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THE HITS INTERVIEW WITH JAY MARCIANO

 

 

 

 

 

 

 



While much of the live music business waited for loans and financial lifelines while re-routing tours, Jay Marciano and his AEG Presents teams were proceeding with the construction of a half-dozen venues in the U.S., finding the right dates for Coachella and JazzFest and moving truckloads of dates for Dan + Shay, Justin Bieber and other acts.

Now back in his downtown L.A. office a couple of days a week, the Chairman/CEO of AEG Presents is preparing for a packed 2022 at all levels of the business—from stadiums to small clubs. “I know our club and theater calendars are more booked today than they’ve ever been,” Mariano says.

Marciano spoke candidly about the effects of the pandemic on the business and bright spots like Coachella, Elton John and Tyler, The Creator.

“I’ll say this as a general comment: Music fans have been incredibly patient throughout COVID,” he points out. “Far and away, the majority of people held onto their tickets, which signals that a fan is still a fan. One of the lessons of COVID is how hard-core some of these artists’ fans are.”


You’re back in the office a couple days a week. How is the transition?
We’re giving everybody a little bit of time to adjust, and the sense is, right around Labor Day, we expect everyone to be back in the office. At the end of the day, we’re still a relationship-driven business. I continue to feel that a lot of good ideas come from just dropping into somebody’s office, sitting on their sofa and talking about things. But if you’re on the finance side or the legal side, or if you’re an engineer, you don’t necessarily need to be in the office every day. In some of those fields, we’re finding the head-hunting is going on, especially in engineering. 

Everyone shut down for a year, and you come back and find it’s more expensive to do business?
Whether that’s debt taken on to survive, the cost of reopening venues, bringing back the workforce that expects to be better compensated or putting shows on the road—all of that’s going to have some impact. It’s pretty safe to say that we can expect increases in ticket prices.

But I think you’ll find that most everyone is trying to hold their cost structures to something similar to 2019, but that’s probably not sustainable long-term. We’ve been very conscientious about trying to keep ticket prices comparable to 2019, but don’t forget that in 2019, the live industry was coming off a decade of incredible growth where ticket sales were extremely strong.

You sold tickets for so many shows in early 2020, and now those shows won’t happen until 2022. And in that time, you’ve had all sorts of new costs, whether it’s changing out the HVAC system or adding new security or safety protocols. It seems like every show you’re putting on is more expensive than when you made the deal to put that show on.
You’re 100% correct. And the cost of labor—security guards, ticket takers, ushers, people who clean the venues, people who work in your box office, people who work in your concession stands and behind your bars—they all expect to be compensated better than they were in 2019. And we aren't raising ticket prices because we are honoring the same deals that we made.

One of AEG’s recent on-sales was the extension of Elton John’s farewell tour, this time in stadiums. Obviously, it’s not out of line for him—his Dodger Stadium show is legendary—but I was curious about the genesis of expanding from arenas.
With Elton, we had a plan, and it was always the plan to end in a stadium run. There are approximately 20 stadiums in the U.K. and Europe and a similar amount in the U.S., and we were faced with, do we go first, or do we wait till everybody else’s stadium show is on sale? And I think we all felt, based upon the sales that we experienced through the first two-thirds of the farewell tour, that the fan base was still strong and still interested. And the final shows would resonate with fans.

The two Dodger Stadium shows are sold out—and these are shows that are 18 months from now [November 2022]. They came out in full force and bought tickets. Most of us believe [COVID-19] is going to be all sorted by this time next year, so that feels safe to most of us. And the ticket prices are still comparable to what it costs to see Elton in an arena. We didn’t raise prices.

Elton was very concerned that his fans felt they weren’t being gouged post-COVID. And many of the stadium shows are already sold out, and they will all sell out by the time we play these shows.

You mentioned putting tickets on sale a year and a half out. What’s the approach now, especially at the arena level, in terms of on-sales?
It’s still unclear. The new normal is still being defined and, for the most part, I would say still feels like a bit of a social experiment. It’s anyone’s guess how this will evolve. As you would expect, every promoter is watching on-sales very closely, and we’re all looking for some definitive data points from which to draw some conclusions.

Some of the early indicators would be, I’d say, festivals are outperforming, meaning they’re performing better than they did pre-COVID. Now, whether this is a bubble, whether this is long-lasting, that’s unclear. But if you’re a promoter, good news in the moment is always welcome. In conversations with other promoters, I think the sense is that Gen Z has been in lockdown for the last year and a half, and the idea of just getting out, being with their friends, is a very attractive proposition. Whether that continues into ’22 and ’23, I don’t know.

For the first time in its 20-year history, Coachella sold out without announcing a single artist. I always like to say Coachella is the biggest act in the world, but that’s just me being a promoter.

There are still so many variables to how we’re putting shows on sale. There are a lot of artists trying to figure out what the impact of too many artists touring at once later this year will have. And, as I like to say, not everyone can go to every show. It’s not just about too many artists touring at once, it’s the scale and how that will have an impact on everyone else’s tour. The amount of money taken out of any market by one stadium show is equal to four or five arena shows. So not every artist can expect to tour successfully at the same time in 2022.

So what would you tell an artist debating whether to tour in ’22 or ’23?
I guess if I was giving advice to an artist, I would probably say that you should have a better reason to be on the road than to make money in 2022 —new music, a scarcity of recent touring, maybe it’s a farewell tour. Maybe you’ve got a great package [tour], a unique package that hasn’t been on the road before. It’s likely to be a tale of two stories [in 2022]: artists who will have fantastic tours and artists who’ll wish they had waited.

We’re seeing a lot of smaller acts doing smaller tours this summer and fall—15 to 25 dates over a month or two—and a lot of them feel like a quick cashflow fix. When it comes to long-term planning for club and theater acts, how crowded is 2022 already looking?
Smaller to midsize artists are going to be less impacted than an artist playing amphitheaters, arenas and stadiums.

Those artists need to get some cash flow, and the cost to get ready to tour is substantially less [than larger acts]. What we’re finding, though, is the cost of being on the road has gone up as well. Prices are higher than they were pre-COVID, so everybody’s got to look at their own costs and figure out what it takes to be financially successful on the road.

[Club and theater] acts are at less risk of having an unsuccessful tour than an arena artist is, because if the arena artist isn’t selling 85% of the tickets, that’s not great. If the promoter’s losing money, ultimately that’s not great for the artists long-term.

One option is festivals. You’re kind of protected because you’re not the only one selling the tickets, so festivals are a lot safer for some artists who were thinking about headlining next year. They might be better off playing a dozen festivals, then waiting until 2023 to go out.

You mentioned the Gen Z crowd can’t wait to buy the tickets. What about the baby boomer artists?
We call the baby boomers the YOLOs—you only live once, right?— whereas Gen Z is the FOMO crowd. Are the baby boomers going to buy tickets like they used to? I think, over time, yes. In the near term, it’s a little less certain.

Acts with a broad demographic appeal like an Elton John are doing well, but what about the ones who are dependent upon a specific demo to fill the seats?
Country-music ticket sales have been a little off generally. Anecdotally, I’m hearing that’s happening at amphitheaters, and that’s counterintuitive, because you would think that it’s outdoors, summer, let’s get out of the house, have a beer, watch a show. There are no broad conclusions yet as to what’s working and what’s not working—it seems like it’s artist- or event-dependent.

To get back to what you were saying earlier, could the same country act have a soft turnout because of a rescheduled stadium show the week before and an arena show a week later?
Correct. I go back to what I always say: Not everyone can go to every show. When you see something not sell, you start to look around to see if too many artists went on sale in too short a time span. There’s only so much money in a market segment to begin with, which is why I’m saying it’s inconclusive. Maybe in the rush to put things on sale, we ended up hurting ourselves.

What about Stagecoach?
We’re going to announce that in a couple of weeks. [Thomas Rhett, Carrie Underwood and Luke Combs were announced as headliners on 7/12.] Again, it’s a demographic that will feel more comfort-able about buying a ticket [for the spring]. We’re all following our own social-media responses very carefully, and it feels like we’re going to have a big year next year with Stagecoach.

You’ll announce a lineup before you put on tickets on sale.
We will with Stagecoach. People are going to want to know.

What are you seeing in the rest of the world in terms of how touring will return?
I was on the phone with our U.K. office today, and I understand that they’re going to fully open up and let businesses sort of drive their own policies. We’re planning on resuming normal touring by autumn this year throughout Europe. But it’s all different—Germany’s a little bit slower.

Australia has got a different problem—they did such a great job of locking down their borders that they had very few COVID cases. What they haven’t done is a great job of getting people vaccinated, so they really can’t open up for business and touring. I don’t expect Asia or Australia to really be able to resume any normal touring activity until probably the second or third quarter of next year.

When shutdowns started there was a lot of talk about restructuring deals. How has that played out?
A lot less than we initially thought. One thing about artists is they’re well-represented and they know we’ve got a lot of venues that need to be filled. We might be slightly advantaged, at least in the near term, because of the availabilities—it’s more difficult for an artist to get the best dates in the best venues, because our buildings are booked up. A rush to get some shows confirmed might lead to [some] dealmaking, but by and large, artists will get paid what they deserve to be paid.

Have you been to any shows?
Tyler, The Creator did a pop-up at the Roxy last week, and the reception he got inside a 500-seat club felt like it was the roar of a stadium; it was really a goosebump moment. It’s one of those things where we all felt like, “Ah, this is why we do it—this is what we’ve missed.” And it just felt great to be out, to hear the crowd and see the look on Tyler’s face from the reception that he got—a great feeling for everyone. So far, nothing’s come along to replace the live experience. Thank God.

Any lessons learned from a year-plus of working remotely?
In some ways, our communication has improved. By that, I mean my executive committee is 15 people, and during the year, on any Monday, half of them could be on the road and not in our weekly meeting. Our business is about being on the road, so you can’t really tell people to get back in the office for a meeting. I think now, when somebody is on the road, they can still participate in the meeting, because I think we’re a lot more comfortable using video conferencing. We’re seeing each other, we’re laughing and it’s a different experience than a phone call.

That said, you can’t replace going out to dinner with your team. That kind of bonding and the relationships built from being with people—it’s still a relationship business. That will never change.

Where are your new buildings opening, and is there any commonality between them?
We’ve got a half-dozen new clubs and theaters in Las Vegas, Atlanta, Cincinnati and Boston. We didn’t pause any of that construction or renovation during COVID. We feel the new sweet spot is a 3,000-to-5,000 GA venue that’s flexible, has a flat floor and a balcony and looks full if you’ve only sold 2,500 tickets. That’s the focus of our new-venue development.

So it’s not just that desire of the fan to get back out there, it’s that there’s someplace new for them to check out.
I couldn’t have said it better.

NEAR TRUTHS:
DEVELOPING STORIES
The kids are almighty. (8/3a)
LEADING OFF:
RON’S BIG RUN
Not your father's Columbia (8/3a)
ON THE COVER
Happier days are here again. (8/3a)
AN AUGUST HITS LIST
Look at the guns on these giants. (8/3a)
GRAMMY CHEW: SEEING BIEBER
It's high time for Justice in the Academy. (8/3a)
NEW & DEVELOPING ARTISTS
From tender shoots to mighty oaks.
MARKETSHARE MANIA
Let's do the numbers.
DELTA VARIANT
It is not the name of a Henry Miller novel.
IS IT TIME FOR ANOTHER ROCK STORY?
Could be. Dunno.
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