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Korn Nuts?

First came Bowie Bonds, which David Bowie used to cash out the future value of his catalog. Now, in a deal that’s a lot more risky for the investors, the band Korn has sold a piece of itself to a concert promoter. Gordon Smith’s read seems to be the prevailing one: It’s an innovative way for an artist to conceptualize its economic foundation.

It strikes me, though, that we should be focusing on the promoter (Live Nation) as well as on the band. Sure, Korn has bought Live Nation’s muscle and a measure of financial stability, but Live Nation may be getting even more muscle in return. Why isn’t this kind of deal being seen as a way for concert promoters to get some leverage in their fight against Ticketmaster? The old MAD magazine had great Spy v. Spy cartoons. The music business is coming down to Monopolist v. Monopolist.

And don’t forget the corporate law problems down the road. Live Nation looks an awful lot like a minority shareholder. Do band members own Live Nation any fiduciary duties? What happens if Korn decides to go in some new musical direction? What happens if Live Nation want the band to play its most popular stuff night after night, but the band doesn’t want to? And what about personnel changes? Good lawyering means that a lot of this stuff got covered in the contract, but even good lawyers sometimes forget to cover some obvious things.