Today’s News: Live Nation wants to pay artists less

20 Sep

TicketNews reports that Live Nation, facing declining ticket sales, is seeking to cut costs by paying the artists it promotes less money.  At a Bank of America – Merrill Lynch Media, Communications and Entertainment Conference last week, Live Nation President and CEO Michael Rapino announced that the big, up-front paydays of the past to artists and their managers are over:

While artists might not be happy with the move – since most music acts generate the lion share of their revenues through touring – fans and Live Nation investors will likely cheer the plan because it could lead to lower ticket prices and improved profits. Earlier this month, influential media and entertainment analyst Ben Mogil with Stifel, Nicolas & Company lowered his rating of the company, in part because of concerns that Live Nation was spending too much on artist guarantees. The move led to an immediate sell off, and drop in price, of Live Nation’s stock, which trades under the symbol LYV.

“2011 will be less about growing market share and more about profitability,” Rapino said. He added that the company is looking to acquire more international artist management firms through its Front Line Management division to help grow Live Nation’s international business, particularly in Spain, France, Brazil and Latin America.

With artists relying more on live shows to offset lower sales of both CDs and digital downloads of their music, this move is certainly not going to be taken well.   It’s especially telling that Rapino announced this at an investors’ meeting, rather than through a normal press release or interview.  Live Nation uses a system of kickbacks and rebates to the venues and artists, taken out of the service fee, to “sweeten the pot” and convince them to sign long-term deals with the massive company.  By announcing that they want artists to take a smaller share (and really, only the biggest arena-packing groups, such as the Rolling Stones and U2, are getting these rebates), LiveNation is signaling that their current model needs to change in order to remain a viable business plan in an changed economy.

2 Responses to “Today’s News: Live Nation wants to pay artists less”

  1. alfiesaden January 4, 2012 at 5:00 am #

    hi – is it just me !! can any one explain why when i type in the bing browser “fanfueled.wordpress.com” i get a different site yet whe i type it in google its ok? could this be a bug in my system or is any one else having same probs ?
    alfies

    • fanfueledwill January 12, 2012 at 12:43 pm #

      Hey Alfies, thanks so much for flagging us on this. We’re currently looking into the issue and will have it resolved asap. I’ve tested fanfueled.wordpress.com into a variety of browsers and it seems consistent across the board, but we will continue to dig into it.

      Thanks,

      Will

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