As is being reported in The Wall Street Journal and elsewhere, music superstar Madonna, whose 2006 “Confessions” tour grossed $194 million, is shaking up the music industry:

In the latest seismic shift to rock the music industry, pop superstar Madonna is close to leaving Warner Music Group Corp.’s Warner Bros. Records for a $120 million deal with concert-promotion giant Live Nation Inc., according to people familiar with the deal. Madonna still has another studio album left to deliver with Warner Music.

The 10-year pact with Live Nation, of Beverly Hills, Calif., would give Madonna a rich mix of cash and stock in exchange for the rights to sell three studio albums, promote concert tours, sell merchandise and license her name.

Traditionally, acts like Madonna would release their recordings through a major record label and then make separate deals for touring and merchandising with other companies. Now, however, a range of players in the music business — labels, concert promoters and even managers and ticketing companies — are eager to make broad deals that give them a larger piece of the pie by participating in revenue streams such as endorsement deals between artists and advertisers, as well as the sales of concert tickets and merchandise.

Read the rest of the article for all the details, as they are known presently.

The New York Times notes the significance and implications of this pending deal for the music industry:

The deal, which was first reported yesterday on The Wall Street Journal’s Web site, is the latest example of how tough times for record labels and concert promoters have set off a free-for-all over the rights to the various revenue streams created when a musician becomes a star. Instead of sharing in only one piece of the income — say, CD sales — companies are angling to share in all of an artist’s business lines, like publishing, merchandise sales and endorsement fees.

It also comes as the major record companies are reeling from the loss of historically reliable brand-name acts. Word of Madonna’s likely exit from Warner Brothers, a unit of the publicly held Warner Music Group, came the same day that one of rock’s biggest free agent acts, the acclaimed British band Radiohead, started delivering digital copies of its new album directly to fans, in a big break with industry convention. Another influential free agent band, the Eagles, is selling its new album directly to Wal-Mart Stores.