As Guy Oseary and Paul McGuinness prep a $30 million deal to merge their management companies under Live Nation, more details have emerged about the pair’s respective plans.
U2, McGuinness’ top client at Principle Management, is prepping a new album set for tentative release in April on Interscope. Danger Mouse has been producing the set, which was recorded primarily at New York’s Electric Lady Studios. Oseary has already been leading discussions in the advertising marketplace as the band seeks potential brand partners for a planned Super Bowl commercial announcing the new music.
According to executives familiar with the parties’ plans who spoke with Billboard, Live Nation’s deal to acquire Principle and Maverick is valued at $30 million, and has not been completed. Under the arrangement, McGuinness would become chairman of Principle Management, while Oseary will assume day-to-day management of U2, as he has already for several months, Billboard has learned.
In a statement to the New York Times, which first broke the news of the Live Nation deal, McGuinness said: "It could be seen as slightly poor etiquette for a manager to consider retiring before his artist has split, quit or died, but U2 have never subscribed to the rock and roll code of conduct. As I approach the musically relevant age of 64 I have resolved to take a less hands-on role as the band embark on the next cycle of their extraordinary career.
"I am delighted that Live Nation, who with Arthur Fogel have been our long term touring partners, have joined us in creating this powerful new force in artist management. I have long regarded Guy Oseary as the best manager of his generation and there is no one else I would have considered to take over the day-to-day running of our business.”
The two companies will be housed under Live Nation’s management arm Artist Nation, a division of the company that manages more than 200 artists but has notably lost money in the first three quarters of 2013. Revenues were down 13% during the first nine months of 2013 year-over-year, according to the company’s earnings released Nov. 5, to a total of $261.1 million this year versus $298.6 million in 2012.
Prior to the acquisition, Oseary and McGuinness had already done plenty of landmark business with Live Nation. In 2008, U2 inked a 12-year deal with the company that included worldwide touring, merchandising and its U2.com website, though with no rights to the band’s recorded music or publishing.
The year prior, Madonna inked a 10-year 360-deal with Live Nation encompassing new studio albums, touring, merchandising, fan club/website, DVDs, music-related TV and film projects and associated sponsorship agreements. Though Live Nation initially intended to exclusively release new music from Madonna, the company aligned with Interscope in 2011 for a three-album deal (valued at $40 million) beginning with 2012’s "MDNA."
Oseary has also maintained an office in Live Nation’s Beverly Hills headquarters for several years, though he spends most of his time working out of a home office at his estate in the Hollywood Hills.
The Maverick/Principle news comes on the heels of Scooter Braun’s $120 million fund to invest in a consortium of music management firms, using proceeds from a fund led by Overland Park, Kan.-based investment firm Waddell & Reed Financial. Braun’s initial partners include Drake managers Oliver El-Khatib Adel and “Future The Prince” Nur at October’s Very Own; Troy Carter and his Atom Factory clients John Legend, Lindsey Stirling and Priyanka Chopra; and Jason Owen, whose Sandbox Entertainment manages top Nashville talent like Shania Twain, Little Big Town, recent CMA winner Kacey Musgraves and rising Warner Nashville duo Dan + Shay. Those artists will join a roster at Braun’s SB Projects that already includes Justin Bieber, Ariana Grande, The Wanted, Cody Simpson and Martin Garrix.
Such recent waves of consolidation in the management space suggest efforts for thought-leading executives like Oseary, Braun and Carter (who appeared in a Billboard cover story this past April) to leverage their clients’ combined clout for better negotiations with digital service providers and more fluid investments. One source familiar with Braun’s plans said the management coalition’s model was focused on investing cash in the managers’ firms upfront so that artists could collect more revenues on the back-end.
“That money could then be used for artists’ revenue streams and new ventures,” the executive said.