In 2001, House of Blues took on the task of promoting a double bill featuring classic-rockers Styx and Bad Company, picking a station then known as the Hawk as its radio partner. Apparently, this choice didn't thrill the folks at Clear Channel Communications, whose concert-promotion and radio branches were bypassed by the bands. Internal messages at Clear Channel's Denver arm declared, "Let's crush the Hawk and HOB on this show," "Hope you will tow [sic] the line," "Avoid accepting advertising" and, most memorably, "Let's get our fucksticks out."
Aside from inserting an asterisk into "fucksticks," U.S. District Court Judge Edward Nottingham included the quotes above, and others just as grabby, in an April 2 ruling on a lawsuit pitting local promotion firm Nobody in Particular Presents against Clear Channel, a San Antonio company that leads the nation in radio-station ownership and the sale of concert tickets. The suit, filed in August 2001, maintains that Clear Channel violated federal and state anti-trust statutes via a bevy of unfair business practices ("Taking on the Empire," August 23, 2001).
In its response to NIPP's filing, Clear Channel, which owns KTCL and seven other stations in Denver (the maximum number allowed by the FCC), denied these allegations and asked Nottingham to toss out the entire suit on a summary judgment. The judge's ruling fell far short of such action. He dismissed NIPP claims of monopolization dealing with, among other things, predatory ticket pricing: Although Clear Channel controls just over half the local rock-concert market, Nottingham asserted that "lower courts generally require a minimum market share between 70 percent and 80 percent" to consider such contentions. However, he let NIPP go forward with monopoly charges based on the notion that radio stations are essential to promoting rock concerts, and said documentation that Clear Channel was attempting to create a monopoly was sufficient to justify taking the next legal step. A court date of August 2 has been set, with a five-week jury trial anticipated.
For Doug Kauffman, NIPP's founder and president, Nottingham's opinion is a vindication of sorts. "I hope this at least proves our suit wasn't some frivolous thing," he says. "The ruling contains a large amount of back-up and has some real teeth to it."
Adds Jesse Morreale, who no longer has day-to-day duties at NIPP but remains a partner in the operation, "The judge saw our points about the behavior they engaged in, and that they still engage in. We're happy we'll be able to go in front of a jury and share our experiences."
Clear Channel is putting its best face on the ruling. In a statement, Andrew Levin, chief legal officer for the corporation, writes, "We are very pleased the Court threw out several major claims against us that had absolutely no merit. A few remaining parts of the case will proceed to trial, and we're confident these allegations ultimately will be dismissed as well." For his part, John Francis of Davis, Graham & Stubbs, one of the law firms on NIPP's team, holds that the majority of the suit was left intact. "We are very pleased with the judge's decision and are looking forward to presenting our case to a jury as soon as possible," he says.
Central to NIPP's complaints are accusations that Clear Channel illegally pressures acts into signing with its concert-promotion division by telling them that if they work with another promoter, their airplay will end. Most of the evidence presented by NIPP to support this theory remains under seal, but Nottingham's decision reveals some tantalizing samples, many of them starring Mike O'Connor, Clear Channel's director of FM programming. (O'Connor declined comment for this story.) Roadrunner Records' Jason Martin testified that in 2000, after the Peak, a defunct Clear Channel rival, won the right to promote a package tour featuring several Roadrunner acts, O'Connor said he'd rid his playlist of the label's songs as punishment. Dave Lancao, another Roadrunner employee, added that O'Connor e-mailed managers of bands on the imprint, advising them to stop using NIPP if they wanted Clear Channel airplay.
The folks at Reprise Records received similar treatment that year, according to the 125-page document, with O'Connor announcing, "We are out of business with your label," "I have left instructions for KTCL to have NO relations with Reprise" and "You can all go fuck yourselves as far as I'm concerned." (Yes, Nottingham spelled "fuck" with an asterisk.) Later, in 2001, Puddle of Mudd saw its Clear Channel airplay dry up after letting NIPP promote a Denver show -- an example of a procedure O'Connor referred to in an e-mail to company supervisors. "I encourage you to communicate our new policy concerning artist promotion to labels in advance, so they understand why we might potentially be in a position to ignore their artist's appearance in the Denver market," he stated.
A kinder, gentler 2001 message from O'Connor to Tom Owens, vice president of programming for Clear Channel Radio, acknowledged how common using the "threat of airplay to take shows away from another promoter in the market" had become in Denver. O'Connor called this phenomenon "very VERY dangerous," and revealed that he was "collecting letters of denial every time this comes up so that the radio side is covered. It has come up at least five times in the last 3 months."
The Nottingham ruling also tackles another controversial radio subject: so-called indie promoters. These insiders, not to be confused with concert promoters, pay a station access fees -- often in the five- and six-figure range -- to pitch songs; if the tunes are added to the outlet's playlists, the indies receive a monetary reward from the act's record label. Critics see this practice as akin to payola, the outlawed practice of bribing stations to air recordings, and Nottingham likens it to a "black market." He believes that "a black market can be considered a relevant market for antitrust purposes when the behavior in the black market is alleged to have anti-competitive effects."
Were a jury to agree with this logic, its conclusions could have national repercussions on indie promotion. "This is a judge who I think is really stretching the boundaries," says Adam Jacobson, radio editor for the trade publication Radio and Records. Jacobson is concerned that a practice he sees as having a mostly positive impact on musical diversity might be nixed because some people exploit it. Gary Bongiovanni, editor in chief of the concert trade mag Pollstar, feels other aspects of the broadcast industry might be impacted, too, if NIPP succeeds in court. "This is the only real challenge to Clear Channel, at least as it relates to the concert business and its radio stations, that I'm aware of," Bongiovanni says. "So the implications are obviously broader than just Denver."
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Clear Channel could prevent a precedent from being set by reaching a settlement with NIPP -- a move that would be in keeping with its attempts to avoid bad press in the past year or so. In April 2003, after Wisconsin senator Russ Feingold and others began scrutinizing indie promoters in radio, Clear Channel announced that it would no longer use them. More recently, the firm responded to the prospect of higher fines for indecency in the wake of Janet Jackson's Super Boob scandal by removing veteran envelope-pusher Howard Stern from six of its stations and by making a public show of policing itself; the brief, headline-generating suspension of the KBPI morning crew last month is a case in point. Given that Clear Channel seems as if it would rather switch than fight these days, Bongiovanni says, "I don't know that we'll ever see a jury verdict in this trial."
Either way, NIPP's continuing battle with Clear Channel has taken its toll. NIPP ran up a large debt to House of Blues that it's in the midst of paying off, and earlier this year, the company had to work out a plan to pay back taxes after city officials shut its offices. When asked if the stress and expense created by the suit helped convince him to reduce his role at NIPP, Morreale says, "Absolutely."
"It's put a tremendous strain on our company," Kauffman admits. "You can't attribute 100 percent of what happened to it, but it's definitely been a major factor."
Still, Kauffman's delighted that Nottingham is letting his quest move forward and would love nothing more than for NIPP's suit to help change the way Clear Channel does business. "If we can play any part in that happening," he says, "then it's our pleasure."