LOS ANGELES (Reuters) - Pop star Madonna is close to leaving her long-time Warner Bros. Records label for a wide-ranging $120 million deal with concert promotion firm Live Nation Inc., a source familiar with the talks said on Wednesday.

The story was first reported on the Wall Street Journal's Web site, which said Madonna would receive a mix of cash and stock in exchange for allowing Live Nation to distribute three studio albums, promote concert tours, sell merchandise and license her name.

Such a deal is virtually unprecedented, but may become more common as struggling record labels and other players in the music industry seek to shore up revenues by going into business with musical acts, rather than just taking fees for selling their albums or concert tickets.

A Live Nation spokesman declined comment. A source familiar with Warner confirmed the basic details of the report.

The 49-year-old singer has recorded for the Warner Music Group Corp.-owned label her entire career, stretching back to her 1983 self-titled debut album.

She still owes Warner Music a new studio CD and a greatest-hits package, a label spokeswoman said in August, when speculation of a tie-up with Live Nation first surfaced. Her last album, "Confessions on a Dance Floor," came out in 2005.

Live Nation's diversification from promoting concerts to entering complex business partnerships with music stars is a sign of the times in the ailing music industry.

As the traditional recorded-music industry fights a losing battle against Internet piracy and other forms of entertainment, the labels are eyeing other revenue streams, such as artists' touring and merchandising revenues. Ancillary players, such as concert promoters, talent managers and ticketing companies, also are in the hunt for such deals.

Warner Music reportedly sought to retain Madonna with a similar arrangement. In an unusual move, the company partnered with Barry Diller's IAC/InterActiveCorp, the parent of TicketMaster, to try to counter Live Nation's proposal, the Wall Street Journal said.

The paper, quoting people briefed on the Live Nation deal, said the package includes a general advance of $17.5 million and advance payments for three albums of $50 to $60 million. (Album advances are generally recouped from sales income.)

Live Nation also is expected to pay $50 million in cash and stock for the right to promote Madonna's concert tours. Although she does not tour much, she is a popular draw. She ranked No. 4 on trade publication Pollstar's list of the top acts in 2006, with North American ticket sales of $86 million.

© Copyright 2007 Reuters.

Photo:
Madonna performs during the Live Earth concert at Wembley Stadium in London, July 7, 2007. REUTERS/Stephen Hird