Madonna May be Leaving Warner Music Group

Thursday, October 11, 2007

Madonna is evidently set to leave her longtime recording home, Warner Music Group in favor of the mega-lucrative $120 million, 10-year deal with the concert-promoting giant Live Nation Inc. The deal would net her cash, stock options and a one-stop shop for recording, touring, licensing and merchandising deals according to a report in the Wall Street Journal.

The package is said to include an advance of $17 million along with payments of $50 to $60 million for three studio albums. Since the Confessions tour was a huge success last year, Madonna gets to keep 90 percent of the gross, if and when she decides to tour again. The remaining 10 percent will go to Live Nation. Product profits are expected to be split on an even basis between Madonna and Live Nation.

An attempt by Warner Bros. Records to bring TicketMaster parent IAC/InterActiveCorp. on board to be able to offer Madonna a deal that included both touring and recording was initiated to keep Madonna in their fold, according to E Online. Since money from album sales are becoming less and less profitable, many artists opt for this option.

Warner Bros. is not upset by this since it will retain the rights to Madonna’s song catalog dating back 20 years. After all, her first album sold more than 10 million copies in 1983 and her ‘Like a Virgin’ sold more than 21 million, so it is no big loss to them.

Other perks for this rather risky deal for Live Nation are tour sponsorships, licensing fees from mobile phone companies to access Madonna’s music and will likely offset some of the costs.  Each of the three Live Nation albums would need to sell at least 15 million copies to recoup its investment from the promoter.

The 49-year-old singer made it onto the ballot for next year’s Rock and Roll Hall of Fame for next year.  She still has a studio album and a greatest hits album to cut for Warner Bros before she can go forward with Live Nation.

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