It's Official: Madonna Signs $120 Million Live Nation Deal; Meanwhile, Wall St. Expresses Doubts

Madonna

As first tipped on ALL ACCESS, LIVE NATION's Pres./CEO MICHAEL RAPINO officially confirmed TODAY that MADONNA has entered into a global partnership with LIVE NATION and will become the founding artist in its ARTIST NATION division. 

"The paradigm in the music business has shifted and as an artist and a business woman, I have to move with that shift," commented MADONNA. "For the first time in my career, the way that my music can reach my fans is unlimited. I've never wanted to think in a limited way and with this new partnership, the possibilities are endless. Who knows how my albums will be distributed in the future? That's what's exciting about this deal -- everything is possible. LIVE NATION has offered me a true partnership and after 25 years in the business, I feel that I deserve that."

The paradigm in the music business has shifted and as an artist and a business woman, I have to move with that shift.

"MADONNA is a true icon and maverick as an artist and in business," stated RAPINO. "Our partnership is a defining moment in music history. I am thrilled that MADONNA, who is also now a shareholder in our company, has joined with us to create a new business model for our industry. Bringing all the varied elements of MADONNA's stunning music career into the ARTIST NATION and LIVE NATION family, moves her future and the future of our company into a unique and extraordinary place." 

Introducing Artist Nation

RAPINO also announced the structure behind its Artist nation division, led by its Chairman/CEO MICHAEL COHL.

COHL commented, "ARTIST NATION works for the direct benefit of the artist to better market their music across all their diverse businesses to extend their fan base. Our company can leverage LIVE NATION's many assets in order to help artists reach their fullest potential and deliver the ultimate experience to the fan. This is really an extension of the work we have already been doing with THE ROLLING STONES, U2 and many other bands over the years. In order to execute this, ARTIST NATION has put together a superstar team in every area of the music chain."

ARTIST NATION will be headquartered in MIAMI, FL.

Wall St. Not Enamored Of Deal

As MADONNA wrapped up negotiations for a $120 million, 10-year deal with LIVE NATION INC., WALL STREET has reacted quicker than a ray of light to question the landmark accord -- and make some cutting comments in the process, writes THE WALL STREET JOURNAL. 

"For $120 million, she's all yours," wrote analyst MICHAEL SAVNER OF BANC of AMERICA SECURITIES. "There is clearly headline risk associated with a MADONNA defection" from WARNER MUSIC GROUP. "However, the bigger risk would be to overpay for an artist who does not seem to be generating the revenue to support the contract being discussed."

The two prime reasons for MADONNA not being able to sell CDs the way she used to are her age (the contract would take effect when she is 50, meaning at its end she would be two years away from qualifying for Social Security) and where she is in her career.

Of course, revenue is still expected to be generated by concerts and the right to sell MADONNA-related merchandise and license her name.

But investors also appear to be questioning the deal's appeal. Shares of LIVE NATION dropped 3.7% on THURSDAY (10/11), when news of the pending accord hit. WARNER MUSIC GROUP had a better session, declining 1.4%. Both stocks were little changed on FRIDAY.

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