AEG CEO Jay Marciano Calls Live Nation A Monopoly, Predicts DOJ Victory in Lawsuit

AEG chairman/CEO Jay Marciano says Live Nation acts like a monopoly and agrees with the U.S. Department of Justice’s effort to break the concert giant and Ticketmaster up, according to an email Marciano sent out 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 an important milestone for addressing alleged monopolistic behavior in the concert business, noting “the entire ecosystem of our industry” is at stake as the case winds its way through the U.S. legal system.

“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,” wrote Marciano of Live Nation, later writing, “We strongly believe that DOJ’s lawsuit will succeed and ultimately bring sweeping changes.”

Billboard obtained a copy of the email, which can be read in full below. An AEG spokesman did not respond to a request for comment regarding the letter. Live Nation had not responded to a request for comment at press time.

From: Office of Jay Marciano

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