Hey, guess what? Music-business stocks are only doing poorly, as opposed to piss-poorly! Shares of Warner Music Group and Live Nation, both of which have taken hits lately, have sort of risen from their recent doldrums; WMG saw a five percent day-to-day increase at the end of yesterday’s trading, while LYV rose “as much as nine percent” during the course of yesterday. Media attention helped out WMG, which was called the best-performing media stock of 2008 by the New York Post earlier this week. That’s because the stock price, despite the company taking a beating from industry observers, has rebounded 34% from the $5 mark it was at when this year rang its opening bell. (Of course, the stock’s current “good” price is way off the stock’s highwater mark of $29.48. I thought people who traded stocks were supposed to know how to read through slightly fishy math?) Meanwhile, one of the explanations for Live Nation’s uptick seems a little fishy to these eyes.
Investors had been concerned that Live Nation was paying too much to sign big-name artists such as Madonna and Jay-Z, but the company recently spent time explaining to Wall Street that such comprehensive deals are paid over the term of the contracts — typically 10 years — rather than huge upfront cash payments.
“They’re part of the music industry that is profitable for the artists — touring,” said David Joyce, an analyst at Miller Tabak. “What’s fundamentally important is they’re continuing to say they’re not seeing any effects of the economic downturn on concert ticket sales.”
“Continuing to say,” eh? I guess all the people working at David Joyce’s company have been quietly unsubscribed from the e-mail lists announcing Live Nation’s “fun” $10-a-ticket fire sales. Too bad, David–I’m sure you would have really enjoyed seeing 311 for cheap!