China Proving Difficult

Global entertainment company AEG is having its relationship with the Wukesong arena in Beijing “restructured,” according to China Music Radar.

The deal with Wukesong, which was christened last October with a Beyoncé concert that reportedly lost money, was the first in a prospective series of deals with six halls in six world cities where AEG will provide venue management and programming.

CMR says that AEG has struggled to find sponsorship and talent big enough to fill the 10,000-capacity arena.

There have also been problems with local authorities, but the most battering circumstance seems to be the difficulty in getting ticket prices down to a level Beijing residents can afford. The company has been praised for the way it brought Wukesong up to international standards after the Olympics by installing a stage and upgrading the power facilities.

The move out of Wukesong bodes ill for another AEG deal.

The company is set to take over the Swee-Pac arena (capacity 18,000) in Shanghai next November after its duties for the upcoming World Expo have been fulfilled.

Apparently, AEG has already signed Mercedes to an eight-year, $65 million naming rights deal for the venue. But according to the contract, AEG will have to supply more than 100 events per year for Swee-Pac.

CMR believes that – along with Ticketmaster and Live Nation, which have experienced problems operating in China – AEG “failed to realize … that the Western model cannot and should not be applied too literally in China.”