Without knowledge about these huge deals, you might sell yourself way short and not even know it.