Universal Music and Live Nation form artist management joint venture
Universal Music Group, the largest music company in the world, is forming a joint venture to manage musicians with Live Nation Entertainment, the world's biggest ticketing, concerts promotions and artist management company.
The deal puts together Universal's small cluster of four management companies under Live Nation's Front Line Management Group, whose 90 executives manage 250 artists, including the Eagles, Jimmy Buffett, Kenny Chesney and Christina Aguilera. Under the agreement, Front Line will oversee the joint venture.
"We see tremendous opportunities to work together to create a broad range of products built on the power of music," Live Nation's chairman Irving Azoff said in a statement.
By giving Live Nation control and co-ownership, Universal hopes to capitalize on Azoff's expertise with artist management. In exchange, the Beverly Hills live entertainment giant promises to help promote Universal's up-and-coming bands and find ways to bundle concert tickets with music sales through Live Nation's Ticketmaster operations.
"We are creating a series of new platforms and global direct-to-consumer initiatives that will further expand the presence of our artists in the evolving marketplace while providing music fans with even more flexibility in how they consume music," Lucian Grainge, chief executive of Los Angeles-based Universal Music, said in a statement.
Universal, whose primary business is music recording and publishing, got into the artist management business in 2007 when it acquired Sanctuary Group, a British company that promoted concerts, sold band-related merchandise and managed bands.
As part of the Sanctuary deal, Universal inherited Trinifold -- a management firm that handled The Who, Robert Plant (pictured, left) and Judas Priest, to name a few -- as well as Twenty-First Artist, which once managed Elton John and Lily Allen.
The joint venture with Live Nation will also include Universal's 5B Artist Management and its roster of heavy-metal bands, including Slipknot and Stone Sour.
"This is just a matter of Universal handing off its management assets to Irving while retaining a share of the business going forward," said Bob Lefsetz, a Los Angeles music industry analyst. "Irving knows how to operate this sort of business, whereas this is not Universal's core expertise."
Neither party would estimate the revenue of the combined venture. Universal does not break out its financial results from its artist management business, which is relatively small compared to its recording and publishing operations.
Live Nation's Artist Management division, which includes Front Line, posted $118.4 million in revenue, or roughly 11% of the company's total revenue, in the second quarter ended June 30.
-- Alex Pham
Correction: This post corrects a previous error regarding the current management of Elton John and Lily Allen. Both were with Tweny-First Artist but are now represented by Rocket Music Entertainment Group.
Top photo: Irving Azoff, chairman of Live Nation. Credit: Jonathan Alcorn / Bloomberg
Bottom photo: Robert Plant at a concert in August in Germany. Credit: Britta Pedersen / EPA