Jay-Z Keeps Live Nation on the Hearts and Minds of America With Enormous Deal
With Nearly $400M Invested in Artist Deals This Year, Tour Promoter Needs to Maximize Returns
No long after we reported on the Live Nation-U2 deal, the ever-expanding music company is clogging up our RSS readers again with the announcement of an almost-completed 10-year deal with urban star and business mogul Jay-Z.
The deal, announced in yesterday's New York Times, is reportedly worth $150 million, by far Live Nation's biggest 360 artist deal. But the agreement buys into much more than Jay-Z the artist; it reportedly takes in Hova's broad range of business endeavors, including recording, merchandising, touring, publishing, image-licensing and sponsorships.
Whilst many are lauding this as a shrewd investment from Live Nation and for the future of the music business, not all industry pundits are applauding. Maverick music industry commentator Bob Lefsetz says this morning in his daily newsletter that this deal is "old men trying to cash in one more time to support their egregious, expansive, expensive lifestyles" and an attempt by Live Nation to bolster its flagging stock price.
Live Nation's chairman, Michael Cohl, commented in the Times piece that he was not worried, and that "the whole [deal] is what's important, [Jay-Z] could be doing more tours and doing great, there could be endorsements and sponsorships."
Given that Jay-Z sold his Rocawear Company for over $200 million last year and has many other financial interests, Mr Cohl may well be on the right track with Live Nation's new artist-related businesses. But, with an ever-increasing need to maintain and leverage these superstar artists' brand equity, Live Nation is really going to have to learn to speak the language of brands andmanage brand-related businesses.