Taking on the Empire

A local lawsuit against the world's largest radio/concert firm threatens to expose the dark side of the entertainment business.

Predictably, Clear Channel's Don Howe disagrees with this assessment. In June he said, "We get a lot of benefits from having eight stations. I think the programming is more diverse and the research is stronger. That's been the result of conglomeration."

So, too, are rivers of cash, as a glimpse into Clear Channel's coffers confirms. On August 7, the day after NIPP's suit was filed, the company issued its quarterly report, and the news was almost all good. In the second quarter of 2001, net revenues were up 126 percent over the same period the previous year, to a stunning $2.2 billion, and the revenues at its radio division zoomed up 96 percent, to $941 million. Radio did suffer "a pro forma revenue decline of 6 percent," the report noted, but the dropoff was below industry average by 25 percent.

With such resources at hand, NIPP has a difficult row to hoe with its lawsuit, says Andrew Cohen, legal analyst for CBS Radio and Channel 4. Cohen, whose wife works for Davis, Graham & Stubbs but is not involved in the NIPP suit, says the complaint "is in the ballpark; it isn't a slam dunk for the defense." But he believes that the complexity of the case, coupled with Clear Channel's likely strategy of delay, which most large companies use when battling in court with smaller adversaries, means it could take between five and ten years before a resolution is reached.

Chris Swank, Doug Kauffman and Jesse Morreale of Nobody in Particular Presents are standing up to Clear Channel.
John Johnston
Chris Swank, Doug Kauffman and Jesse Morreale of Nobody in Particular Presents are standing up to Clear Channel.
Clear Channel's FleetBoston Pavilion is the model for a planned Denver venue whose tent was previously used at Boston's Harborlights Pavilion.
Clear Channel's FleetBoston Pavilion is the model for a planned Denver venue whose tent was previously used at Boston's Harborlights Pavilion.

"I feel pretty confident that this is the beginning of a very, very long, expensive, drawn-out, bitter brawl, and when it's over, if it's over in our lifetime, it's going to have a significant impact on one side or the other," Cohen says.

Kauffman and Morreale say they're willing to slug it out as long as it takes, and they're encouraged by the participation of Walter Gerash, who seems to be spoiling for a scrap. "We're going to bat it out with those big guys," Gerash says, "and obviously, there's going to be a battle. This is what's been happening in the real world ever since the creation of capitalism: There's been a tendency to monopolize and structure the markets in order to make more profits. That's why we have the Sherman Act and the Clayton Act."

The NIPP partners also see positives in the appointment of U.S. District Judge Edward Nottingham, a no-nonsense type if there ever was one, to the case: In the past, Nottingham's made attorneys who've wasted his time with bickering appear before his bench at 6:30 a.m.

Then again, they can't help but notice that more and more of their peers are finding it easier to switch than fight. In January, Danny Zelisko, owner of Evening Star, a Phoenix promotion company, sold to SFX just a year and a half after starting an independent promoters' organization, and Cleveland's venerable Belkin Productions, which had been around for thirty years, surrendered to SFX in May.

"There's hardly anyone left," Kauffman says.

"Yeah," Morreale concurs. "We're the only ones who can hold up the flag."

Concludes Kauffman, "We're the last of the Mohicans."

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