Let’s hope we don’t see Live Nation asking for a bailout any time soon. After reports of their stock taking a plunge, the company’s coup over superstar touring and recording contracts has come to a screeching halt. Today Reuters reported Live Nation will have to compensate U2 for the loss of value in the band’s stock option of $19 million.
As part of U2’s contract with Live Nation, the band would receive $25 million worth of stocks in the company, but that was when things were looking up for the company. Today those stocks are only worth $6 million, so how will U2 be compensated for the difference? Cold hard cash.
Live Nation hopes to make back the money in U2’s next world tour, but even one of their CEOs sounds a little desperate. “We have a very long-term commitment with the band and we’re in the process of gearing up for their next world tour,” Garner told Reuters.
Garner’s probably praying Bono doesn’t get a torn ACL and have to call off the tour. If for some reason the band can’t go through with the shows, the U2 boys will spend 2009 at home counting their cash, while Live Nation employees will be in line at the dole office.