Nickelback deal embarrassing for Warner or expensive for Live Nation?

July 8, 2008

nickelback.jpgLive Nation said on Tuesday it has signed a global ‘360-degree’ deal with Canadian rock band Nickelback covering the band’s touring, recording and merchandising.

The deal was said to be in the $50 million to $70 million range over the course of the three-album/three-tour deal, according to a source.

The deal could cause some blushes at Warner Music Group. Back in December 2006 Warner paid around $73.5 million for a 73.5 percent stake in Nickelback’s label Road Runner Records — no doubt with hopes to sell many more Nickelback albums for years to come.

But Nickelback, which has sold more 26 million albums to date, still has two more albums to deliver for Road Runner and a greatest hits package,  so there’s every chance that the band’s best album years will be behind it. So this could instead end up being an expensive deal for Live Nation.

Live Nation never confirms how much it agrees to pay for its comprehensive partnerships with major artists. A deal with pop veteran Madonna, another soon-to-be former Warner artist, was reported to be around $120 million spread over ten years. It also has agreements with Jay-Z and more recently Shakira.

Live Nation management’s bet is that its comprehensive 360-degree deals will allow it to make profits in other areas beyond the recording and thereby spread its risk a little wider than a traditional recording and publishing company. The entire music industry is watching closely to see if this gamble works.

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(Photo: Reuters)

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