Although Live Nation did not spell out the financials of the unified rights contract, Reuters is reporting it is worth between $50 million and $70 million. The quartet, from Hanna, ALB and are now based in Vancouver, BC, owes Roadrunner Records two more albums. Live Nation’s deal is for three album and touring cycles with an option for a fourth.
Under the “360-degree” deal, Live Nation has acquired 12 separate artist rights to feed its global distribution pipeline touring, tour sponsorship, tour merchandise, tour VIP/travel packages, secondary ticketing, recorded music, clothing, licensing and other retail merchandise, non-tour sponsorship and endorsements, DVD and broadcast rights, fan club, website and literary rights.
The deal comes on the heels of Live Nation’s recent agreements with Jay-Z, Madonna and Shakira, and the company will likely add another couple more before the end of the year. Though being proclaimed as a blueprint for future entertainment deals within the music industry, the largess of the contracts has been one of the sticking points for Wall Street investors who have not looked kindly upon Live Nation’s stock for months. In addition, feuding over the number of such deals and other issues contributed to the recent ouster of former Live Nation Chairman Michael Cohl.
“Our relationship with everyone at Roadrunner Records has been amazing throughout our career, and we look forward to continuing that same great relationship for the remainder of our recording commitment with them,” said Nickelback’s lead singer/rhythm guitarist Chad Kroeger in a statement. “With that said, the Live Nation deal helps us maximize the band’s opportunities in all areas of our career. We are extremely confident that Live Nation’s complete global team is the world’s finest, and we are excited to be a part of the Live Nation vision and future!”
Nickelback has sold more than 26 million albums worldwide with their most recent album selling more than 10 million units globally. They are a touring powerhouse and have built their fan base by relentlessly breaking into new markets with their live shows. Nickelback’s last tour, which visited North America and Australia in 2006-07, sold more than 1.5 million tickets and grossed in excess of $67 million.
“This deal with Nickelback will enable us to fully capitalize on our vertically integrated platform to connect the band with their fans, monetizing our unparalleled reach to drive revenues and increase overall margins,” Live Nation President and CEO Michael Rapino said in a statement. “This partnership is structured to increase our revenue and cash flow potential significantly, while reducing our risk profile. This investment is cross collateralized, spread over multiple years and comprises multiple business opportunities.”
Last Updated on July 8, 2008 by By Bob Grossweiner & Jane Cohen