Wednesday, January 11, 2006
Korn Sells a Stake in Itself
Submitted by VictorM:
The full article can be found here.
LOS ANGELES, Jan. 10 - When the hard-rock band Korn hits the road in the coming weeks to promote its new album, it will be performing not simply a string of gigs but a running experiment in music-industry finance.
Today Korn is expected to announce an unorthodox deal with the nation's biggest concert promoter that advances the band's strategy of turning itself into an investment vehicle and redefining how the revenue pie is split in the music business.
Under the terms of the arrangement, Live Nation Inc. will share far more than is typical for a promoter, which normally receives a cut of the band's box-office sales but little else. Instead, the company is paying roughly $3 million for an estimated 6 percent stake in the band's box office, licensing, publishing, merchandise and CD revenue for its recently released album, "See You on the Other Side," and its next album, music industry executives involved in the deal say. Live Nation will also be the exclusive promoter of Korn's concerts in the United States.
"We really are stepping 50 feet back and looking over the next four to six years at the profitability of the overall Korn business," said Michael Rapino, chief executive of Live Nation. "It's new ground for all of us."
The full article can be found here.
LOS ANGELES, Jan. 10 - When the hard-rock band Korn hits the road in the coming weeks to promote its new album, it will be performing not simply a string of gigs but a running experiment in music-industry finance.
Today Korn is expected to announce an unorthodox deal with the nation's biggest concert promoter that advances the band's strategy of turning itself into an investment vehicle and redefining how the revenue pie is split in the music business.
Under the terms of the arrangement, Live Nation Inc. will share far more than is typical for a promoter, which normally receives a cut of the band's box-office sales but little else. Instead, the company is paying roughly $3 million for an estimated 6 percent stake in the band's box office, licensing, publishing, merchandise and CD revenue for its recently released album, "See You on the Other Side," and its next album, music industry executives involved in the deal say. Live Nation will also be the exclusive promoter of Korn's concerts in the United States.
"We really are stepping 50 feet back and looking over the next four to six years at the profitability of the overall Korn business," said Michael Rapino, chief executive of Live Nation. "It's new ground for all of us."
