U2 Cashes In On Live Nation Stock

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.