With the news this morning that Madonna is potentially leaving Warner Music Group (NYSE: WMG) for tour promoter Live Nation (NYSE: LYV), the future of the record industry is again being questioned. In the wake of English band Radiohead's self-release online of its seventh album, any move away from the record industry is demanding notice. A move to a tour promoter with album and merchandise opportunities only gives artists more control over their product, as opposed to making numerous deals with separate entities.

The Wall Street Journal's article cites that "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." That very sentiment spells doom for the record industry as the "newer" entities that enter the album-making business make offers that are often better than the deals the record labels offer.

The possibility of Madonna moving from Warner Music is only the most recent in a long line this year of successful artists moving from the big labels, but so far the question has revolved around embracing new technologies like the digital market. Paul McCartney shook up everything back in March when he moved from the Terra Firma-held EMI to Starbucks' (NASDAQ: SBUX) Hear Music, seizing on a market that had primarily been used for selling compilation CDs. McCartney's Memory Almost Full sold extremely well and catapulted him into the digital world. Radiohead's In Rainbows is this year's other strong case, though exact sales numbers are not available yet (however, the album's download site did get overloaded yesterday).

But the problems that face label groups like Warner and EMI are not limited to those companies. The entire business model for the music industry is being redrawn and recreated, but not by the labels. As the cases of Madonna, McCartney, and Radiohead illustrate, the artist is taking control of an industry that has long abused its power.

The management at GE (NYSE: GE) is once again considering the future of its NBC Universal entertainment business. According to the FT, the matter will be reviewed after the Beijing Olympics. The reason for that is profits. "The games allow GE to boost sales of its aviation, medical technology and other businesses in China. GE is forecasting $500m in extra sales from Olympics-related contracts, excluding NBC," the FT writes.

Wall Street analysts believe that NBC Universal may be worth as much as $40 billion. GE would have tax considerations if the unit was sold or spun-off as would its public shareholders.

But, the entertainment unit has been a financial dog. It usually performs worse that the overall GE numbers, which means that is probably pulling down the parent's overall valuation. GE has become known for its financial services, medical, and infrastructure businesses. The chorus about how NBC does not fit in goes on and on.

A spin-out or sale of the unit may not make the most sense. NBC may be worth more in pieces. It broadcast unit, stations, cable programming, and studios really are discrete operating entities. Selling them to the highest bidder may be the best way for GE to make money.

Douglas A McIntyre is a partner at 24/7 Wall St.

Madonna is on her way out the door at Warner Music Group (NYSE: WMG). She is being drawn away by a $120 million, ten year offer from Live Nation (NYSE: LYV), the large concert promoter.

Under the terms of the deal, according to The Wall Street Journal, Madonna will make three albums with the concert promoter. Live Nation will also promote merchandise and the licensing of her name.

Several industry observers say that Live Nation cannot make its money back on album sales. It would require close to 50 million units. But, by making money on other lines of business, like sponsorship of tours, the company may well be able to make a profit.

Warmer Music Group probably decided that the deal did not make economic sense and let Madonna go. But, that would be short-sighted. With CD sales falling and more revenue coming from digital downloads, WMG shares have lost almost two-thirds of their value in a little over a year. The stock now trades just above $11.

Digital sales do not yield music publishers as much per song as CDs do. Warner has to come up with some other way to make money. Taking a chance on Madonna's concert sales and sponsorships would have been a good first step out of a hole for Warner. But, they did not take it.

Douglas A. McIntyre is a partner at 24/7 Wall St.

In spite of the private equity slowdown, deal makers continue to seek value in fashion. According (subscription required) to The Wall Street Journal, "In August and September alone, designers Betsey Johnson and Matthew Williamson both sewed up deals with outside investors. NRDC Equity Partners, which owns Lord & Taylor, bought a stake in designer Peter Som's business for what was believed to be less than $10 million. Kenneth Cole Productions bought sportswear brand Le Tigre, and jeans maker Citizens of Humanity bought menswear brand Robert Talbott Inc."

You have to wonder if these firms are getting in over their heads. Fashion is a notoriously fickle industry, providing none of the reliable returns and stable growth that buyout shops typically seek. Sure, a lot of the deals will work out great but there will be a disproportionate number of fashion buyouts that end in big writeoffs as the brands acquired lose their cache.

For a fashion company that looks cheap and could possibly be in buyout territory, check out BloggingStocks writer Kevin Kelly's take on Steven Madden (NASDAQ: SHOO).

Sirius Satellite Radio Inc. (NASDAQ: SIRI) and XM Satellite Radio Holdings Inc. (NASDAQ: XMSR) surged yesterday after Citigroup analyst Eileen Furukawa estimated that the proposed multibillion-dollar merger has a greater than 60% chance to succeed. The analyst believes regulators have shifted in favor of the merger and that the market, currently giving the deal only a 24% chance of passing regulatory muster, is underestimating the chances and is too bearish. Furukawa has upped XM's price target to $19.50 from $15.

Still, if the merger goes through, Furukawa estimates it could produce up to $7.2 billion in cost savings and further, this estimate might be conservative as it does not include capex savings. In addition, the merged company could drive higher ad revenues and move away from the subscriber-based model into the ad-revenue one that seems to be where many believe the money is, especially as the early subscriber growth both companies experienced has cooled.

If the merger indeed succeeds and the cost savings are achieved, there may be a chance the combined company could rediscover the earlier growth it once witnessed. As Dana Cimilluca of the WSJ Deal Journal notes, this cost savings is bigger than XM's market cap of $4.67 billion, so no wonder both companies and their shareholders pushed the merger forward so passionately. They know what might happen if the merger doesn't go through.

One last comment on this. Contrary to Furukawa, Jonathan Jacoby of Banc of America Securities thinks that the stocks' recent prices actually imply that investors think there is an 85% chance of the merger succeeding. I'm not sure what could explain such a big difference in the two opinions, but I do know what mine has been all along and why I'm in trouble with many satellite fans. I do believe these to be too risky for their potential upside and I'm staying out.

Tuesday, SIRI shares closed up 3.77% to $3.5799 and XMSR shares up 6.87% to $15.24. Today, XM shares are cooling a bit, down over 1% to $15.08, while Sirius shares are continuing to climb, up more than 3% to $3.69 by midday.

AT&T, Inc. (NYSE: T) will buy about $2.5 billion in wireless airwaves from the privately held Aloha Partners, according to the nation's largest wireless carrier. The additional airwaves will give AT&T 72 of the top 100 markets for wireless service in the 700 Megahertz radio spectrum, with a potential of serving 196 million customers in 281 markets.

This is probably an effort to head off pressure from Google, Inc. (NASDAQ: GOOG), which has expressed pretty strong interest in the same radio spectrum as part of its plan to create a new way of providing wireless services to customers. The idea is to allow customers to buy any device designed for that radio spectrum and use it on any carrier that wishes to provide service. Right now, U.S. wireless carriers have a death grip on the wireless handset market and frequently lock customers into their own networks, shoddy phones and all.

Aloha was planning on rolling out a mobile television service using those airwaves and was in testing in the Las Vegas area, but apparently the AT&T offer was too tasty. What is unknown now is if AT&T will participate in the upcoming 700 Megahertz airwave auction that Google wants to dominate (if certain conditions are met).

The Hershey Company's (NYSE: HSY) turmoil continues. After a continued decline in net income and stock price, the board, controlled by various Hershey trusts, announced yesterday its intent to take the steps necessary to reverse the trend.

The company has suffered an unfortunate coincidence of declining sales at the same time it is making a heavy investment in a new plant in Monterrey, Mexico. Ironically, the board killed a potential sale of the company several years ago, partly in response to fears that massive job losses in its American manufacturing plants might result.

Since then, the board has become more aggressive, while maintaining its firm intent to remain in control of the company. The Wall Street Journal's Julie Jargon [subscription] today reviewed the oft-speculated possibility that one of the companies that bid on Hershey's in 2002, Cadbury Schweppes PLC (NYSE: CSG), might split off its candy business and merge it with that of Hershey's. For such a deal to work, however, one of two things need to happen. Hershey could buy that portion of Cadbury Schweppes, which would require it to take on a heavy debt load that would be hard to justify given its recent performance, or the Hershey board will have to change its mind about selling off the business.

Given Hershey's new manufacturing capacity, such a merger makes even more sense in terms of production and logistics. Not coincidentally, the company announced last week that CEO Richard Lenny will retire at the end of the year. Look for the board to hire a new CEO who can find a way to structure such a deal.

It must have been hard for cautious executives to sit back and watch during the buyout boom, but it's looking pretty smart now: With the credit markets dried up, heavily-leveraged firms are finding themselves in a precarious position. Private equity firms are struggling to close deals they agreed to, watching some fall through, and wondering how a lot of the other ones will pan out.

But CEOs of publicly-traded companies who didn't get into the easy money game -- avoided excessive buybacks and stupid acquisitions -- are in a great place now: They have plenty of cash to scoop up bargains, and don't have to compete with any army of private equity firms like they would have had to a few months ago.

As Benjamin Graham and later Warren Buffett have often said, being fearful when others are greedy and greedy when others are fearful is the key to success in business.

Now that the private equity firms are getting fearful, it might be time for more strategic buyers to get greedy.

One of the largest gold mining companies in the world, Newmont Mining (NYSE: NEM), has announced that will be taking over Miramar Mining Corp. (NYSE: MNG) for around $1.53 billion.

Newmont, which is currently the world's second largest gold producer, has had partial ownership of MNG since 2005 when it acquired a 9.9% stake in the company after investing $36.4 million in a Canadian gold field known as the Hope Bay gold belt. Miramar's board has unanimously agreed to Newmont's take over bid and will be recommending that the company's shareholders approve the deal.

Shares of MNG have been soaring today on the announcement. After closing yesterday at $5.15, the stock has sky rocketed today, picking up 22.5% to $6.31, up $1.16. Newmont shares have also been rising today, picking up 2.0% to $45.73, up $0.90.

Full details on the takeover will be made available by the end of this month.

Beer giants SABMiller (OTC: SBMRY) and Molson Coors (NYSE: TAP) took a huge step toward grabbing market share in North America by announcing today their intention to combine U.S. operations into a new company, MillerCoors. The new entity will start with combined U.S. sales of of 69 million barrels of suds, net revenues around $6.6 billion and combined EBITDA of $842 million. The companies expect combined production and distribution to lop off around $500 million from the annual expense side within three years. SAB and TAP also expect the move to boost both companies' EPS within the second year after integration is complete.

Voting interest in MillerCoors will be split 50/50, and the new company will be chaired by Peter Coors of Molson Coors. SABMiller, the larger of the two, will have a 58% financial interest.

Before the bell: Stocks poised for higher start

Yum Brands (NYSE: YUM) reported 17% growth in third-quarter profit, despite a mere 1% growth in U.S. profits. Profits in its China division grew 28% and international division profits were up 21%. Overall, net income rose to $270 million, or 50 cents per share beating expected earnings of per share of 45 cents. Yum shares climbed $1.94, or 5.7%, to close at $36.29 yesterday ahead of the results and continued to gain in after-hours trading.

After crossing the $600 threshold in yesterday's session, Google Inc. (NASDAQ: GOOG) continue to climb in premarket trading. The search giant will likely continue doing what it does best and that is to monetize its assets. Google is scheduled to announce tomorrow that it will begin showing YouTube videos on thousands of other Web sites, hoping to profit from ads attached to the clips. The ads accompanying the YouTube clips will appear as a graphic straddling the video or as a link along the bottom.

Deutsche Bank downgraded Coca-Cola Co. (NYSE: KO) to Hold from Buy, citing valuation after shares have appreciated 22% since March. PepsiCo (NYSE: PEP) received a similar downgrade from Buy to Hold at the broker. KO shares are down half a percent in premarket trading.

Ford Motor Co. (NYSE: F) reported its sales in China for the first three quarters of the year and the growth has been considerable at 30%. Sales of Ford brand vehicles, grew 27%, sales of Changan Ford Mazda, the three-way tie-up among Ford, Japan's Mazda Motor Corp and Changan Automobile Co Ltd, were up 59% and sales of the hot-selling mid-sized Focus sedan, rose 69%. Premium brands sales were up 72%.
Ford has also announced it and Mazda Motor Corp will build a second, $500 million plant in Thailand to produce 100,000 cars a year to meet the region's growing demand for small cars.

Yahoo Inc (NASDAQ: YHOO) will buy 10% of a share sale by Alibaba.com Ltd, China's biggest e-commerce firm, as it steps up a battle with Google and Baidu (NASDAQ: BIDU) in the world's second-biggest Internet market. Yahoo already has a 40% stake in the Chinese firm's parent, Alibaba Group.

MarketWatch reports on continued speculation that Pfizer Inc. (NYSE: PFE) is eyeing the purchase of a stake in Sanofi-Aventis (NYSE: SNY) or even a full takeover. Sanofi-Aventis shares rose 1.8% in premarket action.

Well, that didn't take long. Hackers have cracked the new update Apple Inc. (NASDAQ: AAPL) has implemented in the iPhone and iPod Touch. Third party applications access and other hacks have been reported. And the shares continue to climb, after another record close when AAPL shares gained 4% yesterday, they continue the gains this morning, up 1.2% in premarket action.

As they resigned from their executive positions in Skype, co-founders agreed that eBay (NASDAQ: EBAY) had indeed overpaid for the internet telecom group.

After a quiet Columbus Day yesterday, U.S. stock futures were indicating a higher open for U.S. markets this morning ahead of the unofficial kickoff to earnings season and the release of the minutes from the Federal Reserve's last meeting. The departure of Sprint Nextel's CEO is also in focus.

Yesterday, U.S. stocks ended mixed to lower along with oil and gold prices. Still, the tech sector showed resilience with Google (NASDAQ: GOOG) crossing $600 and hitting a record high and RIM continuing its climb. All in all, The Dow Jones Industrial Average fell 22.3 points, or 0.16%while the Nasdaq Composite added 7.05 points, or 0.25% and the S&P 500 fell 5.01 points or 0.42%.

At 2:00 p.m. this afternoon, the minutes of the last Federal Reserve meeting will be released. Investors will no doubt want to know more about the meeting the Fed had decided to cut its benchmark rate by half a percent. Investors will want to find clues as to further rate hikes.
There are no other economic data due today.

Overseas, Asian markets were mixed and European stocks, which were lower earlier today, are now mostly in positive territory.

Oil prices dropped further today after Royal Dutch Shell said it will boost production from an oil terminal in Nigeria. The dollar's recovery also weighed on prices. Oil fell below $79 a barrel.

Today Alcoa Inc. (NASDAQ: AA), being a component of the Dow industrials and the S&P 500 kicks off third-quarter earnings season when it reports after the close. Earnings at the aluminum producer are expected to have increased at a modest pace of 5% to post earnings of 65 cents a share. Sales are forecast to fall 3% to $7.4 billion, according to a survey of analysts polled by Thomson Financial. Traders will be watching the results to get insight on how corporate profits are holding up amid the economic slowdown.

After being the focus of investor and analyst anger for some time, Sprint Nextel Corp (NYSE: S) CEO Gary Forsee has resigned. Despite what might be good news to investors, Sprint shares are down about 0.8% in premarket trading. No doubt the stock will continue to reflect the company's instability and current lack of proven strategy to improve its standing among wireless carriers.

SLM Corp (NYSE: SLM) -- Sallie Mae -- has filed a lawsuit to force its buyers to go through with their original $25 billion deal or else pay a $900 million breakup fee in response to their reduced buyout offer.

It may not seem like much that a Chinese bank not well-known in America is buying into a medium-sized US bank. But it is of interest because it has never happened before and perhaps is the beginning of a wave

According to the FT, "China Minsheng Bank is set to become the first mainland institution to invest in a US bank after striking a deal to acquire 9.9 per cent of San Francisco-based UCBH Holdings (NASDAQ:UCBH) for over $200 million." The paper speculates that there will be many more of these deals to come. The Chinese banks are flush with cash, and the big US market is attractive. The paper adds that Beijing-based Minsheng has never been state-owned. It was founded by a group of investors in 1996, and was the first private Chinese bank to list on the Shanghai stock exchange.

The deal would appear to be mundane because of its size, but it opens the question of whether Chinese banking companies can buy into any US bank. If so, how much can they own? Is a bank strategic to US interests the way that a defense contractor would be? Should the US government have any role in approving banking deals?

The answers goes to the heart of whether US markets are truly free markets, or can the US government determine that on a case-by-case basis.

Probably no one will care about the UCBH deal, but what if a Chinese bank wants 5% of Citigroup (NYSE:C).

Saudi interests already own a piece of Citi, so why shouldn't the Chinese?

Douglas A. McIntyre is a partner at 24/7 Wall St.

Sallie Mae (NYSE: SLM) is sick of having sand kicked in its face by its potential buyer, JC Flowers, and Flowers' banks.The private equity firm that agreed to pay $25 billion for the student loan company has come back with a lower price, claiming that Sallie Mae's financial future has gotten much worse. Now, Sallie Mae is suing to get its break-up fee of $900 million

According to Reuters, "The suit seeks a declaration that Sallie Mae may terminate the merger agreement and collect the damages, that the buyer group has repudiated the merger agreement, and that no material adverse effect has occurred." SLM is arguing that there has been no meaningful change in its business since Flowers made its offer. The buyout firm and its banks make the case that legislation slashing subsidies to student lenders and a serious credit squeeze have cut Sallie Mae's value. Flower's banks are JP Morgan (NYSE: JPM) and Bank of America (NYSE: BAC).

The move by SLM may usher in a new wave of litigation as private equity buyers walk away from buyouts that they no longer think make financial sense. If Sallie Mae can win in court and collect its $900 million, a number of legal actions could follow brought by public companies that watched buyouts fall apart.

While it may seem odd, it is possible that the legal system will slow buyouts as much as the current credit crunch.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Speaking seven languages, Vivian Lewis travels the world to uncover ideas for her Global Investing newsletter. She also monitors research from leading investment firms around the globe to add to her analysis.

To support her own bullish outlook on Israel-based Alvarion (NASDAQ: ALVR), she cites analyst Ehud Eisenstein of Oscar Gruss, who speculates that the firm could be a takeover target for Cisco (NASDAQ: CSCO).

Lewis explains, "Oscar Gruss did an update on WiMAX solutions company Alvarion, in which it reiterated its 'Buy' rating and raised its target price to $17 per share from $13. The analyst also seems to think it really can be a target for a Cisco Systems takeover bid.

"Eisenstein writes, 'Alvarion continues to lead emerging WiMAX. Our recent visit to the WiMAX World Conference in Chicago, and a comprehensive session with Alvarion management, lead us to believe that the WiMAX industry continues to make important strides, and Alvarion is well-positioned to maintain its leadership position in that space.'

"He continues, 'Management addressed their key technology differentiators, namely: greater cost-to-performance ratio, higher radio combinations, vendor agnostic approach, and the broad installation base.

"The Oscar Gruss analyst notes, 'We view Alvarion as a clear growth name. First, of the 200 WiMAX vendors who participated in WiMAX World last week, Alvarion is the only pure-play public company positioned to play the expected growth in WiMAX subscribers.'