Live Nation Climbs The Korn Stock
Singer Jonathan Davis and the rest of the nu-metal rockers signed a two-record deal with EMI for $25 million last year; in return, the record company got a reported 30 percent share of the band’s overall profits for the duration of the contract.
With record sales in their current state of woe, the deal is an example of how EMI is looking for new income – notably from concerts, merchandise and any other revenue stream outside its normal realm of influence. Meanwhile, the band’s See You On The Other Side had a recent, successful launch.
On January 11th, Live Nation grabbed a 6 percent piece of the pie for $3 million according to The New York Times; Korn’s management would not confirm the figures.
The agreement is simple: Live Nation bought into the Korn business in hopes of a profitable return at the end of the deal, which is of the same duration as EMI’s – two records. There’s no specific language regarding CD sales, merchandise or sponsorship deals, just plain ol’ profit sharing. Live Nation chief Michael Rapino is now on Korn’s “board of directors,” as it were, alongside EMI’s David Munns.
“There’s basically a pot and all the money goes into the pot. Then profits are distributed, like investing in a restaurant,” entertainment attorney and deal architect Gary Stiffelman told Pollstar.
Promotion is the second part of Live Nation’s deal, but Stiffelman and a representative for Kwatinetz’s company,
“The reason this makes sense is that the alliance, all three companies, believe the total will be bigger,” Stiffelman said. “The proof really is in what we’re seeing happen on the record. It’s doing better; there’s more attention being paid. We have a shot at the most success ever because we have really important players that have a vested interest in the success of the band in every area.”
The powerful entertainment attorney – who designed the deal structure with Kwatinetz – stressed that this model will probably not be the wave of the future because only a modicum of bands could fit its parameters.
“You have to have a band where each of the pieces is important. It wouldn’t work for
“At the top you eliminate bands where records are not important; for a baby band its hard to attach ancillaries when there’s no history.”
– Joe Reinartz