Live Nation is a monopoly that will likely be broken up following the Justice Department’s antitrust lawsuit last week, AEG Presents CEO Jay Marciano said in an internal memo obtained by Variety. AEG Presents is the second largest live entertainment company in the world and Live Nation’s main competitor.
“AEG has long argued that Ticketmaster has a monopoly in the U.S. ticketing market and uses that monopoly power to subsidize Live Nation’s content businesses, thereby preventing other companies from competing in these areas and leaving consumers to suffer the brunt. consequences,” Marciano wrote in the memo, which was distributed 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 deals block competition and innovation and result in higher ticketing fees, depriving artists of the ability to choose who tickets their shows and how much their fans should pay.
The long-awaited trial 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 multi-billion dollar company that is most world’s largest live entertainment organization. . Live Nation fully owns Ticketmaster, the largest ticket seller in North America.
The complaint claims the company has a monopoly on ticketing through Ticketmaster and is illegally using monopoly power to dominate the ticketing industry and stifle competition. However, it should be noted that other ticketing companies, including AEG-owned AXS, also have exclusive contracts with venues, although not on the scale of Ticketmaster.
“It’s time to break up,” Attorney General Merrick B. Garland said at a news conference.
Marciano’s memo appears in full below; In response, Live Nation’s Dan Wall said in a statement: “This is why antitrust laws protect competition, not competitors who try to use the courts to advance their own interests.” AEG is pushing this case — and has even begged the DOJ to drop it — because it doesn’t want to pay artists market rates or convince venues to exclusively adopt its second-rate ticketing system. His complaints about service fees are hypocritical in that he could reduce AXS service fees today if he really cared. Self-serving arguments like these are common in antitrust cases, but they are rightly ignored.
No doubt you are all closely following the ongoing media coverage following the Department of Justice’s lawsuit against Live Nation and Ticketmaster. As I mentioned in my note last week, we have spent the last few days carefully reviewing the DOJ’s filing, as well as Live Nation’s subsequent response to the complaint.
AEG has long argued that Ticketmaster has a monopoly in the U.S. ticketing market and uses that monopoly power to subsidize Live Nation’s content businesses, thereby preventing other companies from competing in those areas and leaving consumers to suffer the consequences. . This lawsuit is not simply a DOJ lawsuit to break up a monopoly; the issue is the entire ecosystem of our industry, which has long suffered from a seriously flawed 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 deals block competition and innovation and result in higher ticketing fees, depriving artists of the ability to choose who tickets their shows and how much their fans should pay.
Following the filing with the DOJ, Live Nation has issued several public comments in service of its current strategy to maintain its dominance – unfairly blaming others for the problems they have created in the industry, making statements false and misleading and dismissing the importance of the matter. Artists, venues, and brokers are not responsible for the broken business model of live entertainment in this country – that responsibility lies with Live Nation. Despite its claims about its profit margins or market share, it is a monopoly and it uses its monopoly power to impose its will on the live entertainment industry. Live Nation may claim that its promotion margins are low, but that’s only because it deploys the excess profits of its ticketing monopoly to spend more than the concert market can profitably support. Live Nation does this in an effort to eliminate competitors from the industry and, in turn, use its continued control over content to maintain a stranglehold on ticketing through venue exclusives.
The DOJ’s case is serious and reflects the widespread sentiment among 30 attorneys general 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. Although it may take some time, we are confident that the DOJ lawsuit will be successful and ultimately bring about sweeping changes resulting in increased competition and more innovation and choice that will benefit fans, artists, and our entire community. industry. The DOJ lawsuit means artists will have a choice of tickets to their concerts, ticket fees paid by consumers will be lower, and ultimately artists and fans will have access to what we all want: more and better live entertainment experiences at a reasonable price. that fans can afford. We hope that each of you will help us lay the foundation for the future of the industry now.
Let’s not get distracted by the Live Nation twist. Instead, let’s stay focused on continuing to execute at the highest level and preparing for the future state of the industry: a world with more competition, more innovation, more choice for artists and consumers, lower ticketing fees and more music.
– Jay