U2’s stock option deal with Live Nation will cost the concert giant $19 million: The band has moved to sell the 1.6 million shares they acquired in their 12-year deal with the company. U2 was guaranteed $25 million when the contract was signed in March, when the shares were worth $25 million. With Live Nation stock slumping to only $3.91 a share as of yesterday, the 1.2 million shares is only worth about $6.3 million. Thus, Live Nation will have to cover the additional $19 million that was promised to the band.
Madonna struck a similar deal with Live Nation in October 2007, but the stock has plunged 83 percent since the deal. The Material Mom can start selling her shares in April ’09, and Live Nation will once again have to cover the $25 million. Madonna’s Sticky & Sweet Tour profits more than make up for what they’ll owe the Material Girl, however, and Live Nation expects the same when U2 tour behind their new album next year. “The Madonna business is great, and we look forward to monetizing our investment in U2 next year,” said Live Nation chief executive Michael Rapindo.