Madonna does the math


How would the rumored deal between Madonna and Live Nation, the former Clear Channel Entertainment, work out? Pretty good for "The Material Girl," but it all depends for the company.

Both the Wall Street Journal and New York Post – publications soon to become siblings – reported that Madonna is about to sign a 10-year deal with Live Nation for 120 million bucks to cover concert tours, studio albums, merchandise sales and licensing of her name. Madonna still has to deliver one more studio album to Warner Music Group to fulfill the contract with her current label, Warner Bros. Records, but she would then be free to do something else. Instead of the traditional route of signing with the different label, the deal with Live Nation could seek out new distribution avenues or they could simply sign for one of the big record companies to distribute their new independent label. Madonna reportedly gets 17.5 million up front, 50-60 million in advance payments for the albums, 50 million in cash and stock for the right to promote her concert tours, plus the usual 90% take from the concerts take. Licensing revenues would be split 50-50.

RBR observation: She didn’t call herself "The Material Girl" for nothing. This sounds like a pretty good deal for Madonna, with no apparent downside. The risk appears to all be with Live Nation. According to record industry sources in the Post article, Live Nation will need to sell 15 million copies of each of the three albums just to break even on that part of the deal. Now, let’s see, Madonna has thus far issued 20 albums. How many have sold 15 million or more worldwide? Four.