AEG chief expects Live Nation, Ticketmaster break up

AEG Presents’ chief executive has told staff that he expects the Live Nation and Ticketmaster “monopoly” to be broken up following legal action begun last week by the Department of Justice (DOJ).

Jay Marciano outlined the case for the entertainment giant to be forced to divest Ticketmaster. He described the controversial “exclusive ticketing contracts” which see Live Nation-backed venues partner with Ticketmaster as the “cornerstone” of its business model.

Marciano’s words were included in an internal memo for AEG staff, which was accessed by Variety. AEG has long been an opponent of Live Nation and Ticketmaster’s position in the US live entertainment sector.

The DOJ lawsuit, backed by 30 states, was filed in federal court in Manhattan in May.

“AEG has long maintained that Ticketmaster has a monopoly in the US ticketing marketplace and uses that monopoly power to subsidise Live Nation’s content businesses, preventing other businesses from competing in those areas and leaving consumers to suffer the consequences,” reads the memo.

“As you know, the cornerstone of Live Nation’s monopoly is Ticketmaster’s exclusive ticketing contracts with the vast majority of major concert venues in the US.

“These agreements block competition and innovation and result in higher ticketing fees, denying artists the ability to choose who will ticket their shows and how much their fans should pay.”

Live Nation hits back at AEG

In response, Live Nation’s legal head Dan Wall told Variety that AEG’s support for the DOJ action is based upon its own self-interest.

“This is why antitrust protects competition, not competitors trying to use the courts to advance their own interests,” the executive vice president, corporate and regulatory affairs said. “AEG supports this case — indeed, begged DOJ to file it — because it doesn’t want to pay artists market rates or convince venues to adopt its second-rate ticketing system exclusively.

“Its complaints about service charges are hypocritical since it could lower AXS service charges today if it really cared about that. Self-serving arguments like these are common in antitrust cases, but rightly ignored.”

DOJ action

The complaint accused Live Nation and Ticketmaster of unlawfully maintaining monopolies in concert promotion and primary ticketing markets, while engaging in other exclusionary tactics.

The suit added that the “flywheel” is Live Nation-Ticketmaster’s self-reinforcing business model that captures fees and revenue from concert fans and sponsorship, uses that revenue to lock up artists to exclusive promotion deals, and then uses its powerful cache of live content to sign venues into long term exclusive ticketing deals, thereby starting the cycle all over again.

Attorney General Merrick Garland said in a statement: “We allege that Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators.

“The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”

Posted in LegalTagged | | |