For the international contemporary live music industry

AEG plans to boost global touring

World News
May 1, 2019

Deal with Gudinski will break new ground

GLOBAL PROMOTER and venue owner/operator AEG plans to develop a touring network of mid-sized venues across the country, following its purchase of a 50 per cent stake in promoter Michael Gudinski’s Frontier Touring.

AEG’s chief operating office and CEO/chairman of promoting division AEG Presents Jay Marciano, in an exclusive interview with Audience, says that while arena and stadium-level artistes can afford to tour the region, acts below that level can often not find it a viable proposition.

“There are not enough small clubs and theatres in Australia for international artistes to be able to have the 10 or more shows that make it affordable to make the journey there,” he says. “It’s a bit chicken and egg, but you’ve got to build a network so artistes can tour Australia profitably. 

“In the past, the capital available to build that network was never really there. Now, with AEG and others in the market, there will be.”

He says the company is looking to “build or announce partnerships with venues in the near future”.

The AEG-Frontier venture cements a relationship that goes back 12 years, during which time Frontier promoted AEG tours in Australia and New Zealand. 

Gudinski says it gives him “more fire-power” and he feels “reinvigorated”.

The inclusion of Gudinski’s recently-announced partnership with fellow veteran promoter Michael Chugg and Chugg Entertainment (see Audience issue 230) in the venture, along with multi-arena operator AEG-Ogden, creates a significant rival to Live Nation Australia.

The deal with Chugg is the first part of an ambitious growth strategy, says Gudinski. “There are more complementary deals to announce soon,” he tells Audience.

“This is about having AEG’s financial backing and size to help us grow. We won’t be losing staff – we’re going to add people and we’re actively pursuing other opportunities. This was never about the money – it’s about making 1+1=4.

“We’ve got a couple of announcements over the next few months – it’s a very exciting time and it’s given me a new lease of life.”

He explains that while his other Mushroom Group companies – including booking agencies, management, record labels, publishing and merchandising – are not part of the AEG deal, it will help the rest of the group, and vice versa.

“What AEG brings to the table is venue-based and festival-based knowledge, and providing capital to help grow the business for artistes and fans in Australia,” says Marciano, whose company runs festivals including Coachella (cap. 250,000 across two weekends) in the USA and the UK’s British Summer Time (65,000). 

Among Gudinski’s plans is a multi-day festival. “We’ve never had a sleepover festival, but it’s something I’m inspired by,” he says. “We’ve got the perfect venue at Hanging Rock [where Frontier has promoted acts such as Eagles, Rod Stewart and Bruce Springsteen]. But festivals take time to develop.”

“If anyone believes I’m about to put my feet up, they’ve got another thing coming.”

Global ambition

Marciano says the formalisation of AEG’s wider presence in Australia is part of the company’s development of a worldwide touring network.

“As we think about how music is being consumed through streaming, artistes are more and more aware of the impact of having a global fanbase, not necessarily a regional fanbase. Music is more global than it’s ever been, so artistes are looking for their promoter to provide a global touring plan not just regional.”

He adds, “Looking at the live music business in the world, you realise North America represents about 60 per cent of total gross ticket sales, the UK and Europe is another 20 per cent and then 20 per cent is the rest of the world. 

“Australia has always been a strong marketplace but what’s changed in the last years is a growing Asian market, and you need the Australian market as an anchor for the Asia-Pacific business.” 

The company’s likely next big move “will be somewhere in Asia where we can help to build the Asia-Pacific footprint,” Marciano explains. 

AEG operates China’s Mercedez-Benz Arena (cap. 18,000) in Shanghai and the Cadillac Arena (19,000) in Beijing, but it doesn’t yet have a presence in the huge Japanese market.

“Japan is always on everyone’s radar,” says Marciano. “It is interesting because it has $3 billion of ticket sales, but about 85 per cent of that is J-Pop and K-Pop. That’s a hugely profitable local business and we believe that, combining it with Western acts, will potentially grow the Japanese marketplace from $3bn to $4bn.” 

He says the company’s approach is most likely to be a joint venture with a local promoter, or an acquisition.

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