On Friday (May 31), AEG president/CEO Jay Marciano became the first major live music executive to support the Justice Department's effort to break up Live Nation and Ticketmaster, foreshadowing the role AEG will likely play as a key witness in the DOJ's antitrust case against Ticketmaster.
“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,” Marciano wrote in a May 30 memo to staff. talent, AEG redoubled its attacks on Ticketmaster's use of exclusive ticketing contracts, with Marciano telling staff that AEG and its lawyers “strongly believe that the DOJ lawsuit will succeed and ultimately bring about sweeping changes » in the live music industry.
The government interviewed dozens of Live Nation competitors during the two-year antitrust probe, including AEG — AEG executives met with DOJ investigators on at least three separate occasions, including a meeting in 2023 to discuss its crash ticket sales for Taylor Swift's The Eras Tour, promoted by AEG through its joint venture Louis Messina.
This puts Marciano and AEG in a rare position to mobilize public opinion and support his appeal to staff and the wider music community to help us “lay the foundation now for the future of the industry.”
But AEG's claims aren't as compelling as Marciano believes, according to Live Nation's corporate and regulatory affairs executive Dan Wallwho responded to Marciano's May 30 letter with a statement alleging that AEG is trying to use Live Nation's antitrust case “to advance its own interests.”
“AEG is supporting this case — indeed, it has begged the DOJ to file it — because it does not want to pay artists market rates or convince venues to exclusively adopt the second-rate ticketing system,” Wall said in a statement which was given to Advertising sign after Marciano's statement was made public.
AEG declined to comment for this story.
The battle between Live Nation and AEG dates back to the federal government's 2010 approval of Live Nation's merger with Ticketmaster, which the government approved by imposing a number of conditions on Ticketmaster intended to increase competition. As part of those terms, referred to as the consent decree, the DOJ required Ticketmaster to license the source code and technology to AEG to create a competing ticketing service. The government did not address some of Ticketmaster's more controversial tactics at the time, such as the use of exclusive contracts to lock venues into long-term deals, which is at the heart of this current conflict.
AEG only licensed Ticketmaster's technology for a year, and in 2011 announced it was creating a new ticketing platform called AXS with the help of Montreal ticketing company Outbox. It took two years to switch all AEG venues worldwide to AXS Tickets, and then AEG struggled to sign up new customers, even after merging with Veritix in 2015, and in 2019 ended up losing a major customer – Altitude Sports and Entertainment – from a startup called Rival started by the former CEO of Ticketmaster Nathan Hubbard.
AXS's struggles were due in part to its ownership structure after its 2015 merger with Veritix, which split ownership between AEG, private equity firm TPG and Cleveland Cavaliers owner Dan Gilbert, which previously owned Veritix. In 2019, AXS partners began exploring a sale of the company and considered buying Rival or being bought by Rival, AEG's deals were blocked thanks to AXS's ownership rules requiring unanimous consent for all substantive decisions. AEG also blocked a merger between AXS and CTS Eventim, a powerful European ticketing company that was looking for an entry point into the US market to compete with Ticketmaster.
Gilbert and TPG eventually agreed to sell their stake in AXS to AEG in 2019, which by then had begun exploring a new business model for the ticket seller, based on non-exclusive ticketing contracts. Instead of competing with Ticketmaster to sign venues to AXS, AEG will focus on expanding the use of AXS ticketing for AEG-promoted tours. Both Live Nation and AEG prefer to use their own ticketing platforms for the concerts they promote because it allows promoters to directly control customer data.
Hoping to encourage Ticketmaster to allow AEG to use AXS whenever it brought tours to Ticketmaster-ticketed buildings, AEG offered to allow Live Nation to use Ticketmaster at AEG-controlled venues, including the Crypto.com Arena in Los Angels.
AEG would extract a similar concession from Live Nation in 2021 that would win mention in the DOJ's lawsuit against Ticketmaster. On June 15 of that year, leading venue management company ASM Global, in which AEG held a minority stake, announced that it had renewed its agreement with Ticketmaster to provide ticketing services for the more than 300 venues managed by ASM .
The government called the deal suspicious because AEG at the time owned 30 percent of ASM and had “supported AXS to serve as the exclusive master ticket seller for ASM Global venues,” the complaint states. “But ASM Global's majority shareholder, Onex, was concerned that Live Nation would retaliate by withholding shows from ASM Global's venues if ASM Global abandoned its use of Ticketmaster altogether.”
A source close to the deal called the DOJ's version of the story “exaggeration,” noting that AEG and Onex had no right to require ASM Global's customers to use one ticketing system over the other and that the majority of of customers chose to stay with Live Nation. However, ASM convinced Live Nation to grant a rare exception to its venue contracts, allowing ASM venues contracted with Ticketmaster to switch to AXS tickets for any tours AEG brought to the buildings.
In return, Ticketmaster paid a large advance for the multi-year contract and issued a press release, citing ASM Global president/CEO Ron Bension saying, “Aligning with industry leaders like Ticketmaster is a critical element in providing millions of people with the most seamless and secure live experiences.”
Happy to have secured the biggest carve-out in Ticketmaster's exclusivity contract to date, AXS decided to push for more exceptions. In 2022, AEG began running Swift's The Eras Tour with partner Messina Touring Group. The majority of venues on the tour were Ticketmaster-exclusive facilities, although ASM managed five of the stages, representing 12 shows on the 52-date trek. But two of those dates — a pair of concerts at State Farm Stadium in Glendale, Ariz. – would be ticketed by SeatGeek as part of the exclusive deal with the Arizona Cardinals. Making matters worse, two of ASM's management clients decided to work with Ticketmaster on the sale.
Just five shows into two stages, AEG dropped the issue, but not before reporting the matter to the DOJ, encouraging them to examine Live Nation and Ticketmaster's use of exclusive contracts as anticompetitive.
After the fiasco, president of Live Nation Greg Maffei appeared on CNBC to defend Ticketmaster and claim that “AEG, which is Taylor Swift's promoter, chose to use us because, in fact, we are the largest and most efficient ticket seller in the world,” he said. “Even our competitors want to come to our platform.” AEG leadership was quick to respond. “Ticketmaster's exclusive deals with the vast majority of venues on The Eras Tour required us to be ticketed through their system,” management said in a statement, adding, “We had no choice.”
In the months that followed, AEG's relationship with Live Nation soured. In January 2023, AEG announced that it supported a US tour for lead singer Zach Bryan who had just released a live album titled All My Homies Hate Ticketmaster. The album title encapsulated decades of anti-Ticketmaster sentiment from music fans over Ticketmaster fees, prices and malfeasance, and AEG was eager to get in early. With AEG as his promoter, Bryan embarked on an extensive tour of non-Ticketmaster buildings, a play not attempted since Pearl Jam in the 1990s. AEG even developed a sophisticated anti-scalping system to keep tickets out of the hands of scalpers.
Despite the tour's success, Bryan had come to a surprising conclusion about the experience—some of his friends hated AXS tickets, too.
“Everyone complained about AXS last year. Using all the ticketing sites this year,” he said of his 2023 Quittin' Time tour, which was still being promoted by AEG but would no longer be sold at Ticketmaster buildings and would play all venues regardless of which label it was issuing tickets.
“All my friends still hate Ticketmaster, but it's hard to believe that one man can't change the whole system,” Bryan wrote on X, formerly of Twitter. “It's deliberately broken and I'm going to continue to feel absolutely horrible about the cost of the tickets.”
In his written response to Marciano's letter, Wall, a former Live Nation judge who helped architect the 2010 consent decree, says AEG is now trying to use the legal system to compete with Ticketmaster instead of focusing on improving AXS .
Marciano argues that there are many things the DOJ can do to level the playing field, and he concluded his letter by encouraging his officials to “not get distracted by the Live Nation spin” and instead to “prepare for a world of more competition, more innovation, artist and consumer choice, lower ticket prices and more music.”
