Madonna Remaking the Brand

Material Girl getting ready to leave Warner Music Group to sign a $120 million multifaceted deal with Live Nation that will enable her to record three records and have a hand in concert promotion, licensing and merchandise sales

By Natalie Finn Oct 11, 2007 3:40 AMTags

The Material Girl is about to ensure that she has more material than ever to market in the coming decade.

Madonna is reportedly poised to leave her longtime recording home, Warner Music Group, to ink an ultralucrative $120 million 10-year deal with the concert-promoting behemoth Live Nation Inc. that would net her cash, stock options and a one-stop shop for recording, touring, licensing and merchandizing deals.

The package includes a general advance of $17.5 million and advance payments of $50 million to $60 million for three studio albums, according to the Wall Street Journal, which first reported the pending deal.

People familiar with the deal told the WSJ Madonna, whose Confessions tour was one of the top acts of 2006, will get to keep 90 percent of the grosses if and when she tours again, with the remaining 10 percent going to Live Nation, which is expected to pay $50 million in cash and stock for the right to promote her concerts.

Profits from products that utilize Madonna's name and image and other licensing ventures will be split evenly between artist and company.

In an attempt to keep the superstar within the fold, Warner Bros. Records tried to bring TicketMaster parent IAC/InterActiveCorp. on board, so that it could also offer Madonna a deal that encompassed both touring and recording—a proposition that is looking increasingly attractive for labels these days, as less and less money is brought in from album sales.

Warner Music Group doesn't seem to be shedding too many tears over the shake-up, probably not least because it will retain the rights to Madonna's song catalog dating back more than 20 years. Her first album for Warner Bros. was her self-titled 1983 debut, which has sold more than 10 million copies. Her sophomore effort, Like a Virgin, has sold more than 21 million.

"Warners has demonstrated extremely savvy financial discipline with regard to the deals it enters into and, as importantly, the deals it doesn't enter into," Brian Posner, chief executive of one of Warners' shareholders, told the WSJ.

While the massive deal is risky for Live Nation, tour sponsorships and licensing fees from mobile phone companies to access Madonna's music will likely offset some of the costs; however, per the WSJ, Industry insiders have said that each of the singer's three Live Nation-released albums would have to sell at least 15 million copies for the promoter to recoup its investment on the recording contract alone.

Which could happen, considering Madonna's chart success has been steadier than most in recent years.

Her 10th studio album, 2005's Confessions on a Dance Floor, sold 11 million copies worldwide, 1.7 million of them in the U.S.

The 49-year-old entertainer, who last month made it onto the ballot for next year's Rock and Roll of Fame inductions, still has to cut another album for Warner Bros. and release a greatest-hits compilation before she's free to record for Live Nation.

But if both the quality and quantity of Madonna's creative output over the last decade is any clue, she probably already has plenty of ideas up her sleeve for the next.