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

Posted by Mike Tunnicliffe in Ad Age Songs For Soap onn 04.03.08 @ 02:44 PM

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.

Jay-Z has inked one of the most lucrative music deals in history, according to the Times.

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.

Live Nation Extends Relationship With U2

Welcome to Songs for Soap, Your Trusted Source for Everything Live Nation and Madonna-Related

Posted by Mike Tunnicliffe in Ad Age Songs For Soap on 03.31.08 @ 04:25 PM



Photo: Gary Calton
U2 will join Live Nation for 12 years.

Reuters reported this morning that Live Nation Inc. has announced a 12-year deal to exclusively represent U2's touring, merchandise, branding opportunities, website, digital marketing and other creative and marketing services.

The contract follows a broader deal struck last year with Madonna, which also included music distribution and publishing. While the U2 deal doesn't include publishing and recordings -- which remain with Universal Music Group -- the deal highlights the ongoing changes in the music industry.

There are not many details yet about the logistics or financial aspects of the deal with U2, but the Madonna deal which was reportedly worth $120 million over 10 years, so, using that as a benchmark, the U2 deal is likely to be worth in the 10's of millions.

According to Reuters, Live Nation Chairman Michael Cohl said the company "will focus on signing other major artists rather than developing new acts such as a traditional music label or publishing house would." The company's new strategy is to diversify its interests away from tour promotion and into other areas of revenue and product development. According to Cohl, its new strategy will also include its website LiveNation.com, which he said was "aiming to become the biggest music portal on the web through a mixture of ticketing, merchandise sales as well as fan clubs and other features."

[Via Reuters]