Hardly a day goes by without a news article about how concert promoter AEG Live LLC is negotiating to sell a stake in itself to a major music recording label. The objective would be to mount a stronger challenge to Live Nation Entertainment Inc. (NYSE:LYV), the industry's linchpin by virtue of the deals that brought artist management, ticketing and concert promotion under one roof. But whoever's planting those stories must be aware by now that they'll never bear fruit.

That's because the major labels already participate in the touring revenue generated by their artists through "360-degree deals." These deals extend the recording contract a label has always maintained with an artist not just to touring but also to merchandising, e-commerce and any other revenue stream that the label and the artist -- working together and apart -- can generate. And so a tie-up between a label and AEG, the country's second-largest concert promoter, isn't nearly as enticing as it once was.

In fact, it's more likely to pose a conflict. At Warner Music Group Corp. (NYSE:WMG), for example, more than half of its active artists already have 360 deals. For those acts, any touring suggestions that WMG might present as a part owner of AEG would be suspect -- and, as WMG vice chairman Lyor Cohen points out in the July issue of Fast Company, the 360 deal involves a commitment by the label to be transparent in its dealings with artists. The article goes on to note that if WMG's current superstars had been governed throughout their careers by the 360 deals being struck today, the result would have been as much as 160% more revenue for WMG. Why risk all that for another modest cut of the concert gate?

Credit for the 360 concept belongs, ironically, to Live Nation. In 2007, as part of a quest for vertical integration, the dominant concert promoter embraced the one part of the music business from which it was at a remove. It signed Madonna to an all-inclusive 10-year partnership, thereby adding recorded music to its self-styled "full suite of services."

While big acts such as Jay-Z and U2 followed Madonna to Live Nation, the labels left behind by these acts also took to 360 deals. Only they did so with up-and-coming artists. And they burnished the concept in ways that, as never before, have artists and their labels working off the same page.

Live Nation, meanwhile, finds itself a house divided. Its artist-management division, headed by the irascible Irving Azoff, is blamed by many for the high ticket prices making a mess of the summer touring business. Its unrelenting quest for higher guarantees has the division directly at odds with Live Nation's concert-promotion and venue-operations division, which wants nothing more than to fill concert seats.

This is just the sort of conflict of interest that well-constructed 360 deals allow labels to avoid without compromising additional revenue streams. And all they have to do to remain conflict-free is not buy into AEG.