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Report: Offering 49-Year-Old Madonna $120M Doesn't 'Make Economic Sense'

By Fox News
Published | Updated

Is Madonna getting too old to rock?

The day after news broke that the 49-year-old pop megastar intends to sign a $120 million recording and touring deal with live entertainment promoter Live Nation Inc. and leave her longtime record label at Warner Music Group Corp., Warner Music issued a report explaining why she's not worth the money, Variety reports.

Click here to read the Variety report

The report, from Banc of America Securities, a Bank of America subsidiary, is titled "For $120 Million, She's All Yours." It argues:

  • There is "headline risk associated with a Madonna defection. However, the bigger risk would be to overpay for an artist that does not seem to be generating the revenue to support the contract being discussed."
  • Beside the fact that Madonna will turn 60 years old in the last year of the proposed 10-year deal, it is "fantastic" for her but does not "make economic sense" for WMG.
  • "Her loss will not meaningfully impact Warner's near-term sales."

The pop superstar's management informed Warner last week that she would accept Live Nation's offer after the record company refused to match the deal, said a person familiar with the contract negotiations.

Under terms of the proposed deal, Madonna would receive a signing bonus of about $18 million and a roughly $17 million advance for each of three albums, the person said. A portion of the compensation would involve stock, the person said.

Live Nation also would have to pay $50 million in cash and stock to promote Madonna's tours, according to the Wall Street Journal, which broke news of the deal on its Web site Wednesday afternoon.

Madonna first signed with Warner Music Group subsidiary Warner Bros. Records in 1984. Her last contract with the New York-based company calls for her to deliver one more studio album, expected next year, and a greatest hits record.

The singer has been among Warner Music's best-selling artists for years.

The Associated Press contributed to this report.