On Friday (May 31), AEG chairman/CEO Jay Marciano became the first major live music executive to voice support for the Department of Justice’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 maintained that Ticketmaster has a monopoly in the U.S. ticketing marketplace and uses that monopoly power to subsidize Live Nation’s content businesses,” Marciano wrote in a memo to staff May 30. Beyond its longstanding criticism that Live Nation uses its scale to overpay for talent, AEG doubled down on its attacks on Ticketmaster’s use of exclusive ticketing contracts, with Marciano telling staff that AEG and its attorneys “strongly believe that DOJ’s lawsuit will succeed and ultimately bring sweeping changes” to the live music industry.
The government interviewed dozens of Live Nation’s competitors during its two-year anti-trust investigation, including AEG — executives at AEG have met with DOJ investigators on at least three separate occasions, including a 2023 meeting to discuss the crash of the ticket presale for Taylor Swift’s The Eras Tour, which AEG promoted through its joint venture with Louis Messina.
That puts Marciano and AEG in a rare position to galvanize public opinion and build support for his call to staff and the larger music community to help “us lay the groundwork now for the future of the industry.”
But AEG’s claims aren’t as compelling as Marciano thinks, according to Live Nation executive vp of corporate and regulatory affairs Dan Wall, who responded to Marciano’s May 30 letter with a statement alleging AEG is trying to use Live Nation’s antitrust case “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,” Wall said in a statement provided to Billboard after Marciano’s statement was released.
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 designed to increase competition. As part of those conditions, referred to as the consent decree, the DOJ required Ticketmaster to license its 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, like the use of exclusive contracts to lock venues into long-term deals, which lies at the heart of this current conflict.
AEG only licensed Ticketmaster’s technology for a year, and in 2011 announced it was instead building a new ticketing platform called AXS with the help of Montreal firm Outbox ticketing. It took two years to switch all of AEG’s venues globally to AXS Tickets, and then AEG struggled to sign on new clients, even after merging with Veritix in 2015, and in 2019 ended up losing a major client — Altitude Sports and Entertainment — to a startup called Rival launched by former Ticketmaster CEO Nathan Hubbard.
AXS’ struggles were due in part to its ownership structure following the 2015 merger with Veritix, which divided ownership among AEG, private-equity firm TPG and Cleveland Cavaliers owner Dan Gilbert, who previously owned Veritix. In 2019, AXS’ partners began exploring a sale of the company and looked at buying Rival or being bought by Rival, deals AEG blocked thanks to AXS’ ownership rules that required unanimous consent for all material decisions. AEG also blocked a merger between AXS and CTS Eventim, a powerful European ticketing provider that was looking for an entry point in the U.S. market to compete with Ticketmaster.
Gilbert and TPG eventually agreed to sell their stakes in AXS to AEG in 2019, which by then had started to explore a new business model for the ticketer, built around non-exclusive ticketing contracts. Instead of competing with Ticketmaster to sign venues to AXS, AEG would instead focus on expanding its 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 the promoters to directly control the customer data.
Hoping to encourage Ticketmaster to allow AEG to use AXS whenever it brought tours to buildings ticketed by Ticketmaster, AEG offered to allow Live Nation to use Ticketmaster at the venues AEG controls, including the Crypto.com Arena in Los Angeles.
AEG would extract a similar concession from Live Nation in 2021 that would earn a mention in the DOJ’s lawsuit against Ticketmaster. On June 15 of that year, leading venue operations company ASM Global, in which AEG owned a minority stake, announced it had renewed its agreement with Ticketmaster to provide ticketing services for a majority of the 300 venues ASM manages.
The government flagged the agreement as suspicious because AEG at the time owned 30% of ASM and had “advocated for AXS to serve as the exclusive primary ticketer for the ASM Global venues,” the complaint reads. “But ASM Global’s majority shareholder, Onex, worried that Live Nation would retaliate by withholding shows from ASM Global venues if ASM Global entirely switched away from using Ticketmaster.”
A source close to the deal called the DOJ’s version of the story an “oversimplification,” noting that AEG and Onex didn’t have the right to require ASM Global clients to use one ticketing system over the other and that the majority of clients opted to stay with Live Nation. ASM did, however, convince Live Nation to grant a rare exception to its venue contracts, allowing ASM venues contracted to Ticketmaster to switch to AXS tickets for any tours AEG brought to the buildings.
In exchange, Ticketmaster paid a large advance for the multiyear contract and issued a press release, quoting ASM Global president/CEO Ron Bension saying, “Aligning with industry leaders like Ticketmaster is a critical component in providing millions of people with the most seamless and secure live experiences.”
Happy to have secured the largest carve-out in Ticketmaster’s exclusivity contract to date, AXS decided to push for more exceptions. In 2022, AEG began routing Swift’s The Eras Tour alongside its partner, Messina Touring Group. The majority of the venues on the tour were Ticketmaster-exclusive facilities, though ASM managed five of the stadiums, 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 under its exclusive deal with the Arizona Cardinals. Making matters worse, two of ASM’s management clients decided to partner with Ticketmaster for the sale.
Down to just five shows at two stadiums, AEG dropped the matter, but not before reporting the issue to the DOJ, encouraging them to look at Live Nation and Ticketmaster’s use of exclusive contracts as anti-competitive.
After the fiasco, Live Nation chairman Greg Maffei appeared on CNBC to defend Ticketmaster and claim “AEG, who is the promoter for Taylor Swift, chose to use us because, in reality, we are the largest and most effective ticket seller in the world,” he said. “Even our competitors want to come on 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 ticket through their system,” the leadership said in a statement, adding, “We didn’t have a choice.”
In the months following, AEG’s relationship with Live Nation only worsened. In January 2023, AEG announced it was backing a U.S. tour for chart-topping singer Zach Bryan who had just released a live album called All My Homies Hate Ticketmaster. The album title succinctly encapsulated decades of anti-Ticketmaster sentiment from music fans over Ticketmaster fees, pricing and indignities and AEG was eager to get in early. With AEG as his promoter, Bryan embarked on an expansive tour of non-Ticketmaster buildings, a gambit that hadn’t been attempted since Pearl Jam in the 1990s. AEG even deployed a sophisticated anti-scalping system to keep tickets out of the hands of scalpers.
Despite the tour’s success, Bryan had reached a surprising conclusion about the experience — some of his homies hated AXS tickets too.
“Everyone complained about AXS last year. Using all ticketing sites this year,” he said of his 2023 Quittin’ Time Tour, which was still being promoted by AEG but would no longer route around Ticketmaster buildings and would play all venues, regardless of which company was the ticketer.
“All my homies still do hate Ticketmaster, but hard to realize one guy can’t change the whole system,” Bryan wrote on X, formerly Twitter. “It is intentionally broken and I’ll continue to feel absolutely horrible about the cost of tickets.”
In his written response to Marciano’s letter, Wall, a former litigator for Live Nation who helped architect the 2010 consent decree, says AEG is now trying to use the legal system to compete against Ticketmaster instead of focusing on improving AXS.
Marciano contends that there are many things that the DOJ can do to level the playing field and ended his letter by encouraging his employees not to “get distracted by Live Nation spin” and instead to “prepare for a world with more competition, more innovation, artist and consumer choice, lower ticketing fees, and more music.”