AEG to TM and Live Nation: “What Are We, Chopped Liver?”

Anschutz Entertainment Group (known as AEG) is one of those companies that quietly just kicks butt on a day to day basis without drawing undue attention to itself.

AEG not only has a significant concert division (AEG Live), but it also built and developed the Staples Center (where the Lakers, Clippers, Kings, and Sparks play, plus concerts and other shows) and LA Live, and it owns and/or built all or part of a number other buildings and sports franchises around the country.

In other words, these guys are the biggest thing in our business that a lot of people haven’t heard of.

They have an interesting relationship with both Ticketmaster and Live Nation.  To Live Nation, they’re competitors in the sense that AEG Live is in the concert business, but of course, Live Nation is also a customer of its venues.  They’re a customer of Ticketmaster for ticketing in all their buildings too.

So if there’s a combined TM-LN, what does that mean for AEG?  They’re now a customer of their competitor, who is also their customer.

Yes, I think I got that right:  they’re a customer of TM’s ticket service, but they’re also a competitor to Live Nation, which is, by bringing its shows into AEG’s buildings, a customer of AEG.

Put differently, AEG would be a customer, a vendor and a competitor to this new TM-LN entity.

So what does AEG’s CEO Tim Leiweke think of all this?  You can read the Billboard piece on it yourself, but here’s a key tidbit:

“It’s not good for the industry.” Later, he added, “I find it ironic that some think this merger will fix the business and result in lower ticket prices.”

and

“This merger won’t create a new idea on how to sell more tickets,” he said.

Of course, from Leiweke’s point of view, a combined entity would give him less leverage over two of his most important business partners, so that’s another reason for him to be opposed to the merger.

Recently,  he threatened to take his ticketing business elsewhere if the merger goes through, and that’s a reasonably credible threat, since Tickets.com at least could provide a solution robust enough for AEG if they decide to leave TM.

Since it’s a credible threat, TM-LN have to pay attention.  AEG’s not a big enough customer loss in and of itself for LN and TM to drop the merger idea, but they are big enough to create the potential space in the minds of people at organizations like Madison Square Garden (which owns or runs multiple venues too) that they should be concerned about the merger as well.  That trend is one that TM and LN will really not be able to live with comfortably, and so they have to take AEG very seriously in this case.

As usual.