Madonna: Like a business pioneer?

Times Staff Writer

Madonna, who long ago reshaped the definition of a pop superstar, now appears intent on redefining the traditional model of a record label, according to people familiar with a possible 10-year, $120-million deal that is under negotiation.

Reports have been circulating since June that the 49-year-old icon might walk away from her longtime label, Warner Music, to sign a comprehensive deal with Live Nation Inc., the concert promoter. That deal would have Live Nation not only selling her recordings and mounting her lucrative tours but also handling her merchandising, corporate sponsorship deals and the licensing of her name and image.

The deal is not signed, but last week Madonna's management told Warner that the singer would be bolting because the label had failed to match the offer made by Live Nation, according to someone close to the situation who asked for anonymity because he was not authorized to comment.

Madonna is under contract to deliver one more studio album and a greatest-hits package to Warner, which has handled her hits since the first one, "Holiday" on Warner's Sire imprint in 1983.

A spokesman for Beverly Hills-based Live Nation said Wednesday that there would be no comment from the company because there was no deal to discuss. The Wall Street Journal reported Wednesday that Madonna was "close to leaving" Warner and that the Live Nation deal included a general advance of $17.5 million as well as advance payments for three albums of $50 million to $60 million.

A source inside Live Nation on Wednesday expressed frustration with the report and its numbers and said it was premature to talk in specifics about a deal that was still up in the air. Liz Rosenberg, Madonna's spokeswoman, could not be reached for comment, and the singer's manager, Guy Oseary, did not return calls.

Two other sources close to the deal, however, confirmed the framework of a 10-year deal for $120 million.

Madonna is listed in the Guinness World Records as the most successful female musician in the world, and her live shows remain a potent draw; her 2006 tour racked up tickets sales of $86 million in North America alone. But her recent albums have not been blockbusters, which creates an element of risk for Live Nation. The company, however, has been pushing to broaden its reach, and with this sort of deal it could send a signal that it has a 21st century model for how the business of music could be handled after the tumult of the digital revolution over the last decade.

Last week, platinum-selling British band Radiohead, a free agent after leaving EMI Music, announced that it would be moving forward without anything resembling a conventional label. With the sales of CDs tumbling in recent years, other established music stars have also hinted that they may seek alternative paths. Music insiders say the chaos of the industry has retailers, Internet companies, management firms, promoters and even ticketing companies stepping into the breach to perform many of the traditional duties of a label.

Attorney Don Passman, who has represented artists such as Mariah Carey, R.E.M. and Tina Turner and written "Everything You Need to Know About the Music Business," said the weakened labels had been pushing for deals with newer acts that give the labels access to income streams they haven't traditionally dipped into, such as the act's concert touring. Now, the labels are seeing a push back in the form of Live Nation's overtures.

The major labels once had singular inroads to radio and bricks-and-mortar retail, but as those two sectors have narrowed, that advantage has become less vital.

"This is the first example of this sort and this scale," Passman said.

"Everything is going to get fuzzy. The roles are in flux. And the reason is the labels are weaker. The barriers to entry in the business are almost gone."

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