NEW YORK (Reuters) - Canadian rock band Nickelback has signed a global recording, touring and merchandising deal with concert promoter Live Nation Inc that an industry source said was worth between $50 million and $70 million.
Live Nation announced the contract on Tuesday but did not give financial details.
The Nickelback deal is the latest in a string of high profile, multifaceted deals that the Los Angeles-based company has signed with major artists including Madonna, Jay-Z, U2 and Shakira.
Nickelback, whose last album sold 10 million copies, signed a three-album/three-tour deal with Live Nation, and will let the company to handle all merchandising, licensing, sponsorship, secondary ticketing, endorsements, DVD and broadcast rights, fan club, web site and literary rights.
But the band, fronted by Chad Kroeger, still has two albums and a greatest hits package left to deliver to its longtime label Road Runner Records before it records any albums for Live Nation.
This could make the Nickelback deal seem expensive for Live Nation if the band’s subsequent album sales fail to come close to the numbers it has delivered to date.
“It’s kind of tough to say if an artist’s best years are behind them,” said David Joyce, an analyst at Miller Tabak who has a “buy” rating on Live Nation.
Joyce said Live Nation will profit from the rights to the rest of Nickelback’s business, while also distributing the band’s music, which has become less expensive with the growth of digital music sales.
The deal between Nickelback and Live Nation could raise questions about the value of a deal Warner Music Group struck in December 2006 to buy a majority stake in Road Runner Records for $73.5 million.
Though Road Runner also has hard rock names like Slipknot, Megadeath and Stone Sour on its roster, Nickelback is easily its best known band, having sold more than 26 million albums.
Live Nation said Nickelback’s last North American and Australian tour in 2006 and 2007 grossed more than $67 million.
The company hopes to benefit from more international growth for Nickelback, particularly in Europe, where it expects strong touring sales growth.
Nickelback’s single “Rockstar” is the second-biggest selling song of the year so far in Britain.
Live Nation shares rose 11 cents, or 1 percent, to $10.00 in early trading on the New York Stock Exchange.
Reporting by Yinka Adegoke; Editing by Lincoln Feast and Derek Caney