The Bank Of America has said it would be foolish of Warner Music to try and compete with the $120 million Live Nation is reportedly offering Madonna for a ten year 360 degree deal which would see the live music conglom take on Madge's recording and merchandising as well as her touring.
The deal, which has been rumoured for a while but which the Wall Street Journal last week said was now imminent, would be a PR coup for Live Nation as it would see them entering the recorded music space through one of the world's biggest artists. But, while Madonna ending her career-long recording relationship with Warner Music would be a definite PR knock for the major, the Bank Of America says that the actual impact on the company would not be as high as some are saying, and certainly not worth paying more than $120 million to avoid, even if the record company did get a share of merchandise and touring revenues. Madonna is known to have been discussing a similar 360 deal with Warner, but commentators speculate that the Live Nation deal is now more likely to go ahead, and the Bank says the major shouldn't try to compete with the live music firm.
The Bank has described the Live Nation deal as "more of a bold statement by [the live music firm] that it wants to quickly get deep in the music business, and less an example of Warner Music's inability to close a good deal". They add that competing with Live Nation would see Warner overpaying an artist "that does not seem to be generating the revenue to support the contract being discussed".
With all that in mind, the Bank has maintained its buy rating for Warner's shares despite the expectation they are about to lose one of their highest profile artists (though, as previously reported, she is still to deliver one more album for the major).