U2 Unloads Live Nation Stock

U2’s 12-year deal with Live Nation includes handing the band 1.6 million shares of Live Nation stock. It was a sign of good will when the deal was brokered in March, but U2 chose to dump the stock Wednesday and take $6.1 million in cash.

Live Nation promised U2 $25 million for the stock when the deal was struck. Since then, the value has dropped and the company owes the band the balance, which it will pay in cash on hand or borrowed money according to an SEC filing. The Wall Street Journal did the simple math and estimated the loss at $19 million. Live Nation Global Music President Jason Garner confirmed to Reuters it was an accurate estimate.

Photo: AP Photo / CP
Bono lets out a howl as The Edge looks on during U2’s performance at Toronto’s Air Canada Centre.

Next up is Madonna, the WSJ noted. She brokered a similar deal last October and is eligible to sell her stock for $25 million come April. The stock has plummeted 85 percent as it stands.

“Madonna and U2 are the only two deals that did contain this provision,” Live Nation CEO Michael Rapino told the WSJ. “The Madonna business is great, and we look forward to monetizing our investment in U2 next year.”

Photo: AP Photo
Estadio River Plate, Buenos Aires, Argentina

Madonna has had a very successful Sticky & Sweet tour and U2 is expected to release its 12th album with a supporting world tour next year.

To that effect, U2 manager Paul McGuinness told the WSJ, “We’re very much in business with [Live Nation] and we’re planning to tour in 2009.”

With the U2 tour and record, Live Nation will have an opportunity to make up its loss next year.