We expected Barry Fey, head of the Denver extension of House of Blues Concerts and sworn battlefield warrior in the local concert-promotions war, to have an opinion about the possible sale of his company to Clear Channel Entertainment. Clear Channel, which had made moves to acquire the heart of the HOB operation in the past, even back in its pre-Blues days as Universal Concerts, is rumored to have outbid other potential buyers -- Key3Media Group and Phil Anschutz's Concerts West -- by more than a million dollars, effectively sending HOB's reported price tag of $273 million well over the gross national product of many small countries. HOB is in desperate need of a buyer, and one with deep pockets: The company, which owns clubs and amphitheaters across the country, has taken a financial beating over the past year and had to cancel plans for a number of new HOB clubs, including one slated for Larimer Square. Although Fey and his counterpart at Clear Channel, former Fey partner Chuck Morris, both say that they have no knowledge of when or how the deal will go down (calls to the national offices of both HOB and Clear Channel went unreturned), a decision by HOB's board of directors is expected as early as the end of this week.
For Fey, this timetable suggests he could be clearing out his desk by May Day. Since returning to the concert realm last year, ("His Way," August 23, 2001), he's been very clear about his opinion of the Clear Channel collective, which flexes considerable muscle in the radio and outdoor-advertising worlds, as well as in the live-music arena. Fey has used all manner of colorful verbiage to describe his most potent competitor, a company that is currently on the defendant side of an anti-trust lawsuit filed by Fey ally Nobody in Particular Presents. "They're Satan" he told Backwash, and plenty of other people, last summer.
So imagine Backwash's surprise to hear that Fey would now wholeheartedly support the sale of HOB to Clear Channel. "As one of the founders of a business that has gone to hell, this is really the only way that we can get away from this state of pure madness," Fey says. "If Clear Channel buys us, it will allow the business to calm down and breathe a little bit. I think it's positive, and I know that directly contradicts everything I've said up until this point."
Yeah? Like the heated hyperbole in which Fey accused Clear Channel of sucking "the heart and soul out of the concert business"? Of playing dirty, of screwing competitors, of using its power as a radio giant to leverage control over artists and squash the little guy?"You wouldn't have to have that level of nastiness, because the fighting would stop," Fey explains. "It would be like the Wild West. When the town was tame, Doc Holliday didn't have to shoot anyone in the back."
According to Fey's newfangled logic, a HOB/Clear Channel consolidation would stabilize a concert industry gone cuckoo and lower the runaway ticket prices that have become the norm. In theory, when promoters stop trying to outbid each other for artists, artists' fees go down, to the benefit of the concertgoer -- and that's a welcome notion to music lovers who've recently been asked to pay enormous sums for live shows. (Many seats at Sir Paul McCartney's upcoming appearance at the Pepsi Center, for example, are going for more than $250, quite a bit of cash to cough up in order to sit in a hockey arena.) If it succeeds in buying HOB, Clear Channel would run virtually every room in town, save a couple of smallish venues operated by NIPP and a smattering of other independent companies -- which means it would essentially dictate who played what room and when. And ticket buyers, many of whom don't care what promoter's logo is embossed on their stubs, would happily save a little scratch.
"Usually competition is good for consumers," Fey says. "But in this situation, with the way things are, it's been the opposite. It's good for the artist, because the competition is just so heated and nasty and outrageous. Artists don't even have to ask for these huge sums, because promoters are just offering them up so they don't lose the date to the other guy."
Of course, not everyone will be expected to share Fey's surprising enthusiasm at the prospect of a concert market dominated by one major company, even if that company employs a system (as Fey envisions it) that uses lots of competent promoters (like Morris) operating autonomously around the country. Clear Channel's reputation as a bully that uses its radio power to unfairly gain both audiences and artists in the live arena is notorious in the music industry, although it's not easy to find anyone who's willing to say so on record -- and it may soon become even less so (see "Taking on the Empire," August 23, 2001). Questions of monopoly and anti-trust violations already hover over the corporation's many-faced head, with a handful of lawmakers in Washington, D.C., putting increased pressure on the Department of Justice to investigate. In a recent letter to the DOJ, Representative Anthony Weiner, a New York Democrat, described "a pattern of behavior by Clear Channel that is anti-competitive and harmful to consumers, venue owners and artists."
Should Clear Channel's acquisition of HOB move forward, the deal could be tied up in anti-trust litigation for a long, long time -- a scenario that has led some music-industry insiders to speculate that HOB might take one of the lower bids from Key3Media or Concerts West. Those who enjoy a good fight might hope for the latter: With Anschutz's money behind them, HOB promoters would have a lot more power to stay in the ring with Clear Channel. Alas, according to Fey, that prospect doesn't hold too much appeal for the HOB board, which is interested primarily in the bottom line.
"To them, a million dollars is a million dollars," Fey says. "They don't care what happens once a sale is made. At that point, if it gets tied up [by the Department of Justice], it's really a Clear Channel matter. But they must be pretty confident that that's not going to happen, because they are coming on so strong."
Clear the way.
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