AEG president/CEO Tim Leiweke made it clear that the Los Angeles-based sports and entertainment presenter doesn’t intend to adopt the same business model as competitor Live Nation, during his keynote address at the Grammy Foundation’s 10th Annual Entertainment Law Initiative (ELI) luncheon and scholarship presentation.
“There are those that believe in a 360 model,” Leiweke said to a crowded room today (Feb. 8) at the Beverly Hills Hotel in Los Angeles. “We don’t.”
Although his keynote speech was brief, Leiweke made it clear that AEG, parent company to concert promoter AEG Live, won’t move into the record label business any time soon.
“We go to the labels and let them know we’re [their] partners and that we can’t distribute the music better than [they] can,” he explained. “The labels have an important place within our industry. Quite frankly, if the label industry disappears, that’s not good for the music industry.”
Leiweke’s remarks were directed toward Live Nation’s all-encompassing 10-year deal with Madonna, which was announced last October. The $120 million partnership, under Live Nation Artists, will oversee Madonna’s future music and music-related businesses, including new studio albums, merchandising and touring.
“We think the managers and the agents are necessary,” Leiweke said. “We don’t think that we do ticketing or distribution or managing artists better than you do.”
Citing such high-grossing touring artists as Neil Diamond, U2, Usher and Kenny Chesney, along with new arenas being built in Beijing, Shanghai and Berlin, Leiweke estimates that AEG will sell about 20 million tickets in 2008. The company’s facilities division, AEG Facilities, is expected to sell the same amount, he added.
Noting that AEG invested $800 million in the live music business in 2007, and will produce more than 30 tours this year, Leiweke added, “We’re going to grow year after year. There are some, including our competitors, that say we’re a boutique. But we’re not a boutique. We’re here to stay.”
AEG Live — the second largest concert promoter next to Live Nation — has promoted tours by Justin Timberlake, Christina Aguilera, Bon Jovi, High School Musical, Prince, Hannah Montana/Miley Cyrus, Rod Stewart, the Eagles, Paul McCartney, Nickelback, Dixie Chicks, My Chemical Romance, American Idols Live and Dancing with the Stars, among others.
Leiweke also warned today’s audience about the rising prices of concert tickets.
“We have to be careful about what we charge, because if the average ticket price is $250 to see an artist, we’re all in trouble,” he said. “We’ve taken our market and we’re now trying to appeal to a 10% market instead of a 100% market.”
Overall, “the business is amazing and the artists have never been better,” Leiweke noted. “We have to find new ways to find new talent. We have to give them new platforms and give that music to the consumer.”
Meanwhile, today’s luncheon also honored longtime entertainment attorney David Braun, who shared memorable stories about such artists as Bob Dylan, Janis Joplin, George Harrison and Michael Jackson. Braun also received a surprise introduction from friend and former client Neil Diamond.
“[He was] probably the most influential man in my professional life,” Diamond said. “David was a true friend from the very beginning.”
Other speakers at the event included ELI executive committee chair and music industry attorney Ken Abdo, Grammy Foundation president Neil Portnow, label veteran Eddie Rosenblatt and Grammy Foundation chairman Steve Schnur, who also serves as worldwide executive of music/marketing for Electronic Arts.
A cash scholarship of $5,000 was also awarded to UCLA School of Law student Matthew Reynolds for his paper “Why Music Should Be Socialized.” Along with the scholarship, Reynolds’ paper will be published in a major legal journal.
