U2 Signs 12-Year Deal with Live Nation
Billboard Magazine by Ray Waddell (2008-03-31)
U2 has inked a 12-year deal with Live Nation Artists to handle its worldwide touring, merchandising, and the band’s U2.com Web site. “I’m very happy to go into a partnership with them,” U2 manager Paul McGuinness says.
U2’s deal with Live Nation puts the promoter in business with one of the highest earning bands in the world for more than a decade.
It’s a 12-year deal with Live Nation Artists that includes worldwide touring, merchandising, and the band’s U2.com Web site. The deal, however, is not a true 360-degree pact, as there is no publishing component and the band retains its relationship with Universal Music to release music.
“It’s not do-or-die that we have to have everything. We just have to have certain critical mass, and we more than have it in this deal,” Michael Cohl, Live Nation chairman of the board and CEO of Live Nation Artists, tells Billboard.com.
U2 manager Paul McGuinness adds, “There’s a certain convergence taking place in the industry, and it’s obvious that the biggest part of U2’s business now is their live business, even though they’re a major, major record-selling act.”
The band’s relationship with Live Nation has been “pretty near perfect,” McGuinness says. “For some time now they’ve been executing, promoting and producing our tours as partners pretty well perfectly. Since they want to consolidate rights and they have an online vision that I believe in, their Ticketmaster deal is expiring, which is going to change their margin, I’m very happy to go into a partnership with them. And, apart from all the financial stuff, there is a real friendship, a real bond.”
Financial terms were not disclosed, but Cohl says that the deal was similar to the previously announced Madonna deal (valued at $120 million), in that there was some money paid upfront and that LNA would share in the profits and will be “substantially and materially involved” in all pertinent rights’ revenue streams.
Both camps expect synergies to come into play when exploitation of these rights are integrated. “Conceptually it’s got to be better, in that the broadcast and the streaming and the Internet and the fan club and the website are all in the same hands,” says Cohl. “There’s no debate. There are no different vested interests. We’re going to have a great starting block and where we go will be new, unexplored territory that instinctively feels like it should be exponentially better.”
U2 is in an elite class for touring, with its 2005-2007 Vertigo tour taking in close to $400 million, the second highest ever. So touring alone should generate more than a billion dollars in grosses over the course of the contract.
The length of the deal, which exceeds even Madonna’s 10-year pact, “indeed is a mark of the faith and trust we have in them,” says McGuinness, adding, “In 12 years time U2 will not even be the age the Rolling Stones are now.”
If everything goes as planned, the power of the U2/Live Nation Artists venture will become apparent by next year. “The band are in the studio now. We hope to release an album this fall and tour in ’09,” says McGuinness. “There’s a constant rolling plan and sometimes it gets postponed, but we plan all the time, and that’s the current plan.”