The coronavirus pandemic has hit the live entertainment industry hard, as the ensuing shutdowns have caused venues and concert promoters to postpone or cancel events to help prevent the virus’ spread. This pandemic has now caused even larger financial setbacks for the Anschutz Entertainment Group (AEG); according to a resent memo written the company’s president Jay Marciano and obtained by Variety, the company will be launching series of layoffs, furloughs and pay cuts effective July 1. According to Billboard, these layoffs will impact 15 percent of its workforce, roughly over 100 employees.
During the memo Marciano stated that the company had delayed these cuts for as long as possible, during a time when many other companies in the music industry also made cuts. Live Nation, the only live entertainment company larger than AEG in the country, also suffered major setbacks as its stock dropped by 50 percent in the wake of the pandemic. Michael Rapino, Live Nation’s CEO, proposed $500 million in cuts this year, which included cut to his own salary and the furloughing of 20 percent of the company’s staff.
“We did not come to today’s decisions lightly. During the last few months we kept our company intact to ensure that those of you who would be the most affected would have the best safety net we could provide,” Marciano wrote in the memo. “While it’s small solace, I see this as a testament to the culture that exists at AEG and the important role you have played in building this environment.”
AEG joined Live Nation and The Broadway League earlier this year to request an expansion of the payment protection act by Congress. Several prominent talent agencies have also undergone massive layoffs and furloughs, including Endeavor, the owners of the William Morris Agency and Paradigm Talent Agency.
Prior to the pandemic, AEG was one of the more profitable live entertainment companies, owning the world renowned Coachella music festival, alongside prominent stadium venues across the country. According to Pollstar, the live entertainment industry was seen as extremely profitable only months before the pandemic, as the top 100 tours of 2019 raked in $5.5 billion in ticket sales alone.
While Coachella has been postponed until fall, organizers are reportedly planning on having this year’s guests attending next year’s festival.
Leave a Comment