U2 Cashes In On Live Nation Stock

Videos by American Songwriter

Videos by American Songwriter

Event promotion giant Live Nation set in motion some of the most lucrative deals with artists in recent years, cherry picking upper-echelon star acts such as U2 and Madonna with contracts often in the $100-plus million range.

Event promotion giant Live Nation set in motion some of the most lucrative deals with artists in recent years, cherry picking upper-echelon star acts such as U2 and Madonna with contracts often in the $100-plus million range. As the company’s stock has waned this year, however, U2 has decidedly pulled the rug out from underneath the deal by cashing in $6.1 million in Live Nation shares originally set at $25 million. The band’s 12-year contract with Live Nation signed in March had included a portion of stock, which by 2007’s projections had assets pointed at $2.75 billion, that was given over as an act of good faith in the company’s future. As it stands, though, Live Nation will now have to swallow nearly $19 million in losses.

For now, Live Nation is taking the hit in stride following a SEC filing Wednesday that they would pay the balance in cash or loans. Besides, with U2’s pending album that is apparently receiving its final touches and a full-blown tour scheduled for 2009, the company likely won’t be seeing red any time soon.

However, with Madonna’s $25 million in stock up for grabs this April, it may be that Live Nation will be facing yet another loss as her shares have plummeted 83 percent since their $120 million contract made in October 2007. The superstar’s “Sticky & Sweet” tour that is right now passing through South America is seeing sold-out performances that should more than recoup any potential stock losses. That is if the three other artists – Jay-Z, Nickelback, Shakira – who had such provisions etched into their contracts as well don’t follow suit and pull out prematurely. With so much money exchanging hands, it’s a difficult prognostication to say the least, but for all its pitfalls, likely not a grim one.

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