I spent $100 mln and all I got was this lousy Bono t-shirt
The Live Nation touring and merchandising agreement with supergroup U2 could be worth $100 million estimates one Wall Street analyst.
Live Nation, a tour promoter that is evolving rapidly into an all-round music company, has prepped a 12-year deal with supergroup U2 which includes its merchandising, digital, image licensing in addition to its touring but hasn’t revealed how much money will change hands (not to us anyway).
However David Joyce, media analyst at Miller Tabak, ventures that the deal will be in the $100 million range. Joyce, who likes Live Nation’s prospects, has based his guesstimate on the $120 million figure that Live Nation is widely believed to have agreed with Madonna in cash and stock last year.
The Madonna deal was a much more far-reaching partnership that included three albums over 10 years. While the U2 pact doesn’t include recording, it’s a longer term deal with a bigger live act says Joyce.
What does $100 million get you these days? Well for 12 years Live Nation can print as many ‘U2 waz ‘ere 2018 World Tour’ t-shirts as they can sell, and they might be able to convince a few more big pop names to come on board the touring/merchandise all-you-can-eat fiesta now that they have Madonna and U2 on their calling card. But will they make their money back? That’s the big question.
Joyce cautions that the record labels want a piece of the action as well:
“Will the music label companies, facing continued secular decline in their traditional album-selling business, get into the concert promotion, artist merchandising, and fan website business with their currently signed artists, thereby fending off Live Nation’s expansion attempts?”
That appears likely, especially as Live Nation works quickly to formalize deeper relationships with the biggest names in pop and may be willing to pay more than the labels at present. It’s shaping up to be an arms race that could end up getting very expensive.