Madonna Close to Leaving Warner Music -- WSJ

Pop star Madonna is nearing a $120M deal to jump from Warner Bros. Records to concert promoter Live Nation Inc., the latest evidence of a shifting landscape in the music industry. According to the Wall Street Journal, under the 10-year deal with Live Nation, the Material Girl would receive a mix of cash and stock in exchange for rights to sell three studio albums, promote concert tours, sell merchandise and license her name. People familiar with the deal say the package includes a general $17.5M advance and $50M-$60M in advance payments for the albums. Madonna is still committed to an album for Warner Records, part of the Warner Music Group, which is not going down without a fight. The company, according to the Journal, has enlisted IAC/InterActiveCorp., the parent of TicketMaster, to partner in an attempt to counter the Live Nation deal. Given the minimal profitability of concert promoters, Live Nation, the world's largest, has been seeking additional sources of income. If Madonna does leave, Warner Music would retain rights to her catalog of albums over the past 20 years, as well as the yet-to-be-released album. One large Warner Music shareholder apparently isn't concerned, saying the cost of keeping her may have been too high.

Sources: Wall Street Journal, 24/7 Wall Street
Commentary: Warner Music Won't Bid for EMI • Media Companies Slow to Bridge the Digital Divide
Stocks/ETFs to watch: LYV, WMG, IACI. Competitors: EMIPY. ETFs: PBF, PEJ
Earnings call transcript: Warner Music Group F3Q07

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