August 8, 2001 Talk about it E-mail story Print

COMPANY TOWN
Antitrust Suit Filed Against Clear Channel

By JEFF LEEDS, TIMES STAFF WRITER

A lawsuit filed this week accuses Clear Channel Communications, the nation's biggest radio broadcaster and concert promoter, of violating antitrust laws by leveraging its radio playlists to freeze out competing promoters.

The lawsuit brought by a Denver promoter contends the conglomerate's acquisitions last year provided it with too much clout in the concert promotion business. The suit claims the company has denied airplay to acts that hire competing promoters and blocked those rivals out of opportunities to advertise their concerts.

Pam Taylor, a spokeswoman for Clear Channel's radio division, denied the allegations in the lawsuit and said, "We play by the rules, and we will vigorously defend ourselves against this. It's sort of a shame they want to make this a court fight. This is really a market fight." The case is believed to be the first antitrust lawsuit filed against San Antonio-based Clear Channel, which has dominated the concert scene since its acquisition last year of concert giant SFX Entertainment. The Justice Department recently signaled it would closely examine additional consolidation in the concert business.

The lawsuit, filed in U.S. District Court in Denver late Monday, contends that Denver promoter Nobody in Particular Presents has lost customers, profit and market share.

The lawsuit, which seeks unspecified damages, alleges that Clear Channel executives violated antitrust laws. According to the complaint, Clear Channel has "engaged in a vast array of anti-competitive, predatory and exclusionary practices" to extend its monopoly power in the concert market.

As a result, acts that otherwise would hire Nobody in Particular Presents to promote their concerts must use Clear Channel instead or risk losing airplay of their music or on-air promotional support, the lawsuit states.

Jesse Morreale, a co-owner of Nobody in Particular Presents, said, "We've just watched this whole thing evolve . . . to what we feel is a very unfair situation that threatens to put us out of business. We feel that our ability to compete is being severely restricted. We didn't see any other way to resolve it" but to go to court.

Clear Channel has been the dominant force in the concert industry since last August, when it closed a $4.4-billion deal to acquire SFX Entertainment--which itself had taken the concert world by storm by purchasing more than 18 promoters in local markets around the country since 1996.

Clear Channel also is by far the nation's biggest radio broadcaster. After Congress' elimination of restrictions on broadcast ownership, the company made a series of acquisitions to build a portfolio of an estimated 1,200 stations.

Clear Channel said the association between its radio stations and concerts allows the stations to gain listeners with ticket giveaways and other promotions, while increasing attendance at concerts and other live events. But the company says it does not have a policy to exclude competitors and does not negotiate airplay with touring acts.

Company executives say the synergy between radio stations and concerts has generated millions of dollars in additional profit and played a key role in a 12% increase in concert revenue in the first six months. Industry analysts note that another critical factor could be that through the first half of the year, average ticket prices for the top 50 tours--many of which are promoted by Clear Channel--have increased 6.7%.

As a result of its consolidation, the suit says, Clear Channel has been able to book an act's national tour and cut out promoters in local markets. To secure certain acts' tours, according to the lawsuit, Clear Channel sometimes offers artists a fee in excess of 100% of their ticket sales.

In Denver, Clear Channel owns or operates eight radio stations, including the only three dedicated to the rock-music format, the lawsuit states. That ownership allows the company to dictate the level of airplay and promotion for every rock act playing the city, the lawsuit claims.

Nobody in Particular Presents said Clear Channel's stations have consigned competitors' concert ads to "undesirable" times, charged premium rates or tried to exclude them.