Battle Of The CEOs: Live Nation Vs. Vivendi For Major Artists

CNBC's "Fast Money First"

LIVE NATION CEO MICHAEL RAPINO threw down the gauntlet at the major labels during an interview on CNBC's"Fast Money First,"  declaring that the live concert promotion firm would engage in bidding wars for major-label superstar talent. However, VIVENDI CEO JEAN-BERNARD LEVY certainly wasn't intimidated in his response.

In the CNBC segment, RAPINO explained how LIVE NATION plans to monotize the MADONNA deal, and shed some light on possible future moves by his company. NORTH AMERICAN concert sales jumped 16% last year to a record $3.6 billion, according to trade publication POLLSTAR. CNBC iniitally asked, "Is the MATERIAL GIRL's landmark 10-year agreement the wave of the future?" -- before going into the interview.

I think weâ??re going to start a bidding war over artists who sell a lot of concert tickets.

Here are some excerpts of the interview:

Q: How does the MADONNA deal work?
A: "We have 10 years to maximize all of her revenues from T-shirts, to concerts and films and downloads," says RAPINO. "And through all of that we distribute our profits."

Q: In other words you basically pay MADONNA $12.5 million every year and then you own that content. Is that right?
A: "“Basically," he replies.

Q: Can you generate a revenue stream similar to the one lost in CD sales?
A: "We believe that the Internet is the live concert promoters' best friend, although it might have crippled the record label business," RAPINO replies. "The live business (is) connected to the fan, directly, which enables us to sell singles and downloads and everything the consumer wants."

Q: Is your model to eliminate the role of the label?
A: "Absolutely, the concert is now moving to the center of the circle for the artist. The artist is now looking for the live show and everything that can be done around the live show."

Q: Will you start a bidding war, or will TIME WARNER (and similar companies) just get out of the music business entirely?
A: "I think we’re going to start a bidding war over artists who sell a lot of concert tickets." says RAPINO.

See the interview here.

Vivendi Chief Not Worried

VIVENDI CEO JEAN-BERNARD LEVY has shot back at LIVE NATION's CEO MICHAEL RAPINO. LEVY said UNIVERSAL MUSIC GROUP unit will succeed in keeping its big-name artists even though he is not surprised superstars like MADONNA seek lucrative deals with nontraditional music companies.

LEVY said UNIVERSAL MUSIC, the world's largest music company, will hold on to its marquee roster because it has focused on being a good partner to its artists, who include 50 CENT, STING and MARIAH CAREY.

"I do not believe we'll lose a lot of artists," LEVY said in an interview with REUTERS in NEW YORK. "Indeed, we do so well that the artists feel good working with us."

LEVY said UNIVERSAL is already signing artists to similar so-called 360-degree contracts where the company shares in other artist rights and products such as image rights and merchandising, in addition to the usual recorded music and publishing rights.

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