Amid a slowdown in the concert business, AEG Live, the second-largest live entertainment company in the world, is talking to the major music companies about taking a minority stake in the business, The Post has learned.
The Los Angeles-based company, a unit of AEG, an owner of sports teams and concert and sport venues, has been talking to Universal Music Group, Sony Music Entertainment and Warner Music, sources familiar with the situation said.
The talks could result in either a sale to one of the major music companies or possibly a consortium of bidders, one executive close to the matter said. The discussions are said to have been on and off with Universal for more than a year, but have broadened recently to include other labels.
“The talks are still going on. There is no definitive agreement,” warned one person close to the discussions.
While no one is clear on the rationale for AEG’s stake sale, some suggest it could be driven by the desire to raise capital while the business is still robust — despite the recent slowdown.
Others suggest a deal with the music companies could also help shore up AEG Live’s competitive position with the world’s No. 1 promoter, Live Nation, which recently gained federal approval for its merger with Ticketmaster.
AEG Live was behind the comeback tour by the late Michael Jackson and is fronting tours by Lady Gaga, The Black Eyed Peas, Pitbull and a host of others.
A spokesman for AEG Live confirmed it had talked to some companies.
“There are a variety of substantial organizations that have contacted us over the years and recently about investment opportunities in AEG Live,” the spokesman said. “While we happen to have all of our funding in place and have no need for additional investors and have never found anybody to be a good fit, we continue to speak to many to determine if they would bring proper assets to the table to warrant consideration.”
The spokesman added: “We’re having the best run that we’ve ever had and the future is incredibly bright but you always look for ways to strengthen the organization.”
A spokesman for Universal Music said: “We are not in discussions with them.” Executives at Sony and Warner had no immediate comment.
AEG owns, manages or programs roughly 29 venues across the country, including the Nokia Theater Times Square and the High Line Ballroom.
BTIG analyst Richard Greenfield, in a recent note to clients commenting on the high price of concert tickets and what effect they might have on sluggish concert ticket sales, wondered, “Is the music industry screwing up the last good part of its business: touring?”
Several concert cancellations have led to fears that touring isn’t necessarily the cash machine it used to be.
Greenfield thinks, “the problem probably has more to do with artists and agents/managers who keep pushing for higher and higher guarantees from touring companies, such as Live Nation and AEG,” in order to compensate for a 17 percent decline in physical music sales.
Live Nation’s stock price has fallen from a high of $16.70 on April 26 to $10.79 on June 7. Live Nation, which also houses an artists management company, Frontline, clawed back some of its losses over the past few days, closing at $12.20 yesterday.