Taking on the Empire
Like most people in the live-music trade, Doug Kauffman, Jesse Morreale and Chris Swank, the three partners behind the promotion firm Nobody in Particular Presents, are colorful, argumentative, shoot-from-the-lip types. But not these days. Ever since August 6, when NIPP filed a lawsuit in U.S. District Court in Denver against radio-and-promotion powerhouse Clear Channel, they've been restrained and guarded, thoroughly examining every word that springs to mind before letting it out of their mouths.
"We've got to be careful," Morreale explains. "Very careful."
Clear Channel, based in San Antonio, Texas, is plenty big enough to justify such caution. The company and its various subsidiaries own approximately 1,200 radio stations in the United States (and several hundred more overseas). It also holds Premiere Radio Networks, the country's most prominent purveyor of syndicated radio programming (Rush Limbaugh and Dr. Laura Schlessinger head its talent roster); nineteen television stations; over 700,000 billboards and related advertising forums; and Clear Channel Entertainment, a live-event arm (known until July as SFX) that dominates the concert medium from sea to shining sea.
But mere size, unprecedented though it might be, doesn't fully explain the fear Clear Channel engenders among inhabitants of the radio-and-promotion universe. The company has also earned a reputation for ruthlessness and ethically debatable activities that raise eyebrows, and hackles, even among industry veterans who thought they'd seen it all.
As reported by Salon.com, a muckraking Web publication that's posted numerous Clear Channel exposés, several suits have been filed against Clear Channel stations by former employees in Florida, citing allegations ranging from broken contracts to sexual harassment. But before now, no one had accused the company of violating monopoly and/or anti-trust statutes -- and the men of Nobody in Particular Presents, a firm whose modesty was until recently underscored by the decision to spell its name entirely in lowercase letters, think it's about time an injured party did.
"Somebody has to take them on, and it might as well be us," says NIPP founder Kauffman. "This company's always fought the good fight; it's epitomized independence and the entrepreneurial spirit, and we feel we have the right to do business without unfair interference. This is America, is it not?"
NIPP's suit asks for damages and injunctive relief "arising out of unlawful and anti-competitive practices" that have prevented "NIPP and others from competing to offer concert promotion services in Denver" and elsewhere. According to the suit, "Clear Channel has built a monopolistic, multimedia empire that is severely harming NIPP's ability to compete, decreasing overall competition and resulting in higher prices and fewer offerings for consumers."
Other charges contained in the suit:
Artists or bands are coerced into signing up with Clear Channel via an assortment of heavy-handed tactics, including the "nationwide practice of threatening to deny and in fact denying critical airplay and other on-air promotional support."
By guaranteeing some artists "more than 100 percent of gross sales to promote their concerts," Clear Channel makes it impossible for challengers to bid on important shows.
When NIPP has tried to promote its events on Clear Channel signals, station representatives have "either limited advertising availability to undesirable timings and placements or eliminated it completely; charged NIPP excessive advertising rates; misrepresented the availability of advertising time (e.g., by telling NIPP that Clear Channel is 'out of inventory' when it actually ran its own advertisements instead); intentionally excluded artists promoted by NIPP from their 'concert calendars'...; and eliminated miscellaneous promotions (such as ticket giveaway contests) for artists promoted by NIPP."
The complaint is wide-ranging and thorough, as would be expected from the legal talent behind it -- namely, Davis, Graham & Stubbs, a grade-A firm, and flashy defense attorney Walter Gerash. Firms like this don't come cheap, and while NIPP has some notable assets (the company controls lease rights on two local theaters, the Ogden and the Bluebird), it's unlikely to be listed in the Fortune 500, or even the Fortune 5,000, anytime soon. Consequently, observers have speculated that NIPP is receiving financial assistance from another source, but Kauffman denies this. "Nobody's involved except us," he says.
Neither Kauffman nor Morreale will discuss the evidence they've accumulated to support their claims, preferring to unveil it only if the case reaches the discovery phase. (By agreement with NIPP's legal team, lawyers for Jones Day, the massive Washington, D.C., firm representing Clear Channel, have sixty days from the date of filing to respond to the suit's allegations. Discovery technically can begin shortly after that point but is apt to be held up by legal maneuvering.)
Pam Taylor, official spokeswoman for Clear Channel, isn't one for spilling beans, either. She says only, "We haven't done anything wrong, and we'll vigorously defend ourselves in court. We compete hard, but we compete fairly. I'm sorry that this had to go to court, because we'd rather fight this out in the marketplace, where it belongs."
And supervisors at Clear Channel's Denver branch are even more closemouthed. Chuck Morris, head of Clear Channel's concert enterprises in Denver, wouldn't discuss the suit. Mike O'Connor, director of FM programming and program director of alternative-rock outlet KTCL, a defendant in the suit along with four FM sister stations, adult-rocking KBCO, hard-rocking KBPI, classic-rocking KRFX (the Fox) and contemporary-hit-radio supplier KFMD (KISS), says only, "I'm not going to comment on it other than to say there's nothing to it, and I'm just going to let our lawyers deal with it." KBPI program director Bob Richards and vice president and general manager Don Howe didn't return phone calls.
But in an interview in late June, six weeks prior to the filing of the suit, Howe -- whose stations play up Clear Channel's muscle via the slogan "Feel the Power!" -- spoke freely about some of the issues that ultimately found their way into the NIPP document. At the time, Howe had a good idea that NIPP was gathering evidence against Clear Channel, thanks to an e-mail that a former NIPP employee inadvertently sent to more than twenty people with Clear Channel affiliations, as well as to journalists throughout the area (including two at Westword). In the message, the ex-employee, who declined to comment for this story beyond confirming the accuracy of the e-mail, wrote, "I really liked what I did at NIPP, [but] unfortunately there was a conflict of interest...They wanted me to compile information on Clear Channel in an illegal way for a potential lawsuit...All I have to say is, Linda Tripp."
"That former employee resigned because the employee was asked to tape conversations, and after the employee declined, the employee found out that these conversations were in fact being taped," Howe said in June, noting, "We heard that Jesse [Morreale] was doing it."
(In response, Morreale says, "We have not done anything illegal, nor did we ask this employee or any other employee to do anything illegal. If, in the course of the case, information that backs up the claims that we have made in the complaint comes to light and that information is documented, that's simply a result of Clear Channel's actions and us documenting them, and not because we did anything illegal.")
"The whole thing is pretty ridiculous, really," Howe said back in June. "There are rival concert promoters who like to cry foul when they don't get an act and we do, but there's no truth to the rumors that we conduct business in the ways they say we do. Without commenting on anything specific, I would say that anytime you are a leader within your industry, you're going to take shots from people. But Clear Channel is a wonderful organization, and we're on a tremendous growth curve. We have a lot of assets to pull together for the greater benefit of our advertisers and listeners -- and generally the only comments to the contrary we hear are from competitors who either don't have the same advantages or just haven't figured out how to keep up with us."
Even Clear Channel critics who fit this description are often reticent to go public; in the end, only a few agreed to let their names be used by Westword. But well over a dozen more, representing radio-station personnel, agents, managers, promoters and record-label staffers, spoke after being promised that they would remain anonymous and that no clues (such as band names) would be included that might allow those at Clear Channel to identify them. An equal number of others said that while they'd heard such stories, they hadn't experienced such mistreatment personally.
While the Clear Channel detractors universally applauded NIPP for stepping forward, they disagreed about the odds of victory. Several said that Clear Channel uses implication and inference to get its way, rather than the sort of blatant intimidation that would look bad in court, and others doubted that NIPP has the financial wherewithal to bring such a giant to its knees. But taken as a whole, their observations paint a picture of a company with virtually limitless strength and influence that regularly pushes the edges of good taste, fair play and, many argue, legality, even as it inflames passions and frustrations like only a few corporations in the history of American business.
"These guys can crush you from so many angles it's incredible," says a source. "They sit there and look you in the eye and basically tell you they'll fuck with you. They're just evil fucks."
Anyone expecting the government to slow Clear Channel's march toward global domination is bound to be disappointed. Even before his election, George W. Bush signaled that he had different opinions than Bill Clinton about what constitutes a monopoly, saying that he preferred "innovation over litigation" in reference to the prosecution of Microsoft for alleged anti-competitive practices.
Since Bush took office, the Justice Department, under Attorney General John Ashcroft, hasn't gone after any other big fish -- and Clear Channel almost certainly will not be the first on the hook. The company's chairman, L. Lowry Mays, is a personal friend of Bush's father, ex-president George Bush, and has made sizable donations to the senior Bush's proposed presidential library. Furthermore, the Associated Press reported in June, Clear Channel donated $80,000 to the Republican National Committee last year, and Mays and his wife, Peggy, personally gave the Republican Party and/or the George W. Bush campaign over $30,000 more.
Mays hasn't always been such a player. When Clear Channel got its start in 1972, it did so in relatively modest fashion, with the purchase of a single radio station, KAJA-FM. (Mays was assisted in the deal by Red McCombs, who once owned the Denver Nuggets and now holds the deed on the Minnesota Vikings football team.) In 1984 the company acquired Broad Street Communications, which sported radio properties in Oklahoma City, New Orleans and New Haven, Connecticut. Four years later, the purchase of a TV station in Mobile, Alabama, spurred the creation of a television branch. Yet in 1995 the company was a mere mouse compared to its current elephantine self, with just 16 TV stations and 43 radio stations in 32 markets.
The Telecommunication Act of 1996, a bill that businessmen love and folks who oppose monopolization see as an absolute calamity, changed all that. The legislation, signed into law by President Clinton, doubled the limits of station ownership in a single market from four to eight (Clear Channel is at the cutoff point in Denver) and lifted the barrier on the number of stations a company could possess overall; just ten years ago, the maximum number of stations one company could own was 28. With the sky suddenly the limit, Clear Channel went on a spending spree. At the end of 1997, following the acquisition of a 43-station group owned by Paxson Communications Corporation, the company owned 173 stations -- a number that had grown to 870 by 1999, when Clear Channel picked up AMFM Inc. for $23.5 billion.
Subsequent purchases have continued at such a dizzying pace that the present 1,200-station figure is only an estimate. Tomorrow there may be more -- a point underlined by a news parody floating around the Internet titled "Clear Channel's Heavenly Acquisition," which reports that the company will take over "the popular afterlife destination sometime in the early fall." In the piece, an executive calls the deal "a great achievement for a great company. We're pleased with Heaven. However, there will be a few changes taking place in the next couple of years."
Such as? "The Pearly Gates have been replaced by a plastic shower curtain."
As this one-liner implies, Clear Channel was initially known less for its brutality than for its stinginess. Radio observers did and do call it "Cheap Channel," in tribute to its zeal for cutting costs to the bone -- and sometimes beyond it. An oft-cited example is Clear Channel's fondness for voicetracking, a technique that allows a DJ in one city to seemingly host local shows in as many as half a dozen others ("Live From Denver -- Almost," December 16, 1999). Clear Channel executive Sean Compton defended voicetracking earlier this month at Morning Show Boot Camp, an annual radio convention staged this year in Las Vegas, with this statement: "It makes too much sense to take the best resources in our company and spread them out to all our stations."
Radio & Records, the music-industry publication and Web site that reported Compton's remarks, was accused of being in thrall to Clear Channel in an August 6 Salon article. The Web site hinted that when R&R reduced the number of stations it surveys to determine its playlists from 200 to 140, it did so at the behest of Clear Channel, which gains even greater sway under the new system.
Ron Rodrigues, R&R's editor-in-chief, denies this charge -- but he also thinks it's unreasonable to blame Clear Channel for voicetracking's proliferation. As he points out, plenty of companies now use the technique, which was innovated by Capstar Broadcasting, a onetime AMFM subsidiary that Rodrigues says set up de facto boiler-room operations he calls "voicetracking farms," which were manned by DJs who never had to set foot in the radio stations that broadcast their shows. Still, he concedes, Clear Channel "is the biggest practitioner of it simply because, in terms of scale, they're the biggest at anything they do. After all, they own around four times as many stations as their nearest competitor. That's why they're such a target of people who don't like consolidation -- because they're kind of the ultimate representation of what happens when industries consolidate. Much as we hate our banks and our supermarkets, we're starting to hate our radio stations."
Perhaps -- but within the industry, Clear Channel wasn't widely loathed until 1998, when it agreed to merge with Covington, Kentucky's Jacor Communications, the company that previously owned all the stations named in NIPP's suit plus three others in Denver (KOA, KHOW and KTLK, all on the AM band).
Over and over again, sources contacted for this story emphasized that Clear Channel didn't traffic in the behavior for which it's now reviled until after the Jacor merger and the installation of Jacor head man Randy Michaels atop Clear Channel's radio division. "It's a Randy Michaels culture," says one. "Back in the Jacor days, some of the things they did, the personal attacks, were so beyond business it was crazy, and that's the way it is in Clear Channel today."
Adds another source, "They're worse in Denver than anywhere else in the country. Compared to anywhere else, Denver is absolutely Vietnam."
Terry Jacobs, the founder of Jacor, incorporated the company in late 1979 and bought his first three radio stations in early 1981; that these outlets specialized in religious programming is an irony radio historians appreciate. Jacobs bought more stations as the decade wore on, including those encompassed by the 1986 purchase of Republic Broadcasting, a Cincinnati chain. Michaels, a former shock jock who'd risen in the executive ranks of another company, Taft Broadcasting, came aboard at the same time.
The next year, in April, Jacor moved into Denver, buying news-talk specialist KOA and KOAQ, an adult-contemporary station, from the A.H. Belo Corporation for $24 million. Cincinnati native Don Howe was soon hired to oversee the sales department at KOAQ, which limped along for two years until the station's format was flipped to classic rock, its call letters were switched to KRFX, and its nickname became the Fox. When stand-up comic Michael Floorwax was made the co-host of the Fox morning show, success followed.
Elsewhere in Jacor Nation, things weren't going as smoothly. As the '90s dawned, the company was so far in debt (the hole was $156 million deep) that it was forced to restructure, selling off several of its acquisitions and slashing management salaries by 15 percent. But a 1992 deal with Chicago's Zell-Chilmark Fund, which is run by Sam Zell, who dubbed himself "the grave dancer" because of his fondness for scooping up companies on the verge of death, kept creditors at bay, and after Jacobs was put out to pasture in 1993, new chairman Michaels went into a buying mode that was only accelerated by the Telecommunication Act of 1996. When it was subsumed into Clear Channel, Jacor held the deeds to 450 stations.
As Jacor mushroomed, many of its stations took on the character of Michaels, a man characterized by supporters as bold and visionary and by enemies as arrogant and cruel. Denver emerged as a microcosm of these qualities. Jacor stations eventually dominated both local ratings and the advertising revenues, but they also earned negative headlines for questionable doings on and off the air.
One notorious Jacor stunt took place in May 1996 on KBPI's morning show, when Joey Teehan, operating at the behest of hosts Dean Myers and Roger Beaty, disrupted services at a local mosque in a moronic attempt to needle former Denver Nuggets guard Mahmoud Abdul-Rauf for declining to stand during the playing of the national anthem. Dean and Rog were suspended, then shipped to another station in Phoenix, and Teehan was briefly excommunicated as well before returning to host the KBPI morning show. The next time he left, it was for a far greater sin, by Jacor standards: poor ratings.
The shenanigans continued behind the scenes, with rival stations usually in the crosshairs. Current Clear Channel executive Mike O'Connor was even on the receiving end of one such prank. In late 1995, when O'Connor was program director of KBCO, which at that time was a few months away from being purchased by Jacor, a station-sponsored charity auction at the Boulder Theater took on an unpleasant aroma when a truck filled with fertilizer and emblazoned with the logo of another rival of Jacor's, the Peak, was left parked directly in front of the venue. An angry O'Connor called the Peak to gripe, only to be told by Peak personnel that they had nothing to do with the truck -- and shortly thereafter, Jacor was revealed to have been the actual perpetrator. Then Jacor-Denver boss Jack Evans, who's now a senior vice president with Clear Channel, wasn't repentant about the gag, saying, "I have spoken directly with the culprits, and they understand now that this type of behavior will not be tolerated. The next time, they are to use a larger truck."
After Jacor and Clear Channel agreed to unite (the October 1998 deal wasn't approved by the FCC until the second half of 1999), this sort of warfare continued. Arguably Jacor's canniest use of devious strategy during its waning days involved syndicated radio offender Howard Stern, whose entry into the Denver market on the Peak (owned at the time by AMFM, then a Jacor competitor), threatened to undermine the ratings at several Jacor stations, the Fox and KBPI included. In April 1999, the day after the shootings at Columbine High School, Stern referred to some of the terrified teenage girls fleeing the school as awfully "good-looking," and wondered why the killers hadn't tried to have sex with them -- an insensitive gibe, sure, but one that provoked only a bare handful of complaints at the Peak. The controversy probably would have ended there had it not been for a mysterious "reader" who left a recording of the offending routine on the voice mail of Dusty Saunders, broadcasting columnist for the Rocky Mountain News and, at the time, host of a talk show on Jacor's KHOW. Saunders attacked Stern in print at his next opportunity, and Jacor stations such as KOA followed suit, stirring up an anti-Stern backlash that eventually drove him from the airwaves in Denver.
Officially, no one in Jacor management admitted that the company exploited the pain and suffering of an entire community to get rid of a radio rival; in 1999, O'Connor said his employees monitored Stern regularly and had a tape of the show in question, but he swore he'd been "sitting on it" until the news got out another way because, as a competitor, "we thought we'd look like we were grandstanding." But Jacor had long made a habit of leaving recordings on the voice-mail systems of media critics in an effort to harm or embarrass talent at other stations.
The carryings-on persisted after the Jacor-Clear Channel merger was blessed by the FCC. Other hijinks that reliable sources believe were perpetrated by Clear Channel during the past two years include:
At the "Big Rock Show," a concert sponsored by the Hawk, a classic-rock station that competes directly with the Fox, a truckload of rocks was dumped in front of the ticket windows at Fiddler's Green, complete with a sign that read: "You want a Big Rock Show? Here are some big rocks." The concert was also flooded with counterfeit all-access passes and fliers stating that anyone who went up to a vendor and announced "The Hawk sucks" would receive two beers for the price of one.
A Peak-sponsored concert at the Fillmore Auditorium (now owned by Clear Channel as part of its purchase of SFX) was disrupted when hundreds of pounds of raw fish were deposited in an area where bands load equipment.
On a number of occasions, agents, managers or band representatives who've scheduled dates presented by non-Clear Channel stations in Denver have received bogus faxes detailing unauthorized promotions intended to insult or confuse the artists.
The logo on the side of a Peak van was splashed with chemicals, destroying it and necessitating an expenditure of hundreds of dollars to get it fixed. On another occasion, Peak personnel at an event where several local stations had erected tents for promotional purposes came upon two youths as they were attempting to set fire to a recreational vehicle owned by the station. The youths escaped to a Clear Channel station's tent.
Flames also figure in a previously unreported tale starring Stephen Meade, aka Willie B., morning-show host for KBPI. Meade found himself in the media glare after two highly publicized incidents: He was convicted last year of animal cruelty in relation to a 1999 on-air routine involving the dropping of a chicken from an upper floor at Clear Channel's headquarters, in the Denver Tech Center, and he was one of the parties accused of damaging private property near Nederland via a September 2000 gathering of off-road-vehicle enthusiasts labeled "Mudfest." But he received no ink for a physical attack on Rover MacDaniels, a former DJ at the Peak.
Three sources say that in late 1999, MacDaniels was sitting in an Old Chicago restaurant in downtown Denver when Meade came up behind him and began pummeling him. Police broke it up, but this incident, combined with other examples of harassment by Meade, such as threatening phone calls and at least one highly provocative appearance at the Peak's downtown Denver headquarters, led to a restraining order against the DJ that required him to stay at least a hundred yards away from MacDaniels and his producer, Erik "Squat" O'Connor, for the next year. Meade did so, but at a Limp Bizkit concert where both stations had a promotional presence, he heckled MacDaniels through a bullhorn and had an assistant purchase numerous Peak T-shirts that he then doused with gasoline and lit ablaze.
MacDaniels, who now lives in Los Angeles, would not discuss the incident, and beyond confirming the basic facts enumerated above, neither would Meade, who wasn't disciplined in any way by Clear Channel. But that's not surprising, considering that Meade's immediate supervisor, KBPI program director Bob Richards, was himself served with a restraining order in November 1995 for his role in a dirty deed aimed at a radio rival, Bryan Schock, program director for the now-defunct 92X. KBPI employees parked the station's van in front of Schock's house and placed a frozen turkey on the lawn beside a sign that read: "Unlike this bird, your goose is cooked. This will be your last Thanksgiving in Colorado."
At some companies, a restraining order under these circumstances might jeopardize a career. At Clear Channel, it means job security.
When Clear Channel bought SFX last year for $4.4 billion, executives talked about "synergy" -- the ability to use radio stations owned by the company to relentlessly promote its own concerts. "By partnering up with SFX, we're able to bring to bear for SFX some very key ingredients of the concert business," Don Howe said, in June. "Which is the research of what artists will do well here and what records sell well here. Those are all things that SFX will benefit from that our competitors will not -- and the benefits flow back to the stations as well."
Similar advantages accrue from radio-station-sponsored multi-act festivals of the sort that have become increasingly familiar throughout the industry over the past decade.
Not that musicians like them much. "The artist can lose two or even three times on these deals," allows Frank Riley of High Road, a California agency that represents artists such as Wilco, Lucinda Williams and Denver's 16 Horsepower. "Many of our artists make their money on live performances, not CD sales. So they have to fly to the city where the festival is, which may make them lose money on a date they could have been headlining, and then they have to fly back, which may make them lose another date -- and on top of that, they may lose a date they would normally have played in that city, and that would have made them a lot more income, because they've already played there on the tour. That's why artists hate them."
In contrast, radio stations adore such festivals. "They call it NTR -- non-traditional revenue," says a source. "A program director forces a band to play for nothing, because the show is supposedly for charity, and slaps a $35 price tag on the ticket. Then he gives the charity $10,000 and pockets half a million. It's out of control."
Jacor certainly wasn't the only radio conglomerate to recognize the profit potential of station-sponsored shows, but it was the first to formalize the arrangement and to attempt to expand it -- and the place it happened was Denver.
In 1998 the company inaugurated Jacor Concerts, handing the reins to former Fey Concerts employee Rob Buswell. At the time, Buswell, who'd already put together numerous radio events for Jacor, wouldn't directly link concert booking and radio support, which could be construed as anti-competitive, but he came awfully close: "Having the stations at our disposal is a nice tool, and it's something that the other promoters in the market don't have to work with. I don't really go to artists or managers or agents and say, 'If you play this show for us versus Universal [now House of Blues], you'll get more spins for your record.' That's not really what we're all about. But by the same token, when we have an artist we're promoting, they'll get a lot of on-air support."
In the end, Jacor Concerts wasn't the cakewalk its founders envisioned. The company was called on the carpet by local promoter Bill Bass, the man behind the Reggae on the Rocks series, for promoting an alternative reggae concert as "Reggae at Red Rocks"; the Jacor Concerts version eventually moved to a smaller venue, where it tanked. Other concerts were big money losers as well (an L.S.G./Patti LaBelle date reportedly came up $178,000 short), and a KTCL Big Adventure fest had to be moved from the University of Colorado-Boulder campus to Fiddler's Green after a confrontation with the CU administration.
Disasters like these ultimately persuaded Jacor to cut back on its most ambitious plans. Yet the concept survives as Denver's Clear Channel Productions, overseen today by promoter Mike DuCharme, who used to work for NIPP.
Nationally, SFX/Clear Channel Concerts has had several catastrophes as well, most notably the ill-fated "reunion" tour of Diana Ross and the Supremes. But by snapping up concert-promotion companies around the country, it's managed to severely reduce competition and has likewise shut out bidders by purchasing entire tours by acts such as 'N Sync, U2 and the Dave Matthews Band. In almost all of these cases, the fees paid to artists have driven ticket prices up to Pikes Peak heights.
But Boots Hughston, an executive at 2B1 Productions, a San Francisco company that owns Maritime Hall in the Bay Area, asserts that the company saves money on smaller-scale shows simply by throwing its weight around. "Clear Channel will threaten agents when we make offers on shows to the point where sometimes they'll withdraw even after they've signed contracts with us," he says. "I could probably give you eighty or ninety times where this has occurred -- where they'll threaten the band, tell them, 'If you play Maritime, you will not play for any of our venues anywhere else, and you'll lose your airplay.' And they'll end up accepting offers that are a lot less than mine. They'll pass on $30,000 or $50,000 from us and play for them for $10,000 or $15,000. The agents will be apologetic -- like, 'I'm sorry, they blew a shit fit, this isn't going to work.' And we end up losing the show."
Sources disagree about how openly Clear Channel talks about withholding airplay from acts that dare to work with outside promoters or radio stations. Some maintain that warnings are plainly stated and out in the open, with potential clients being told that any misstep will lead to airplay boycotts not just in one city, but everywhere Clear Channel rules. "They're like, 'Catch a cold in Denver and you get the flu everywhere else,'" one says. Adds another, whose groups have suffered a radio ban in Denver for two years following a dispute: "I wound up with the whole fucking system on my ass. Denver is a prime example of what's wrong with deregulation. Everything that could go wrong with it has gone wrong with it in Denver."
An equal number of commentators say that Clear Channel reps haven't been that obvious, because they haven't needed to be. As one source puts it, "They do things under the table, with no specifics, since everybody knows they use their leverage to their benefit. We're talking about 1,200 stations here. Everybody knows if you cross them, you'll get crucified -- so why would they have to tell you that?"
Indeed, whispers and hearsay are often just as effective as the more aggressive approach. Andy Somers, an agent for the Agency Group in Los Angeles, handles the Toadies, a Texas band that made a popular debut LP but then waited over five years to put out a followup. When it came time to book the Toadies tour through Denver, Somers would have normally worked with NIPP, which had promoted all of the Toadies' previous appearances in the city, and did the same for many of his other clients. But Somers had heard about how the game is played in Denver and had people he knew warn that if he gave the gig to NIPP, he could kiss airplay for the Toadies goodbye -- and that he couldn't do. "When you've been gone as long as they had, radio is the key to the record flying," he says. "We had to have it." So Somers called NIPP, apologized, and then gave the show to Clear Channel Productions.
Somers emphasizes that Clear Channel's DuCharme never used airplay as a bargaining chip and has no idea if Clear Channel would have nixed Toadies airplay had he stuck with NIPP. "I just played the odds," he says, "and the odds are on their side. Do I feel Clear Channel has an unfair competitive edge? Absolutely. But I understand what they're doing. If you own the car dealership and you own the car wash, it's good business to sell dirty cars."
Because Clear Channel is so vast, the experiences of those who have dealt with the company differ widely from place to place, market to market. Many insiders have no shortage of horrific tales about Clear Channel promoters in other cities, for instance, but not a single individual contacted for this story leveled analogous accusations at the people at Denver's Clear Channel Concerts division. Typical is a source who says, "Generally speaking, the conduct of Chuck Morris and the people he's got there is fine and ethical, and I've never had any problems dealing with them."
The story could hardly be more different when the subject shifts to the biggest wigs at Clear Channel's radio operation in Denver, with person after person bitching about the decision-makers there -- especially O'Connor and Richards. Radio is also at the heart of the NIPP complaint, for reasons having everything to do with the formats of Clear Channel's Denver FMs. NIPP specializes in rock acts, and Clear Channel has rock radio sewn up: Its portfolio includes the only alternative-rock station (KTCL), the only triple-A station (KBCO) and the only hard-rock station (KBPI). As such, NIPP must either attempt to buy time on a Clear Channel outlet or forgo radio advertising entirely.
Taking the former tack is getting more difficult all the time, NIPP's suit contends. Until recently, stations here and all over the country routinely helped promote concerts with which they weren't otherwise associated through ticket giveaways. Dollars were seldom exchanged, since the arrangement benefited the promoter, who received valuable publicity, and the radio station, which endeared itself to listeners by providing them with much-wanted freebies.
But Clear Channel put an end to this practice for outside promoters. One source outside Denver says the old practice was still in place in February of this year, but mere months later, the same Clear Channel station began charging thousands of dollars for the service. "At first I had no idea what was going on," the source says, "but then I read some articles, and I figured it out."
One such article, in the August 3 Los Angeles Times, included comments from NIPP promoter Morreale, who said that although his company had offered KBPI twenty giveaway tickets to a concert by the band Tool, "we were informed the new policy is that if we, as a non-Clear Channel promoter, want ticket giveaways on the air, we have to buy," as if it were any other advertisement. Morreale added, "We should have access to the same promotional opportunities as any other client, and that includes a client they own."
In reply, KBPI program director Richards was quoted as saying, "All we're doing is bringing concert promoters to the same level as our other sponsors and clients. If you don't spend a certain amount of money, we're not going to give you promotional reciprocity." Richards isn't kidding: House of Blues, Clear Channel's biggest local competitor, has gotten the exact same treatment.
A variation on this topic was addressed in the July 23 issue of Pollstar, a concert-industry trade publication. According to the piece, NIPP bought advertising on KTCL for an upcoming date of the Warped Tour, a punk-oriented festival, but received no on-air mentions by disc jockeys. Worse, NIPP's Morreale said, no tickets provided for giveaway were handed out over the air, with some of them being passed along to KTCL employees.
To that, Clear Channel's Mike O'Connor responded, "Our practice from this point forward is that concert promoters outside of SFX [now Clear Channel] that wish on-air mentions can pay for them." In retaliation, NIPP didn't allow KTCL to set up its van at the concert grounds.
This policy, and the repercussions it caused, incenses and baffles Kevin Lyman, producer of the Warped Tour. "We did a lot of shows on the Warped Tour with Clear Channel stations and SFX promoters, and they did a prime and fair job," he says. "But I thought Mike O'Connor played unfair ball. This is a business where everybody's out to kick everybody else's ass, but there are fair ways to do it, and he basically tried to turn Warped Tour artists against the tour, saying it was our fault they weren't able to be on the site and that they'll never support the Warped Tour again. So now you've got artists who are afraid they're going to be blackballed by Clear Channel, and that's wrong.
"I don't have anything against Clear Channel," Lyman goes on. "But the company grew so quickly, and whenever that happens, you're going to wind up with some bad eggs in the basket."
Another result of the bad blood in the Denver promotion business is an almost total lack of cooperation between the principal warriors. That's seen most vividly when it comes to the use of area venues.
House of Blues excludes competitors from Fiddler's Green, the Paramount Theatre and the Ritchie Center at the University of Denver. In addition, Clear Channel keeps the Fillmore Auditorium to itself and reached an agreement with Stan Kroenke, millionaire owner of the Colorado Avalanche and the Denver Nuggets, to give the company special access to the Pepsi Center.
With Red Rocks, the Denver Coliseum, the Gothic Theatre and innumerable Boulder performance spaces also in the mix, the area presently has an enormous glut of venues -- and more are on the way. Clear Channel has agreed to book shows into Coopers'town, a LoDo rock-and-jock joint named for rocker Alice Cooper, and the company, in conjunction with Kroenke Sports, is also behind City Lights Pavilion, a tented structure slated for construction outside the Pepsi Center, where it's to remain throughout the summer concert season.
"We're starting the approval process with the city and preparing to go to the city council," says Clear Channel's Morris. "If all goes well, we'll be moving ahead shortly -- and I think people are really going to love it."
That turned out to be the case in Boston, where legendary promoter Don Law (now also in the Clear Channel family) built Harborlights Pavilion in 1994. Like the proposed City Lights, Harborlights was placed on a parking lot, albeit one with a considerably better view than its Denver cousin; it sat on land just steps from the Atlantic Ocean on the city's booming waterfront. Jim Jensen, who was general manager of Harborlights, says there initially was skepticism from locals about seeing a concert under a tent, even if that tent cost $2.5 million, and notes that during the first year, when the lineup consisted mainly of old-timers such as Steve Lawrence and Eydie Gorme, "we bled red ink like you wouldn't believe." But after broadening the talent array to include the likes of Shawn Colvin, Harborlights took off -- so much so that Law decided to buy land and construct a more permanent venue (the tent was taken down each fall and put up again the following spring, as it will be with City Lights). Today, FleetBoston Pavilion, a few blocks from Harborlights' previous perch in an equally picturesque spot, hosts shows ranging from Bad Company to Jo Dee Messina, and, says Jensen, "it's really become a Boston landmark."
Regardless of the apparent proliferation of local venues in Denver, however, Morris is sure the pavilion will fill a need on the local scene. "To do a traditional show with somebody like Tony Bennett at Fiddler's Green, with 18,000 seats, is ridiculous, but so is doing two shows in a smaller room, like the Paramount -- and if you do a half house at Red Rocks, you lose a fortune and the acts aren't happy, because it seems like no one's there. So I think this will be perfect for a lot of acts, from soft rock to MOR to jazz to R&B to classical. We're in serious negotiations with the Colorado Symphony to do a pop series there."
The company most directly affected by City Lights and Coopers'town may be NIPP, which does almost all of its business downtown and already must contend with the nearby Fillmore Auditorium. Jerry Bakal of Concerts East, an independent promotion company in New Jersey, faces a similar dilemma. Like NIPP, Bakal says he regularly loses bookings because "the bands are afraid to piss off the radio stations" and because his performance space is surrounded by Clear Channel-owned venues. But he's survived, and he sees a few cracks in Clear Channel's armor that make him at least moderately optimistic about the future.
"They've become a concession company," he says. "They're paying so much for bands that they're making all their money on $10 burritos and $6 glasses of beer, and they're losing focus on concert promotion. And since business this season is already off 30 or 40 percent, that's only making it worse. That's why I think that if they keep losing money, they'll sell the promotions part. It's a publicly traded company, and the bottom line is what counts, so they'll downsize, or slice and dice, or put everyone into one office, or do whatever the accountants want them to do.
"So I think it's a good idea for us independents to stick around."
Doug Kauffman and Jesse Morreale are convinced their lawsuit gives them the best opportunity to survive for the long haul. But both recognize that the new millennium doesn't have much in common with its predecessor.
"When this company started in 1987, things were radically different than they are today," Kauffman says. "The first show I ever did was John Cale, and even though no one knew who I was, I got KTCL to present the show, and they added him to the playlist. Can you believe that? They added John Cale! That was free-form radio."
At Clear Channel these days, nothing's free. Given the huge fees bands command, the concert tickets the company sells are more expensive than ever, and its radio stations command premium advertising rates. Too bad the outlets consistently sound lousy. A huge amount of programming is either syndicated or voicetracked, and other sharing of resources between signals undercuts variety, originality and, oftentimes, station personality. Reggie McDaniel has turned up doing movie reviews on KOA, which has Clear Channel Denver's oldest listeners, and KTCL, which boasts its youngest. Likewise, a visiting stand-up comic will sometimes appear on four different Clear Channel stations over the span of an hour or two, as might the same staff of reporters. And that's not to mention increasingly narrow playlists larded with ever more predictable material. No wonder so many people grouse about the quality of what's on the dial.
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.
"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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