Ticketmaster exclusive offers are ‘cornerstone of Live Nation monopoly,’ says AEG CEO Jay Marciano in internal memo

Live Nation is a monopoly that will likely be broken up by an antitrust lawsuit filed by the Justice Department last week, AEG Presents CEO Jay Marciano said in an internal memo obtained by Diversity. AEG Presents is the second largest live entertainment company and the main competitor of Live Nation.

“AEG has long maintained that Ticketmaster has a monopoly on the U.S. ticketing market and uses that monopoly position to subsidize Live Nation’s content business, preventing other companies from competing in those areas and leaving consumers to fend for themselves,” Marciano wrote in the memo, which was sent to employees early Friday morning and is reproduced in full below. “As you know, the foundation of Live Nation’s monopoly is Ticketmaster’s exclusive ticketing agreements with most major venues in the United States. These agreements stifle competition and innovation and result in higher ticket prices, depriving artists of choice over who buys tickets to their shows and how much their fans should pay.”

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The long-awaited lawsuit finally arrived last Thursday, with the U.S. Department of Justice suing Live Nation and Ticketmaster for violating the Sherman Antitrust Act, a move that could reshape the multibillion-dollar company that is the world’s largest live entertainment organization. Live Nation wholly owns Ticketmaster, the largest ticket reseller in North America.

The complaint alleges that the company has a monopoly on ticket sales through Ticketmaster and that it has illegally used its monopoly power to dominate the ticketing industry and destroy competition. It should be noted, however, that other ticketing companies, including AEG-owned AXS, also have exclusive agreements with venues, although not on the scale that Ticketmaster has.

“It’s time to break this up,” Attorney General Merrick B. Garland said at a news conference.

Marciano’s full note is below; representatives from AEG and Live Nation did not immediately respond. Diversityrequests for comment.

No doubt you are all closely following the ongoing media coverage in the wake of the Department of Justice’s lawsuit against Live Nation and Ticketmaster. As I mentioned in my note last week, we have spent the last several days carefully reviewing the Department of Justice docket, 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 business, preventing other companies from competing in those areas and leaving consequences for consumers. This lawsuit is not simply a Department of Justice lawsuit to break up a monopoly; At stake is the entire ecosystem of our industry, which has long suffered from a deeply broken ticketing model. As is known, the basis of Live Nation’s monopoly are Ticketmaster’s exclusive ticket sales agreements with most major concert halls in the United States. These agreements block competition and innovation and result in higher ticket prices, depriving artists of the ability to choose who sells tickets to their performances and how much fans pay.

Following its filing with the Department of Justice, Live Nation has issued several public comments in support of its ongoing strategy to maintain its dominance – unfairly blaming others for the industry problems they have caused, making false and misleading statements, and downplaying the importance of the case. Artists, venues and brokers are not responsible for the broken live entertainment business model in this country – that responsibility rests with Live Nation. Regardless of its claims regarding profit margin or market share, it is a monopoly and uses its monopoly power to impose its will on the live entertainment industry. Live Nation may claim that its promotional margins are low, but that’s only because it uses excess profits from its monopoly on ticket sales to spend more than what the concert market can profitably support. Live Nation does this to put competitors out of business and, in turn, use its continued control over content to maintain control over ticket sales at its exclusive properties.

The DOJ case is serious and reflects the common sentiment of 30 state 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 are deeply confident that the DOJ lawsuit will succeed and ultimately produce dramatic changes that will lead to more competition, innovation, and choice that will benefit fans, artists, and our entire industry. The DOJ lawsuit means that artists will have a choice in who buys tickets to their shows, that ticket prices will be lower, and ultimately, artists and fans will have access to what we all want: more and higher-quality live entertainment experiences at a price fans can afford. We look forward to each of you helping us lay the groundwork for the future of our industry now.

Let’s not get distracted by the virtuosos of Live Nation. Instead, let’s focus on continuing to perform at the highest level and prepare for the future state of the industry: a world with more competition, more innovation, artist and consumer choice, lower ticket prices and more music.

– Jay

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