Live Nation, which has seen its stock price drop precipitously this year, bought back about 1.6 million shares of its stock this week as part of its contractual agreement with the band U2. The deal was for $25 million, which represents about a $19 million loss due to what the stock is now worth compared to when the arrangement was reached.

The company’s stock trades under the symbol LYV, and as of about 3pm today, December 18, it was trading just above $4, up slightly from the $3.96 it closed at on Wednesday, making the 1.6 million shares worth about $6.1 million. Its 52-week high was $18.75, however.

At $25 million for 1.6 million shares, the two sides were figuring on a stock price of about $15.63. U2 plans to tour in 2009, so Live Nation will begin to recoup some of its investment then.

The U2 deal was one of several that the company signed in the past 18 months with top-shelf artists, such as Madonna and Jay-Z, but the largesse associated with the deals helped lead to the ouster of music industry veteran Michael Cohl, and could be considered one of the factors for why the stock price has fallen. The contracts were paid partially in stock, a gamble the company made thinking that its stock would stay strong.

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And according to the Wall Street Journal, Live Nation could face a similar hole in April 2009 when Madonna will be eligible to exercise the same type of clause in her contract for $25 million, but according to Live Nation President and CEO Michael Rapino, those two deals were the only ones with such a clause.

“Madonna and U2 are the only two deals that did contain this provision,” Rapino told the Wall Street Journal. “The Madonna business is great, and we look forward to monetizing our investment in U2 next year.”

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