With no buyers willing to agree to AEG's terms, the company was able to hold out until it secured favorable conditions to buy Gilbert's group and TPG's shares, which were ready to free up cash and sell the ownership stake in AXS it obtained acquiring Cirque du Soleil in 2015.
It was Cirque du Soleil's Outbox ticketing technology that originally powered the AXS ticketing system in a deal struck in 2011 to create a competitor to Ticketmaster, which had completed the merger with Live Nation the year before. In 2015, AXS merged with Veritix, the ticketing company created by Gilbert, who owns the Cleveland Cavaliers. As a result of the two partnerships, TPG and Rockridge together held 62% of the company while AEG held a 38% stake.
As for competing against Ticketmaster, the company has had mixed success. While it was able to secure an exclusive ticketing agreement with the famed Red Rocks venue outside Denver (also home to AEG’s reclusive billionaire owner Phil Anschutz), it was unable to renew several Veritix clients and struggled with growth. With full control of AXS, AEG plans to develop its own secondary ticket offering and potentially merge or acquire a new a ticketing partner.
Company officials are also considering pursuing a non-exclusivity model for new clients, similar to the city-owned Greek Theatre in Los Angeles, which is managed by SMG. Promoters who bring shows to the building are welcome to use the ticketing technology of their choice and officials with AEG are considering making a similar offer to potential clients. Instead of paying an advance for upfront exclusivity, venues using AXS would be allowed to use Ticketmaster for any Live Nation shows brought to their facilities.
A non-exclusive model could be a competitive remedy to Ticketmaster, which has continued to rapidly increase market share 10 years after its merger with Live Nation, a deal that required Ticketmaster to license its technology to AEG so the company could build a competing ticketing solution.
The agreement also forbade Live Nation from withholding content from buildings that signed with AEG, but allowed Live Nation to give preference to venues that use Ticketmaster. That exception has made the federal consent decree essentially unenforceable and AEG officials have largely given up on an intervention from the Department of Justice or the Federal Trade Commission. Sources tell Billboard that DOJ officials have met with AEG executives over complaints of anti-competitive behaviors, but have never charged Live Nation with violating the agreement.
The consent decree was briefly discussed in a televised U.S. Senate oversight hearing Tuesday between Senator Richard Blumenthal and Makan Delrahim, assistant attorney general for the antitrust division. Delrahim confirmed the DOJ had been "examining allegations of violations" of the consent decree, but expressed doubt the department would be able to prevail in a court challenge.
"The current standard for a violation of a consent decree -- which is probably why we haven't seen enforcement of consent decrees, too many of them -- was that the term has to be clearly unambiguous and you have to prove it in the court to clear a convincing standard. I don't have to tell you how difficult of a standard that is," Delrahim said in a response to a question from Blumenthal.
Going forward, Delrahim explained, consent decrees coming out of the DOJ will "include provisions that force the parties to agree to a lower standard for review," making it easier for court challenges of violations.
After the hearing, Live Nation released a statement saying it had "always complied with their obligations under the consent decree" and added, "We do not force anyone into ticketing agreements by leveraging content, and we do not retaliate against venues that choose other ticketing providers."
The statement also said the company "worked closely with the Department of Justice on the inquiries they have received during the term of the consent decree" and that the DOJ "has thoroughly investigated these complaints" and "has never found any material violations."
Officials with AEG did not comment for this story.