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Clear Channel Goes to Trial

Concert and radio giant charged with crushing competition

April 20, 2004 12:00 AM ET

In a legal setback for the world's largest concert promoter, Clear Channel Communications, a U.S. District Court judge granted a jury trial to a Denver competitor that accuses the company of "monopolistic and predatory practices."

Judge Edward W. Nottingham's 125-page ruling, which mentions Puddle of Mudd, Orgy and the Tattoo the Earth Tour (headlined by Slipknot), says the evidence suggests Clear Channel illegally reduced radio airplay for artists who booked concert tours with competing promoters.

"We feel pretty vindicated," says Jesse Morreale, co-owner of Nobody in Particular Presents, which filed the lawsuit against the San Antonio, Texas, radio-and-concert conglomerate in August 2001.

Clear Channel's chief legal officer, Andrew Levin, also responded positively to the ruling, noting that Nottingham threw out some of the most serious charges. He decided, for example, that Clear Channel did not have a monopoly on Denver's rock-concert market, because it controlled less than seventy percent of the business. "A few remaining parts of the case will proceed to trial," Levin says. "And we're confident these allegations ultimately will be dismissed, as well."

But evidence in court documents suggests that Clear Channel -- which owns more than 1,200 radio stations -- aimed to severely damage its Denver competitors and the artists who worked with them. The most dramatic details are found in e-mails from Michael O'Connor, director of programming for Clear Channel's five FM stations in Denver. When the 2001 Styx/Bad Company tour selected House of Blues as its promoter, O'Connor instructed his radio underlings to "crush" HOB and avoid mentioning the concert on its classic-rock stations. O'Connor added, "Let's get our fucksticks out."

Testimony from managers at Roadrunner Records and Reprise also indicates that bands agreed to play Clear Channel venues because they feared losing airplay on Clear Channel stations if they signed with a competitor. Nobody in Particular, the Denver promoter, also accuses the company of paying artists sky-high tour salaries to kill competition.

If these claims are upheld -- the trial starts August 2nd -- other cases would likely follow, says John Solow, an antitrust expert and professor at the University of Iowa: "It would open the door to lots of people saying, 'You did it to us, too!'"

Doug Kauffman, Nobody in Particular's president and founder, says he just wants to do business as he did before Clear Channel had so much power. "We hope [the case] sets some precedent that would stop this kind of heavy-handed behavior and give us independent companies some relief," he says. "So we can operate like we always have."

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