Chairman/CEO of AEG Jay Marciano says Live Nation operates like a monopoly and agrees with the US Justice Department's effort to break up the concert giant and Ticketmaster, according to an email Marciano sent to employees on Friday (May 31). In the memo, the executive accuses the company of “preventing other businesses from competing” and “leaving consumers to suffer the consequences.”
In the two-page email, Marciano said the lawsuit was a major milestone in addressing alleged monopolistic behavior in the concert industry, noting that “the entire ecosystem of our industry” is at stake as the case moves through the U.S. legal system.
“Despite its claims of profit margins or market share, it is a monopoly and uses its monopoly power to impose its will on the live entertainment business,” Live Nation's Marciano wrote, later writing, “We strongly believe that the DOJ's lawsuit will succeed and ultimately bring about sweeping changes.”
Advertising sign received a copy of the email, which you can read in full below.
In a statement sent to Advertising sign, Dan Wall, Live Nation's executive vice president of corporate and regulatory affairs, responded to Marciano's email: “This is why antitrust laws protect competition, not competitors trying to use the courts to advance their own interests. AEG is supporting this case—indeed, it begged the DOJ to file it—because it doesn't want to pay artists market rates or convince venues to exclusively adopt its secondary ticketing system. Her complaints about service charges are hypocritical considering she could lower AXS's service charges today if she really cared. Self-interested arguments like these are common in antitrust cases, but rightfully ignored.”
An AEG spokesman did not respond to a request for comment on the letter.
From: Office of Jay Marciano
No doubt you've all been closely following the ongoing media coverage in the wake of the Justice Department's lawsuit against Live Nation and Ticketmaster. As I mentioned in my note from last week, we have spent the last few days carefully reviewing the DOJ filing, as well as Live Nation's subsequent response to the complaint.
AEG has long argued that Ticketmaster has a monopoly on the US ticketing market and is using that monopoly power to subsidize Live Nation's content businesses, preventing other businesses from competing in those areas and leaving consumers to suffer the concequenses. This lawsuit isn't just the Justice Department suing to break up a monopoly. our entire industry ecosystem is at stake, 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 stifle competition and innovation and result in higher ticket prices, depriving artists of the ability to choose who tickets to their shows and how much their fans have to 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 problems in the industry they have created, making false and misleading statements, and dismissing the importance 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. Despite its claims about its profit margins or market share, it is a monopoly and uses its monopoly power to impose its will on the live entertainment business. Live Nation may claim that promotion margins are low, but that's only because it uses the excess profits of its ticketing monopoly to exceed the costs that the concert market can sustain profitably. Live Nation is doing this with the goal of putting competitors out of business and in turn using its continued control of content to maintain a stranglehold on ticketing through exclusive venues.
The DOJ's case is serious and reflects the widespread sentiment among 30 attorneys general from around the country, numerous media outlets, industry commentators, consumer groups and antitrust experts that Live Nation's conduct violates the law and harms competition and the consumers. While it may take some time, we strongly believe that the DOJ's lawsuit will succeed and ultimately bring about sweeping changes that will result in increased competition and more innovation and choice that benefit fans, artists and
the entire industry. The DOJ lawsuit means that artists will be able to choose who collects tickets for their concerts, that the tickets consumers pay will be lower and, ultimately, that artists and fans will have access to what everyone we want: more and higher quality live entertainment experiences at a price fans can afford. We look forward to you helping us lay the groundwork now for the future of the industry.
Let's not get carried away by Live Nation's spin. Instead, let's stay focused on continuing to perform at the highest level and preparing for a future state of the industry: a world of more competition, more innovation, artist and consumer choice, lower ticket prices and more music.
Jay
MODERNIZE: This story was updated on May 31 at 2:50 p.m. ET with a statement from Live Nation.
