Clear Channel death knell?

A Vanishing Breed

By Tim Stinson

INDIE PROMOTERS: VANISHING ... OOPS! Not So Fast!

Clear Channel giving up the ghost? Well, hardly. But deciding to split off their live entertainment division from radio and billboards was surprising - and loudly cheered. Long derided as the "Evil Empire," the Darth Vaders of show biz huffed and puffed for years about their innocent intentions. No one bought it. Fill in the blank: "Absolute power corrupts ___."

Independent concert promoters had been given up years ago as a vanishing breed – until now. Here it is, bottom of the ninth, a new pitcher takes the mound, the pitch – and Mighty Casey has grounded to second.

Far to the east, rumbles are heard from the offices of New York Attorney General Eliot Spitzer, who is notorious for bringing down big bullies, regardless of their size. Insurance companies and stockbrokers quake at the mention of his name. Spitzer has not (yet) made a move toward CC, but rumors abound that it would be his next high profile target. From a national perspective, the tears shed over this possibility could be collected in a tiny eyedropper. CSI Miami would have trouble finding enough DNA for a match. Will Clear Channel be the next vanishing breed trophy on Spitzer's wall? It's not like they are the world's last ivory-producing elephant. As founder Lowry Mays was so fond of saying, as he did to Fortune Magazine, “We’re not in the business of providing well-researched music. We’re simply in the business of selling our customers’ products." Nice philosophy. Music lovers were appalled.

The death blow came from a pair of lawsuits, one from a relatively minor player and one from a heavyweight. When tiny Denver promoter Nobody In Particular Presents (NIPP) sued Clear Channel (CC) for interfering with their right to make a living promoting concerts, everyone (in San Antonio) snickered. Right! Like NIPP was going to be more than a mosquito bite on CC's massive and bloated butt.

Uh-oh! Complaints began to pile up that Denver CC radio was not cooperating to its fullest when NIPP wanted to buy time, give away tickets on the air and have DJs talk it up when NIPP tickets went on sale. Nope, CC told NIPP, in essence, here's a microphone and two bucks - start your own station if you want to promote your concerts. You might say that was like kicking a midget. It got everyone mad. No one likes a bully. Not in third grade; not now.

CC was not amused, and went on their merry way. This pipsqueak NIPP in Denver was not going to stand in THEIR way. Then NIPP did something amazing. They filed an antitrust suit in Denver federal court in 2001, alleging that CC had been using monopolistic, predatory and anti-competitive business practices to run NIPP out of the concert biz. NIPP claimed that CC penalized music artists using NIPP as their promoter by banning those artists' music from Clear Channel radio stations in Denver.

Not one single record label executive on the face of the planet will be quoted for attribution when it comes to criticizing Clear Channel, for fear of losing airplay on all of their 1,200 radio stations nationwide. CC, of course, says that's only 10% of the total. ONLY? The total, remember, counts a lot of polka (and Yanni) music stations. They do, however, control about 60% of rock music radio in America. CC has argued that aggressive business practices are the way to survive today, but others (again, none of whom agree to be quoted) characterize their methods as more closely akin to Vlad Dracula.

NIPP alleged that they had offered guarantees to bands that were higher than CC's, only to have the bands back out at the last minute, when CC threatened bands' managers and record labels that airplay for forthcoming singles might be (whisper, whisper) .. ah, diminished, shall we say?

There are eight CC radio stations in Denver, so anyone from Outkast to Blink-182 to the Osmond Brothers is going to have to pay homage on bended knee to the broadcast behemoth. That is, if they want to play Denver, the #22 market in the U.S.

You recall, of course, the 1995 fight between Pearl Jam and Ticketmaster. It was more of a holy war. The band decided to tour without Ticketmaster's enormously inflated service charges, alleging that they monopolize the ticket service industry. They tried the antitrust gambit, but it didn't work. Pearl Jam lost fans and the lawsuit. Then jam band String Cheese Incident tried the same thing nearly a decade later. Neither one brought down the ticketing giant. CC must have had these losing lawsuits in mind when sneering over their shoulder at NIPP.

It may also have been over-confidence with their pals in government. In 2003, they spent $1.28 million in lobbying. Antitrust bills with CC's name on them stayed filed away in the same place that Indiana Jones' box with the Ark of the Covenant was stored. The FCC appeared to have inserted custom earplugs to block out the gathering storm. Colin Powell's son, Michael, eventually left the FCC after withering criticism of his non-intervention.

It looked like CC was rolling up its sleeves for a lengthy court battle, for SURELY their billion-buck barrel of cash would drive NIPP into the poor house before the sun would ever shine over their view of the Rockies again. Then - *gasp!* - a secret and sealed settlement was reached between CC and NIPP, with nobody admitting to anything. Just: here's the cash, now shut up! Kind of like Michael Jackson paying $20 million in 1993 to make his teenage accuser suddenly develop an acute case of amnesia. Nothing illegal happened! Now just shut up, all you media leeches! (I thought Little Richard had the exclusive rights to "shut up!")

Since that settlement, NIPP has settled back into presenting Denver with powerhouse events like the 2nd Annual Modern Drunkard Magazine Convention and Caribou (formerly Dan Snaith's Manitoba). Tell me: why, oh WHY did CC ever try to pick on such an insignificant competitor? Because they could. Why did the Soviet Union annex Hungary? Because they could.

But the nail in the CC coffin came from SOMEBODY in particular - one you should never cross in Chicago - Jam Productions. Jam Productions is the largest independent concert promoter in the United States. Underline independent. For thirty years, they've presented shows in the Windy City, and are really good at it. They know the market; they know their customers. Jerry Mickelson, president and founder of the Chicago-based concert promoter, is one of the original icons of the industry, along with Bill Graham, John Scher, Ron Delsener and a handful of others. But Mickelson refused the big payday when CC went on a buying spree to scoop up all the regional promoters and their outdoor venues. He remained independent.

Jam's complaint against CC had nothing to do with a music artist, but dirt-track motorcycle racing. Instead of all the allegations, let's cut right to the bottom line (which is all CC understands anyway). A jury in Chicago - a FEDERAL jury - found that CC interfered with a competitor's agreement and its relationships with Supercross, a nationwide competition featuring motorcycle racing in stadiums.

Jam's attorneys claimed Clear Channel plotted to intimidate stadium owners and the American Motorcycle Association after learning Jam was set to land the deal. Attorneys for Jam argued that CC used its market clout to pressure stadium operators into denying Jam booking dates for its Supercross series by threatening to pull other events, such as concerts and monster truck meets.

The jury agreed with Jam, and ordered Clear Channel to pay $17 million in lost profits and $73 million in punitive damages, for a total of $90 million. Ooof! A shot right to the gut. The case just might embolden regulators and competitors to look at how Clear Channel does business. Eliot Spitzer? Are you listening? And what does that mean to you guys who provide sound, lighting, staging, backline and all the services that a concert USED to ask you to bid on? Maybe now you’ve got a shot at it again. That is, if this dream scenario were to take shape:

What would put the icing on the cake would be for each one of the regional concert promoters to buy back their companies from CC – for half of what they were paid for them – and to go back into the business they were in before CC: negotiating with agents over each and every show, haggling with the radio stations and keeping the ticket price within the reach of poverty-stricken college students. It’s happened before. Remember Irvin Feld? In 1971, he sold Ringling Bros. Circus to corporate klutz Mattel Corp. for $50 million in stock. Mattel got in big trouble with stockholders (sound familiar, CC?), and in 1982, Feld bought back the circus for $22.8 million. Half of what he'd sold it for.
It seems like no one will ever do the right thing just because it's morally correct. They have to be dragged kicking and screaming into the light. Even Darth Vader.

Tim Stinson writes from a road trip on old U.S. Route 66, the "Mother Road," enjoying Americana as it used to be. So far, he's found a bunch of fallen-down old motels and roadside cafés with beehive-hairdo waitresses, and is savoring rockabilly music havens in retro bowling alleys everywhere. He's also co-founder of www.DoorsAt7.com, a comprehensive self-publishing search engine for live event and tour production professionals. He checks e-mail quarterly or so at route66rockabilly@yahoo.comroute66rockabilly@yahoo.com

Hoorah, say I.