Jay-Z and LiveNation: What this Deal Really Means

Jay-Z might be getting $150 mil. for his new deal with LiveNation but the partnership seems to be going much deeper. While Jay-Z has created many successful businesses, this new deal with put a full business partner on the back of Jay-Z. The deal means that for the next 10 years Jay-Z and Live Nation will be in full business with each other. LiveNation will get a percentage of any of Jay-Z’s businesses. So if Jay-Z where to sell the 40/40 Club chain Live Nation would get a payout from that sale.

But is this even a good deal? If Jay-Z is widly successful with a new business venture it could mean easily returning the investment to Jay-Z. But LiveNation isn’t really know for doing good business or making lots of money. The company is in debt of $822 mil and the current share price for the stock is $13.

So does Jay-Z have enough mojo to make this deal work?

Here are some terms of the deal:

$25M: Overhead for 5 years
$25M: “Available to finance Jay-Z’s acquisitions or investments”
$25M: Upfront fee
$25M: Advance for current tour
$30M: $10M per album advance for 3 albums over 10 years
$20M: “Certain publishing, licensing and other rights”

Maybe LiveNation is on crack?