Two decades after Robert Sillerman rolled up regional promoters into the firm that eventually became Live Nation, the live-music business is in the midst of a second wave of consolidation. In the last year, Live Nation has acquired eight independent promotion companies, buying up European firms like Spain’s Planet Events and Switzerland’s Mainland Music, as well as Seattle’s Emporium Presents, whose owner, Dan Steinberg, hosts the popular indie podcast Promoter 101. AEG, the second-biggest company in the business, has also been on a buying spree, acquiring firms like Ohio's PromoWest and investing in Georgia promoter Zero Mile Presents to partner on a 2,200-capacity venue in Atlanta. That creates more pressure for indies in markets they once ruled.
“We’re definitely seeing them more on our turf, competing with us for the smaller club and theater shows that they didn’t seem interested in a couple of years ago,” says one indie promoter. “You used to watch them fight with the big guys” — indie promoters like Seth Hurwitz in Washington, D.C., and Gregg Perloff and Sherry Wasserman’s Another Planet Entertainment in San Francisco — “but it seems like those fights have settled.” And the big promoters are now seeking new targets to acquire or challenge for business.
Does such consolidation lead to an increase in ticket prices and fees for fans? It’s unclear. While there’s little data available about how prices change when an indie sells to a major promoter, increased competition between promoters generally means higher artist guarantees, as multiple buyers bid for an act and drive up the price. Those higher guarantees can often mean higher ticket prices — although some promoters are hesitant to pass that cost on to fans and try to recover their investment by making cuts elsewhere.
But others just raise the price; after all, most fans expect to pay more for an artist if they think a show will sell out. And prices as a whole are going up — average ticket prices to Live Nation events were up five percent in 2017 over the previous year, according to the company’s year-end financials, and the money businesses like Ticketmaster make from fees is up 14 percent in 2018 (that’s for all ticket sales, not as an average). The fees fans pay to indie promoters can be lower, but not always, depending on what kind of bonus their ticketing company paid to sign the venue. A $100,000 advance might help a venue owner upgrade their sound system, but it will be fans who ultimately pay the loan back through fees added on to their tickets.
Access to capital to pay for improvementsand talent buying is one the main reasons many indies sell to the majors. Several sources say that the benefits of being an independent — expertise in a local market and the ability to operate nimbly and focus on individual artists’ needs — have less cachet in a business that’s increasingly driven by bidding wars for headliners.
That has led some promoters to specialize, says Peter Shapiro, founder of Dayglo Ventures (which owns Brooklyn Bowl) and New York’s top jam-scene promoter (he staged Dead & Company’s Fare Thee Well concerts in 2015). Being the best in one genre of music creates credibility, “but once you start to grow, the benefits of scale become more material and the advantage tilts toward the bigger guys who can book a band for a global tour in a single deal,” he says.
In a pre-Live Nation world, only a handful of top acts — The Rolling Stones, Pink Floyd — used one promoter for their entire tour. Most talent agencies booked tours by market, selling individual concert dates to a network of independent promoters that controlled their home cities like mini music fiefdoms.
That began to change in 1998, when Sillerman started to purchase companies like Southern California’s Avalon Attractions and New York’s Delsener/Slater Enterprises. He gobbled up dozens of promoters, then sold them at a huge profit to Clear Channel in 2000 for $4.4 billion — which in 2005 spun off this business as Live Nation, the behemoth that brought in $10.8 billion in revenue in 2018.
Live Nation was able to bypass local promoters and sign national touring deals with acts like U2 and Jay-Z, and competitor AEG followed close behind. The 2008 stock market crash slowed the industry’s growth and gave the independents that could survive the credit crunch a chance to grow. But as the economy warmed and interest rates remained low, another concert promoter shopping spree began as Live Nation bought longtime indies like C3 Presents and Frank Productions.
Eight of the 10 biggest indie promoters at the start of the decade are now owned by Live Nation or AEG. Now, some talent agencies tend to see the indies as a financial risk compared with their well-capitalized competitors, which means they have to pay larger deposits and bigger guarantees — to ultimately get a smaller piece of the pie.
“They can step on us at any time if they so decide,” says Morgan Margolis, CEO of Knitting Factory Entertainment, which has shifted its focus to smaller markets like Boise, Idaho, and Spokane, Wash., as the majors increasingly have dominated larger markets. Like other indies, Margolis is also shifting the risks he takes, operating more like a consultant than a financier or a producer of big-budget shows.
A number of independent venues across the country now outsource talent buying to Margolis’ company — he books the bands and keeps the calendar packed, while the venue pays the artist and settles the show. Longtime punk-rock promoter John Reese, with Southern California firm SGE, has shifted his business from bands to brands, taking on craft-beer makers as clients and helping them develop events along SoCal beaches that get their drinks and wares in front of music fans.
That’s one way of staying afloat. “Or you could just sell your company, which is probably easier than diversifying into a business you really don’t understand,” says Cressman, who adds that instead, indies should double down on the services they can provide artists with careers that don’t neatly fit in the mega-promoter model.
"Artists need consistency and a careful deployment of time and resources to build their career and secure their legacy," says Cressman. "When you’re managing your business quarter to quarter, it’s tough to reconcile those mandates."
This article originally appeared in the March 30 issue of Billboard.