Ticketmaster’s Exclusive Deals Are ‘the Cornerstone of Live Nation’s Monopoly,’ AEG Chief Jay Marciano Says in Internal Memo

Ticketmaster’s Exclusive Deals Are ‘the Cornerstone of Live Nation’s Monopoly,’ AEG Chief Jay Marciano Says in Internal Memo

Live Nation is a monopoly that likely will be broken up as a result of the Department of Justice’s antitrust lawsuit filed last week, says Jay Marciano, CEO of AEG Presents, in an internal memo obtained by Variety. AEG Presents is the world’s second-largest live-entertainment company and Live Nation’s chief competitor.

“AEG has long maintained that Ticketmaster has a monopoly in the U.S. ticketing marketplace and uses that monopoly power to subsidize Live Nation’s content businesses, preventing other businesses from competing in those areas and leaving consumers to suffer the consequences,” Marciano wrote in the memo, which was circulated to staff early Friday morning and appears in full below. “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 United States. 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.”

The long-expected lawsuit finally arrived last Thursday, with the United States Department of Justice suing Live Nation and Ticketmaster for violations of the Sherman antitrust act, a move that could change the shape of the multibillion-company that is the world’s largest live entertainment organization. Live Nation fully owns Ticketmaster, North America’s biggest ticket vendor.

The complaint claims that the company has a monopoly on ticketing through Ticketmaster, and that it illegally uses monopoly power to dominate the ticketing business and quash competition. However, it should be noted that other ticketing companies, including AEG-owned AXS, have exclusive contracts with venues as well, although not at the scale Ticketmaster does.

“It is time to break it up,” said attorney general Merrick B. Garland in a press conference.

Marciano’s memo appears in full below; in response, Live Nation’s Dan Wall said in a statement: “This is why antitrust protects competition, not competitors trying to use the courts to advance their own interests. 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.”

No doubt all of you are closely following the ongoing media coverage in the wake of the Department of Justice lawsuit against Live Nation and Ticketmaster. As I mentioned in my note from last week, we spent the last few days carefully reviewing the DOJ filing, as well as Live Nation’s subsequent response to the complaint.

AEG has long maintained that Ticketmaster has a monopoly in the U.S. ticketing marketplace and uses that monopoly power to subsidize Live Nation’s content businesses, preventing other businesses from competing in those areas and leaving consumers to suffer the consequences. This lawsuit is not simply DOJ suing to break up a monopoly; at stake is the entire ecosystem of our industry, one that has long suffered from a badly broken ticketing model. 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 United States. 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.

Following the DOJ filing, Live Nation issued several public comments in service of its ongoing strategy to maintain its dominance – unfairly blaming others for industry problems they have created, making false and misleading statements, and dismissing the significance of the case. Artists, venues, and brokers are not responsible for the broken live entertainment business model in this country – that responsibility lies with Live Nation. Notwithstanding its claims about its profit margins or its market share, it is a monopoly, and it uses its monopoly power to impose its will on the live entertainment business. Live Nation may claim that its margins on promotion are low, but that’s only because it deploys the excessive profits of its ticketing monopoly to outspend what the concert market can profitably sustain. Live Nation does this with the goal of removing competitors from the business and in turn using its continued control of content to preserve a stranglehold on ticketing through venue exclusives.

The DOJ’s case is serious and reflects widespread sentiment among 30 attorneys general from across the country, numerous media outlets, industry commentators, consumer groups, and antitrust experts that Live Nation’s conduct violates the law and harms competition and consumers. While it may take some time, we strongly believe that DOJ’s lawsuit will succeed and ultimately bring sweeping changes resulting in increased competition and more innovation and choice that benefits fans, artists, and our entire industry. DOJ’s lawsuit means that artists will have a choice in who tickets their concerts, that the ticketing fees consumers pay will be lower, and ultimately that artists and fans will have access to what we all want: more and higher quality live entertainment experiences at a price that fans can afford. We look forward to each and every one of you helping us lay the groundwork now for the future of the industry.

Let’s not get distracted by Live Nation spin. Instead, let’s stay focused on continuing to execute at the highest level, and preparing for a future state of the industry: a world with more competition, more innovation, artist and consumer choice, lower ticketing fees, and more music.

Jay

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