ClayManiacs

Billboard
August 09, 2003
RAC Tapped To Talk To DOJ
BY BILL HOLLAND
WASHINGTON, D.C. -

The Department of Justice investigation into Clear Channel is moving forward.

Billboard has learned that the DOJ has requested an interview with an official from the Recording Artists' Coalition. The DOJ wants to discuss allegations of artist intimidation on the part of Clear Channel Communications, the giant radio and venue owner under fire for its business practices.

DOJ does not comment to the press regarding ongoing investigations, but R. Hewitt Pate, the DOJ's assistant attorney general for antitrust, revealed July 24 to the House Judiciary Committee's antitrust task force that DOJ attorneys have conducted "a number of interviews" as part of the probe into Clear Channel and have "undertaken significant efforts to find additional evidence."

Rep. Howard Berman, D-Calif., ranking member of the House Subcommittee on Courts, the Internet and Intellectual Property, has been frustrated by the DOJ's lack of follow-up on complaints about CCC. He pressed Pate on the issue at the antitrust task force hearing.

Berman sent a letter to the DOJ in January 2002 detailing the allegations against CCC. He tells Billboard, "DOJ has not adequately kept me in the loop on this issue.

" Since my letter, many have postulated that the Bush administration would not allow the DOJ to actively pursue antitrust investigations."

Clear Channel, which is headquartered in President George W. Bush's home state of Texas, is a major Republican campaign contributor.

Citing the DOJ's decision last year to go after Pressplay and MusicNet "in the as-yet infinitesimally small market for legal online music," Berman said, "The Bush DOJ is interested in publicly pursuing a lengthy investigation of rather speculative antitrust concerns. If it has such grave antitrust concerns, why isn't it willing to pursue allegations of actual anticompetitive behavior in the radio and concert industries?"

Clear Channel has been under scrutiny by federal lawmakers since 2002. Recording artists, rival radio stations and venue owners complain of alleged bullying tactics in which Clear Channel forces artists to do interviews and promotions on its radio stations or play its concert venues.

Berman says Clear Channel representatives have "assured me that Clear Channel does not engage in illegal activity and is simply a business facing criticism from competitors who can no longer compete against it. I told them that I would continue to press the DOJ to get to the bottom of the story."

So, I did a little Civics 101 research on this House Sub-Committee and here is the membership and States represented by the members. I did not research their political affiliations; in fact, when you go to the USGovernment:House of Representative Website, you cannot FIND their political affiliations listed, which is as it should be.

COMMITTEE ON THE JUDICIARY
Subcommittee on Courts, the Internet, and Intellectual Property

Mr. Lamar Smith, Texas, Chairman

B-351A Rayburn HOB, Tel: 202-225-5741

Mr. Henry Hyde -Illinois
Mr. Howard Berman -California
Mr. Elton Gallegly -California
Mr. John Conyers -Michigan
Mr. Bob Goodlatte -Virginia
Mr. Rick Boucher -Virginia
Mr. William Jenkins -Tennessee
Ms. Zoe Lofgren -California
Mr. Spencer Bachus -Alabama
Ms. Maxine Waters -California
Mr. Mark Green -Wisconsin
Mr. Martin Meehan -Massachusetts
Mr. Ric Keller -Florida
Mr. William Delahunt -Massachusetts
Ms. Melissa Hart -Pennsylvania
Mr. Robert Wexler -Florida
Mr. Mike Pence -Indiana
Ms. Tammy Baldwin -Wisconsin
Mr. J. Randy Forbes -Virginia
Mr. Anthony Weiner - New York, Brooklyn
Mr. John Carter -Texas

CLEAR CHANNEL GOES TO TRIAL
Rolling Stone
Steve Knopper
April 20, 2004

Concert and radio giant charged with crushing competition

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 frell 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."

By Sue Zeidler

LOS ANGELES (Reuters) - Clear Channel Communications Inc. is under fire from smaller rivals worried that it will shut them out of the quickly growing business of offering live-concert CDs immediately after shows.

San Antonio, Texas-based Clear Channel claims a key patent for the technology to offer such recordings, but competitors challenge whether that gives the company exclusive rights to create and sell instant recordings of live performances.

The competing claims comes as Clear Channel, which is the No. 1 U.S. radio station owner, faces a trial in August over allegations that it abused its radio market clout to benefit its concert business.

The most recent friction began in April when Clear Channel announced that it had bought a key patent for producing live CD recordings within 5 minutes after concerts.

But smaller companies, like Santa Monica, California-based Kufala Recordings, which also records live concerts, claim the patent is a veiled effort to muscle them out of a previously negotiable market.

"If you try to provide similar services ... they're going to sue you for patent infringement or to license their patent," said Kufala president Brady Lahr. "Clear Channel is really using their monopoly in the market to powerfully restrain trade above and beyond the patent issue."

Brian Becker, chief executive of Clear Channel's live entertainment unit, responded on Friday by saying the company had invested substantial resources over the past two years in its Instant Live recording service.

"We want this service to be in widespread use and welcome all legitimate and serious conversations with those interested in licensing our patent. We will not, however, conduct licensing conversations in public or via the media," he said.

Instant Live has already recorded concerts by the Allman Brothers, and Clear Channel expects to enter into deals with more than 40 acts to produce live recordings this season.

But Richardson, Texas-based Immediatek Inc., the parent of DiscLive Inc, which also records live concert CDs, said Clear Channel's patent did not give it exclusive rights to the business of creating recordings of live performances.

"Our attorneys have provided Clear Channel's attorneys with this information and more to detail why their patent is not relevant to the DiscLive system and requested that they provide us with specific details if they disagree," said Zach Bair, chief executive of Immediatek in a statement this week.

Immediatek said it plans to continue rolling out its DiscLive product shortly after live shows.

Music attorneys said approval is always required by multiple parties, including the artist, record label, music publisher, and venue owner before a live concert CD can be recorded.

But Lahr said Clear Channel's market concentration was changing the playing field. "From our past experiences, every venue has been open and willing to negotiate their venue fees except for Clear Channel," said Lahr.

"Now virtually all performing artists like the Pixies, Billy Idol (news), and even Bruce Springsteen (news) run the risk that if they record their own shows at any venue in the country, then sell the CDs that same night, Clear Channel can and will go after the artists and make them pay," said Lahr.

Clear Channel Entertainment currently owns, operates or exclusively books about 130 concert venues, including nearly 100 in North America.

Last month, a federal judge in Denver ruled there was evidence Clear Channel had abused its clout by threatening to keep artists off the air unless they performed at its shows and ordered Clear Channel to stand trial in August.

The ruling came in a lawsuit filed in August 2001 by small Denver concert promoter Nobody in Particular Presents. The lawsuit accuses Clear Channel of violating antitrust laws.  

Last month, a federal judge in Denver ruled there was evidence Clear Channel had abused its clout by threatening to keep artists off the air unless they performed at its shows and ordered Clear Channel to stand trial in August.

This news was posted by Clandy over at the Clay Board:

As of june 1st Solitaire was added to the playlist at WLTW in New York.

This is huge huge HUGE! This is the #1 station in the country and Clear Channel at that.

This station does not stream, but hopefully this will help Clay move up on Billboard's AC chart, where I believe he is number 27. It would be great if he could crack the top 20 right before he goes on tour. So again, keep requesting in your area, and if you are in New York where this station is - Congrats!
I'm just encouraged that this is a Clearchannel station.

Keep requesting to Clay-friendly stations

June 02, 2004, 3:45 PM ET
By Ray Waddell, Nashville

In a development some will see as a clear victory for independent concert promoters, Nobody In Particular Presents (NIPP) has settled its lawsuit against Clear Channel Communications and several of its subsidiaries.

The terms of the agreement are confidential, and representatives from either company could not be immediately reached.

The news comes after a federal judge in Denver on April 2 allowed NIPP to proceed with its suit against CCC, finding that the latter had attempted to create a monopoly. A trial had been set to begin Aug. 2.

NIPP originally filed the suit in August 2001, charging that Clear Channel's "monopolistic, multimedia empire" was "severely harming NIPP's ability to compete ... resulting in higher prices and fewer offerings for consumers."

NIPP alleged that CCC-owned Denver radio stations played songs by artists whose area concerts were promoted by Clear Channel Entertainment, but did not play songs by bands that NIPP promoted.

In the April 2 ruling, Judge Edward Nottingham of the U.S. District Court for the District of Colorado ruled that CCC's cluster of eight radio stations in the Denver area -- the maximum allowed by FCC regulations -- was not a monopoly. However, the judge also stated he believed CCC had intended to create a monopoly position when it rejected paid advertising by NIPP.

"This was a long and difficult battle, and we are very happy with this agreement," says Doug Kauffman, founder and president of NIPP, in a statement. "We look forward to continuing to be the leading independent concert promoter in the Denver area."

Andy Levin, Clear Channel's executive VP/chief legal officer, comments in a statement, "Clear Channel admitted no wrongdoing in connection with the lawsuit, but we are pleased to get the matter behind us."

The case has been followed with much interest by the concert industry at large. "I'd love to know the terms, but this potentially indicates Clear Channel had some particular reason to settle," observes independent promoter Jon Stoll, president of Fantasma Productions. "This is great news for the independents."

Music Notes
MELISSA RUGGIERI
MUSIC CRITIC Jul 1, 2004

Clear Channel's latest money-making venture, "Instant Live," has scooped up Jewel, KISS,
Peter Frampton and the Cowboy Junkies on their current tours. The "Instant Live"
program allows concertgoers to buy a live CD of the show they just saw immediately afterward.
Look for the discs at an amphitheater near you this summer . . .

Madness to the Method Man: Lost in this charming PR hype was a simple fact -- Clear Channel’s fastest growth is behind it. When they were early in the process of consolidating and homogenizing U.S. radio, they a huge growth curve ahead of them. At an earlier point in their growth cycle, Clear Channel was able to wring out massive cost savings as they consolidated their network. That phase is now over.

This efficiency, cost cutting, and uniformity came at a cost: Clear Channel wracked up big margins with their streamlined McMusic programming, but they ended up driving away listeners, also. Consider the state of radio before Clear Channel was given the greenlight by Congress to consolidate: There were many hundreds of local radio stations -- which required 100's of station managers, 100's of musical programmers, and many 100's of DJs.

Across the U.S., you could hear music with a more local flavor. In cities, as you scrolled across the radio dial, you could hear a broad variety of songs, bands and musical genres. Even the same radio format -- classic rock, alternative, pop, etc. -- there were diverse playlists within each genre.It may not have been "personalized" just for you, but the diversity of musical sources meant that there was likely something on the dial you wanted to listen to.

No matter how obscure your musical tastes were, odds favored that there was at least one station worthy of being put into your car radio's presets. Clear Channel replaced most of this unique programming with a handful of their own "talent." Depending upon the format the mega-station decided upon, they could simply plug in an existing show from their roster. Local music sources were local no more.

While this approach made them more efficient short term, it also fundamentally changed the relationship between listeners and their radio. These far away programmers -- and their greatly reduced playlists -- ultimately equaled less fans. Clearchannel didn't only hurt radio -- they drew first blood from the recording industry also. Music fans only buy what they hear; Less music on the radio meant decreasing purchases of CDs.

I'm convinced that the ever shrinking national radio playlist caused by radio consolidation is one of the key factors in the declining CD sales nationwide.

Music fans only buy what they hear; Less music on the radio meant decreasing purchases of CDs. I'm convinced that the ever shrinking national radio playlist caused by radio consolidation is one of the key factors in the declining CD sales nationwide.

By Geoff Gehman
Of The Morning Call

The directors of the Lehigh Valley's three biggest concert facilities are standing on the floor of Lehigh University's Stabler Arena, discussing the Bermuda Triangle.

It's their pet term for the 90-mile radius where popular acts they seek disappear into venues that are newer, bigger and more attractive. For a dozen years, they say, hot entertainers have vanished into a dozen concert facilities from metropolitan Philadelphia to a ski resort near Scranton.

Because of the competition, Bonnie Brosious, director of marketing for the Allentown Fair, says she's facing the second summer in three years she hasn't presented a concert before or after the fair in the 48-year-old, 10,440-seat grandstand. Ten years ago the grandstand presented up to six shows in addition to fair dates.

Richard Fritz, director of 6,500-seat Stabler Arena, has watched the number of popular-music shows at his 24-year-old facility fall nearly 50 percent since 1993. In 1986 Stabler presented a record 23 concerts; last year it presented three.

Last year Robin Zaremski, director of performing arts for Musikfest, booked every major act she wanted for the festival's largest stage, the four-year-old, 6,500-seat RiverPlace. This year she says she was outbid on 10 headliners, including John Mayer, Hoobastank and Carole King.

The local presenters say they've always lost chart-topping performers to larger buildings in the larger markets of Philadelphia and Pittsburgh. Now they're losing a greater number of major acts to larger venues in the smaller markets of Reading and Hershey.

Their Bermuda triangle has turned more treacherous, they say, because of stiffer competition from Clear Channel Entertainment, the world's No. 1 promoter and producer of live entertainment.

Launched in 2000, Clear Channel Entertainment books concerts at all 12 of the new venues that have opened since 1992 within 90 miles of the Valley. Clear Channel is the exclusive booker for four key facilities, including the 7,400-seat Star Pavilion in Hershey and the 17,000-seat Ford Pavilion at Montage Mountain near Scranton.

Supported by the promotional power of its parent company, Clear Channel Communications, the world's No. 1 owner of radio stations and outdoor advertising displays, Clear Channel Entertainment beats Valley venues to major acts by offering more money, more dates and more exposure.

In addition, Clear Channel blocks Valley presenters with a 90-mile radius clause in its performer contracts. Acts signed by Clear Channel agree not to play a rival facility — within 90 miles — at least 60 days before or 30 days after a Clear Channel show.

Despite the size and age disadvantages of their facilities, Valley bookers are striking back by challenging Clear Channel in creative ways. This year they worked with more of Clear Channel's main promotion/production rivals, and more acts overlooked or ignored by Clear Channel. As a result, they were able to book country star Kenny Chesney, ''American Idol'' idol Clay Aiken and other touring favorites.

Clear Channel officials declined to discuss Clear Channel's impact on concert promotion in the Valley. So did representatives for acts booked at Musikfest, which began Friday and ends Aug. 15, and the Allentown Fair, which runs Aug. 31-Sept. 6.

Local presenters agree that Clear Channel has made a tough market tougher.

''We were already falling when Clear Channel gave us a shove,'' Fritz says. ''They didn't invent this problem; they just bought and bundled it bigger than anyone.''

Stabler suffers

For Fritz, the bundling is uncomfortably tight. It's particularly painful because Stabler Arena's first dozen years were so successful.

From 1980 to 1992 the Lehigh University building attracted independent promoters, including Makoul Productions in Allentown, with its intimacy, flexibility and proximity. A host of popular acts began tours, ended tours or played off-days in Stabler, a 6,500-seat arena within 90 miles of major venues in Philadelphia, Manhattan and New Jersey's Meadowlands.

Stabler presented 1985 and 1988 concerts by ex-Police leader Sting, then a fairly new solo act. James Taylor, an international favorite since the early '70s, played the Lehigh venue six times. Whitney Houston shot a video there. She, Bette Midler, Phish and 20 other acts rehearsed tours there.

In 1988 Stabler received Performance magazine's award as the top arena with a seating capacity of 5,000 to 7,000; it was one of the building's eight nominations.

In 1992 the venue entered into an exclusive contract to present shows with Electric Factory Concerts, the powerful Philadelphia promoter. Over the next five years Rod Stewart, Nirvana and other major performers came to Bethlehem courtesy of Electric Factory, which is now the Philadelphia division of Clear Channel Entertainment.

Fritz first noticed a significant decline in the number of Stabler concerts in 1996, the year the 16,000-seat Bryce Jordan Center opened on the main campus of Penn State University in State College. The next year he began losing acts to another academic arena: the Liacouras Center, a 10,400-seater at Temple University in Philadelphia.

Over 12 years Fritz has competed with the 12 facilities built or expanded within 90 miles of Stabler. Eleven are larger than his venue; their seating capacities could fill nearly 27 Stablers.

According to Fritz, Stabler has suffered from a lack of seats, the absence of a contract with a major independent promoter and the perception that the arena is not new enough. In its first 12 yearsthe building played host to 181 concerts. Over the past 11 years, it has held 96.

''Once upon a time it was a blessing being the lone ranger between Philadelphia, Manhattan and New Jersey,'' says Fritz. ''Acts would walk in here, do a show, and walk out making money. We had our little niche. Now our little niche has been poked and poked and poked.''

How the fair fares

Bonnie Brosious has felt her niche at the 10,440- to-14,500-capacity Allentown Fair Grandstand poked hard in the past three years. She says she began losing part of her Berks County market in 2001, when the 10,000-seat Sovereign Performing Arts Center — a venue booked by Clear Channel and other promoters — opened in Reading. Two years later she began losing listeners from metropolitan Harrisburg to the new Giant Center, a 10,000-seater in Hershey booked exclusively by Clear Channel.

Brosious says population growth in Northampton County has made up part of the loss. The fair is especially popular, she says, with ex-New Yorkers living in Bethlehem Township.

In the 1990s Brosious partnered with Electric Factory Concerts. One year Electric Factory had an exclusive contract to promote shows at the fair grandstand, but didn't book a single date. Brosious says Electric Factory concentrated that year on the larger Hersheypark Stadium.

According to Brosious, Clear Channel really began competing with the fair after a 2001 Styx/REO Speedwagon concert sold nearly 8,000 tickets at the Allentown grandstand. Prompted by a national boom in popularity for double and triple bills of acts first popular in the '70s, Clear Channel started booking more classic rockers at its 10,000-seat-plus venues in the region, including the Wachovia Arena in Wilkes-Barre and the Tweeter Center in Camden, N.J. Consequently, the fair has lost classic rockers to bigger, better-paying dates.

In 2002 Brosious tried to work with her rival in a deal that turned troublesome. She booked a fair date on the Alicia Keys national tour promoted and produced by Clear Channel. Keys' agent agreed with Brosious' prediction that the R&B/neo-soul singer-songwriter could attract a significant new audience at the fair and that she could sell at least 5,000 more tickets than the 2,000 to 3,000 she was selling in smaller concert halls.

After Keys won five Grammy awards that year, the Philadelphia division of Clear Channel tried to cancel the Allentown Fair concert, which Brosious had scheduled through Clear Channel's national office.

Clear Channel Philadelphia, Brosious says, contended the Allentown date would steal fans from Keys' performances at three Clear Channel venues in the region.

The fair ultimately kept the Keys concert, which drew 5,500 fans, because a senior official at her Keys' booking agency insisted on presenting a show that had already been advertised.

The same year Brosious was able to capitalize on a Clear Channel failure by knowing her market inside and out.

She decided not to book a double bill of Sammy Hagar and David Lee Roth, former lead singers for Van Halen, because ticket sales for their Clear Channel tour were terrible. She filled the ''Sam & Dave'' slot with Meatloaf, who has a bigger local following. And, important for Brosious, his fee was much lower.

Brosious' plan paid off. The Meatloaf show grossed $100,000, Brosious' biggest success as the fair's chief entertainment booker. To Clear Channel that summer, Meatloaf was a leftover. To Brosious, he was prime rib.

This summer Brosious decided not to compete directly with Clear Channel for major acts. She says she's tired of being outbid for the likes of country singer Toby Keith, who sold out a concert at the 2002 Allentown Fair and who this month is booked at four Clear Channel facilities within 90 miles of the Valley. She's tired of being treated like a second-class citizen by Clear Channel — unless she has an act Clear Channel clearly wants.

Clear Channel ''doesn't like us because we're strategically located and we're taking away their market,'' says Brosious. ''We're the third-largest market in Pennsylvania, and we can attract people in New Jersey. So my feeling this year is: Why bother?''

Collaborating and competing

Musikfest also has been a Clear Channel partner.

In 2002 Clear Channel booked the acts at Musikfest's RiverPlace. According to Jeff Parks, Musikfest president, the organization needed a major agency to book major acts during the transition between performing-arts directors.

That summer Clear Channel programmed a typically diverse Musikfest bill. RiverPlace had classic rockers (Blue Oyster Cult/The Guess Who), an adult-contemporary hero (Michael Bolton), a reggae star (Shaggy). Two shows — Kansas/Little River Band and Live — sold out. The other seven popular-music acts averaged 3,500 spectators.

Unimpressed by the mediocre turnout, Musikfest declined to rehire Clear Channel for 2003. ''When we used them it was pretty much the same as when we didn't use them,'' says Parks. ''We got the acts we probably would have gotten without their assistance.''

Parks was happier with the 2003 returns. Booked by Zaremski for the first time, RiverPlace grossed a record $1.3 million.

Zaremski helped herself by partnering with the New York State Fair. Offering back-to-back dates with that fair enabled her to attract Earth, Wind & Fire (a near-sellout) and Martina McBride (a sellout).

This year, says Zaremski, Clear Channel became a bigger rival for Musikfest. She attributes the stiffer competition to Clear Channel's first full summer booking two key venues: the Star Pavilion, a 7,400-seat amphitheater in Hershey, and the 17,000-seat Ford Pavilion at Montage.

Last year Zaremski lost no major acts to Clear Channel. This year Clear Channel outbid her on 10 significant musicians. The list includes performers young (Hilary Duff) and old (Michael McDonald), headliners (Nickelback) and secondary acts (Godsmack, which is opening this summer for Metallica).

One of Zaremski's most painful losses was Bryan Adams. She thought he would be ideal for the Valley, a market keen on Adams' brand of classic rock (''Summer of '69'') and adult contemporary (''Everything I Do''). She expected he would sell at least 4,500 seats at RiverPlace.

Instead, Adams' representatives chose to play Clear Channel venues in Hershey and Scranton. Zaremski estimates Clear Channel is paying the musician more than $25,000 over her $100,000 guarantee. She could only offer him one date; Clear Channel offered him three concerts on three days within 90 miles.

Zaremski could have advertised an Adams show on WZZO-FM and WAEB-FM, two of Clear Channel's three radio stations in the Valley. She couldn't have offered him the promotional power of Clear Channel's parent company, which owns 1,200-plus radio stations (18 within 90 miles of the Valley) and 770,000-plus outdoor displays.

Zaremski did score a coup with Clay Aiken, one of the most popular finalists on ''American Idol.'' When she bid for him this winter, she says, Clear Channel didn't think he could sell out a facility as big as RiverPlace. She had three reasons for thinking otherwise.

One, Aiken at the time had a hit single, ''Invisible.'' Two, millions of viewers were tuning into new ''American Idol'' contestants. And, three, Aiken's older female fans are more comfortable seeing the down-home North Carolinian at a festival rather than an amphitheater. The former, says Zaremski, is friendly and festive; the latter, anonymous and antiseptic.

Zaremski hit the bull's-eye. Aiken's Musikfest concert sold out. ''You need creativity when you're dealing with Clear Channel,'' says Zaremski. ''Because you certainly can't outbid them.''

Changing the challenge

This year the Valley presenters are filling the popular-music void in more creative ways. Fritz, for example, has booked for Stabler more family shows, conventions and non-Lehigh athletic events, such as a cheerleading competition.

His latest spike in income has come from concerts with Christian contemporary musicians. In February he rented Stabler for a sold-out show with the Newsboys. Third Day and Toby Mack are scheduled to play the arena in October. Fritz also is searching for a spot for Steven Curtis Chapman.

''The competition has definitely made the chase harder,'' says Fritz. ''Let's just say that the line on my fishing pole is always in the water.''

Zaremski decided not to match and raise Clear Channel's offers to acts. Instead, she cut the average fee for RiverPlace headliners from $125,000 to $65,000. Lower prices for the likes of Huey Lewis & the News, in turn, allowed her to keep the majority of tickets under $30, which she hopes will increase attendance and profit. By comparison, Clear Channel is selling the majority of reserved tickets to Bryan Adams concerts in northeastern Pennsylvania for more than $35.

Brosious took the opposite direction. To remain more competitive, she raised her average fee per act from $155,000 to $170,000, her top price from $210,000 to $250,000.

As Zaremski did last summer, Brosious offered maximum exposure in the Northeast by booking back-to-back dates with the New York State Fair. These factors, coupled with a good relationship with a manager and an agent, helped her land a Sept. 1 date with Kenny Chesney. In Pollstar magazine's mid-year analysis of North American tours, Chesney finished third in ticket sales, behind Prince and Britney Spears.

To raise money and goodwill, Zaremski introduced what Brosious has offered for years: a back-end bonus. If a RiverPlace show sells out, Zaremski will calculate Musikfest's expenses (catering, security, etc.), then give the act 85 percent of the remaining profit. It's a standard split designed to reward both sides. Zaremski hopes the incentive will make Musikfest more attractive to more attractive performers.

Zaremski and Brosious are also staying out of Clear Channel's way. This year both bookers picked more acts near the edge, or off, Clear Channel's radar. On Monday night at RiverPlace, the rapper Chingy will perform his only Northeastern concert this summer. Kid Rock, who will perform Sept. 4 at the Allentown Fair, is booked at seven Clear Channel venues this summer; the closest one is in Maine.

Brosious and Zaremski also are working with Clear Channel's chief competitors. Chesney's and Aiken's tours are produced by TMG/AEG Live, which is led by veteran independent promoter Louis Messina, who joined the company after leaving Clear Channel.

Despite their Clear Channel losses, Brosious and Zaremski are pleased with their headliners. Brosious reports the fair grandstand has sold 7,000 more tickets than at this time last year. According to Zaremski, lackluster sales for several acts are balanced by an Aiken sellout, a near-sellout for Crosby, Stills & Nash and a healthy 4,200-plus tickets sold for a Lonestar/Sara Evans bill.

Between the two of them, Zaremski and Brosious have booked a fairly strong sample of money makers. Of the 16 headliners at Musikfest and the Allentown Fair, seven finished in Pollstar's list of top 100 grossing tours over the first six months of 2004. Chesney, who sold out his Allentown date, leads the Lehigh Valley brigade at No. 7; Kid Rock charted at No. 17.

Zaremski and Brosious say they respect the power of Clear Channel, which consists largely of former independent promoters who have ruled major markets for decades. They also thank the giant one-stop shop for making them smarter shoppers.

''I refuse to stomp my feet,'' says Brosious. ''Yeah, I'm not always going to get the tour that the whole country is talking about. But as long as my act sells tickets to the fair, what does it matter? It's all about putting people in the seats. Besides, our main drive isn't concerts; it's agricultural exhibits and education. Our main drive is connecting kids to cows.''

Building walls rather than buildings

Despite what might seem an obvious solution, the Valley's concert entrepreneurs are not likely to turn to bricks-and-mortar improvements to compete with Clear Channel.

The owners of Stabler Arena and the Allentown Fair have no plans to expand seating capacities. A feasibility study persuaded Musikfest officials not to replace the congested, shoehorned RiverPlace with a new 10,000- to 20,000-seat amphitheater.

''The leadership of the Valley has not stood up and said we need an arena of this kind,'' says Parks. ''We came to the conclusion that we're not going to go down that road.''

Two of the three local presenters say they are still willing to work with Clear Channel. Fritz would welcome a return engagement by the former Electric Factory Concerts, which ended an exclusive promotional contract in 1997. Clear Channel, he says, would help him bring back some of Stabler's former glory as a medium-size hub, as ''the glove that fit the hand that wanted to be here.''

Brosious is willing to let Clear Channel book acts in the Allentown Fair grandstand before and after the fair. She wouldn't mind if the promoter decided to help renovate the grandstand; after all, she says, Clear Channel built an amphitheater on the grounds of the Florida State Fair. She would mind if she didn't have the upper hand in concessions. At the Montage venue, for example, Clear Channel gets 92.5 percent of the sale of beer, parking and other items.

Musikfest's Parks is the one holdout. Partnering again with Clear Channel, he says, would be ''a duplication of resources.'' He is willing, however, to piggyback with Clear Channel acts outside the 90-mile radius.

The local directors plan to continue promoting their venues as sound alternatives to newer, larger, more attractive facilities inside the Bermuda triangle.

Because their organizations are smaller and more flexible than Clear Channel, they say they can offer acts a better fit between listener and radio station, advertiser and sponsor. Their pitch is that they can offer fans cheaper food, parking and tickets to seats that aren't miles from the stage and hours from their home. They can offer more than a concert; they can offer an experience.

''It's become such a corporate grind for these bands,'' says Zaremski. ''They aren't enjoying performing at all these amphitheaters that are pretty much identical. They're looking forward to the last days of the tour so they can get off the treadmill. We actually can take an act and say: Where can we take this band? How can we reach these people? We can offer them a dedicated demographic, a comfortable feel, something that's financially and emotionally rewarding.''

Zaremski did score a coup with Clay Aiken, one of the most popular finalists on ''American Idol.'' When she bid for him this winter, she says, Clear Channel didn't think he could sell out a facility as big as RiverPlace. She had three reasons for thinking otherwise.

3 — Number of the 16 featured headliners at Musikfest and the Allentown Fair not listed on the 2004 touring artist page of Clear Channel's Web site. Musikfest acts Clay Aiken, Creedence Clearwater Revisited and Radio Disney AM640 Showcase are the only Clear Channel holdouts.

are the only Clear Channel hold outs

Rolling Stone magazine rips Clear Channel
Web Posted: 08/12/2004 12:00 AM CDT

L.A. Lorek
Express-News Business Writer

The latest issue of Rolling Stone magazine, which hits newsstands Friday, features an article blasting San Antonio-based Clear Channel Communication's radio and live concert business.

The article calls Clear Channel "a music company on steroids" and reports "that Clear Channel uses its size to crush the competition while force-feeding audiences the same playlists no matter where they live."

The article quotes Dixie Chicks manager Simon Renshaw saying, "They don't care about music. They care about ad rates."

But Clear Channel spokeswoman Lisa Dollinger said the article contains more than 30 instances of errors or omissions.

"We're giving Rolling Stone the opportunity to recant the article," Dollinger said.

Rolling Stone publicist Andy Shearer had no comment on Clear Channel's allegations Wednesday.

In particular, Clear Channel objects to the article's statement that the company controls about 70 percent of all live events promoted in the United States. That's false, Dollinger said.

The headline says Clear Channel's "domination of the radio and concert industries has made the airwaves blander and tickets more expensive."

Clear Channel contends it doesn't dominate the radio industry, because it owns just 9 percent of the radio stations in the United States, Dollinger said.

The article reports that the company "resides in a green-glassed sprawling office complex in San Antonio." Clear Channel's headquarters are in a limestone building at 200 E. Basse Road that is quite small, Dollinger said.

It also reports that Lowry Mays "refused to be interviewed for this article," but it doesn't point out that Mays has been recovering from a brain clot and emergency brain surgery since May.

Mays is in rehabilitation now. His son, Mark Mays, is Clear Channel's acting chief executive officer.

Clear Channel’s Practices Show What’s Wrong with Media Monopolies

Jan. 30—The practices of Clear Channel, the nation’s largest radio station owner, illustrate what is wrong with federal media ownership policies that make it easier for companies to establish media monopolies, according to a Cornell University study for the AFL-CIO. In six years, Clear Channel has grown from owning 44 stations to 1,239 stations today, and the corporation now generates 20 percent of all radio industry revenues. Clear Channel also owns 44 amphitheaters, 51 theaters and various clubs and arenas. According to the report, The Clear Picture on Clear Channel, Clear Channel uses several cost-cutting measures that lead to homogenized news and entertainment—and in some cases, even endanger public safety.

“Clear Channel is the poster child for what’s wrong with media consolidation and the Federal Communications Commission’s (FCC) continued deregulation of this industry,” says Paul Almeida, president of the AFL-CIO Professional Employees.

"Although Clear Channel long has been the whipping boy for concert fans and independently minded artists who have accused it of everything from bullying to monopolistic practices to price-gouging...."

"Earlier this year, Jam was awarded $90 million in damages after it won a federal lawsuit charging that Clear Channel had engaged in unfair practices"

June 6, 2005
The Trick of Making a Hot Ticket Pay
By ROBERT LEVINE
The New York Times

Norah Jones fans who wanted to see the singer perform live last summer had little trouble finding tickets. Although she was touring to promote the platinum-selling album "Feels Like Home," Ms. Jones sold an average of only two-thirds of the tickets available for each show, according to Pollstar, which tracks the pop concert business.

She was not the only artist staring out at empty seats. For Incubus, a rock band that had done well in 2003, "sales were brutal," according to Randy Phillips, chief executive of AEG Live, the promoter that booked most of the dates. Even Simon and Garfunkel, whose reunion was the sixth-highest-selling tour in 2003, took in about half as much money a show last year. "Last summer," Mr. Phillips said, "was a disaster."

Nobody felt the trouble more keenly than Clear Channel Communications, the radio conglomerate that became the country's largest live music company in 2000, when it bought the concert promoter SFX Entertainment for $4.5 billion. Clear Channel, which controls many of the nation's big live-music venues, including the amphitheater at Jones Beach on Long Island and the Shoreline Theater near San Francisco, had hoped to exploit synergies between radio and concerts through advertising and tour sponsorships.

Those extra advantages never materialized. But in an effort to control a larger part of the concert business, Clear Channel aggressively raised advance payments to artists, which sometimes pushed acts into inappropriately large houses and drove up ticket prices for an already fickle audience.

"Clear Channel acted like it had to dominate the marketplace and in order to buy everything, it had to pay," said Alex Hodges, executive vice president of House of Blues Concerts, the promotion division of House of Blues Entertainment, a competitor to Clear Channel in the live-music business.

Since then, the company has changed course. A few weeks ago, it announced that it would spin off the Clear Channel Music Group as a separate company, apparently giving up its vision of synergy but also removing some of the pressure to increase its market share at any cost.

Michael Rapino, who last August was promoted from head of the company's European division to run the entire live-music business, is trying to impose discipline on artist guarantees and to make amphitheater concerts, a significant part of the company's business, more appealing. "I think the industry in general used last year as a wake-up call," said Mr. Rapino. "We have to be more aggressive when it comes to motivating the casual consumer."

Last week, Clear Channel Music announced some steps aimed at getting more people into the cheap seats. For certain shows at 33 of the amphitheaters it controls, lawn tickets will cost $20, about half to two-thirds of the prices in the past. For other shows it is introducing a $39 "grass pass" that includes parking and a $10 food and beverage voucher. It has also struck some vending deals with upscale food suppliers including Au Bon Pain, Ben & Jerry's and even Legal Sea Foods. "Our economic driver has always been our event revenue," Mr. Rapino said, referring to concessions and other so-called ancillaries.

It is not clear whether price reductions will increase demand for tickets. Marquee acts like the Rolling Stones and Paul McCartney, both touring this summer, have no problem commanding several hundred dollars for some seats. Even smaller bands sell the best and most expensive seats first, sometimes leaving part of a house empty.

Mr. Phillips of AEG Live, a Clear Channel competitor, is skeptical. "The bet," he said, "is that lower lawn prices and Cherry Garcia cones will make a difference to get people to see an act they might not have seen anyway."

Mr. Rapino is also trying to control the spiraling costs of booking talent. From the perspective of gross revenue, 2004 was actually a good year for the concert industry - up 12 percent, to $2.8 billion. But booking costs also rose, fueled by overly optimistic projections and competitive bidding.

That led to higher ticket prices, often beyond what some fans were willing to pay. Last year, the average price of a ticket to one of the top 100 tours was $52.39 before Ticketmaster charges and other fees were added, up about 25 percent since 2000, according to Pollstar.

Concert-ticket revenue is split between the performer and the promoter, with the performer receiving most of the money, customarily around 85 percent. To book talent, the promoter pays an artist or his agent an advance against that share - a guarantee, in industry parlance - in the belief that enough tickets can be sold to make the performer's price worthwhile.

This amounts to a high-stakes bet. "The promoter gets 15 percent of the upside and 100 percent of the downside," said Marc Geiger, head of contemporary music at the William Morris Agency. "The same way an airline may have too many flights to one city, there was too much incorrect guessing on what amount of tickets would get sold."

Promoters, led by Clear Channel, bet too big too often.

"The agents loved this - all they had to say is, 'Someone else might do the show,' and the bidding escalated," Mr. Hodges of the House of Blues said. "With the increase in the cost of talent, we increased ticket prices. And when fewer people show up, we can lose money on what otherwise would be a great show."

As he is adjusting the price of some seats, executives in the industry said Mr. Rapino is trying to impose more discipline on the performers' guarantees. "I couldn't charge these prices if our costs hadn't changed a bit as well," Mr. Rapino said. In certain cases, he said, an artist may get all the net proceeds from ticket sales. That kind of deal would presumably be made in exchange for a reduced guarantee.

Managers' reactions to these changes have been cautiously optimistic, in part because for artists the stigma of playing to empty seats can offset the benefit of a high guarantee.

"I believe that acts are being paid far more realistically, based on how they actually perform," said Jim Guerinot, who manages Gwen Stefani and Nine Inch Nails, who will both play at arenas in the fall.

Concert promoters also face some problems beyond their control. Rappers and pop stars dominate radio, but generally do not have the draw of rock bands on the road. Even Eminem, who sells millions of albums, will mostly play at amphitheaters on a package tour. On the rock side, "there's less demand for things people have seen before," said Dave Roberge, manager of the band O.A.R. "Seeing John Mellencamp today might not be that different from seeing him two years ago."

At the same time, there are simply more concerts to choose from. "The pressure on the consumer entertainment dollar becomes very dramatic between Memorial Day and Labor Day," Mr. Guerinot said.

So far, business this summer already looks as if it will improve from last year. "This time last year, we felt we were being run over by a truck every day," Mr. Hodges said. "We feel pretty good now." Several superstar tours, including those by the Stones, U2, Coldplay and the Dave Matthews Band, should give the business a lift.

"In the world of the music business," Mr. Guerinot said, "the live business is one of the best because you can't download it. It boils down to creating an environment for it to be successful."

And Mr. Hodges added: "There's an oft-used expression: 'There are no bad shows, there are just bad deals.' We live and die by that."

Concert-ticket revenue is split between the performer and the promoter, with the performer receiving most of the money, customarily around 85 percent. To book talent, the promoter pays an artist or his agent an advance against that share - a guarantee, in industry parlance - in the belief that enough tickets can be sold to make the performer's price worthwhile.

This amounts to a high-stakes bet. "The promoter gets 15 percent of the upside and 100 percent of the downside," said Marc Geiger, head of contemporary music at the William Morris Agency. "The same way an airline may have too many flights to one city, there was too much incorrect guessing on what amount of tickets would get sold."

Promoters, led by Clear Channel, bet too big too often.

"The agents loved this - all they had to say is, 'Someone else might do the show,' and the bidding escalated," Mr. Hodges of the House of Blues said. "With the increase in the cost of talent, we increased ticket prices. And when fewer people show up, we can lose money on what otherwise would be a great show."

As he is adjusting the price of some seats, executives in the industry said Mr. Rapino is trying to impose more discipline on the performers' guarantees. "I couldn't charge these prices if our costs hadn't changed a bit as well," Mr. Rapino said. In certain cases, he said, an artist may get all the net proceeds from ticket sales. That kind of deal would presumably be made in exchange for a reduced guarantee.

Managers' reactions to these changes have been cautiously optimistic, in part because for artists the stigma of playing to empty seats can offset the benefit of a high guarantee.

"I believe that acts are being paid far more realistically, based on how they actually perform," said Jim Guerinot, who manages Gwen Stefani and Nine Inch Nails, who will both play at arenas in the fall.

Concert promoters also face some problems beyond their control. Rappers and pop stars dominate radio, but generally do not have the draw of rock bands on the road. Even Eminem, who sells millions of albums, will mostly play at amphitheaters on a package tour. On the rock side, "there's less demand for things people have seen before," said Dave Roberge, manager of the band O.A.R. "Seeing John Mellencamp today might not be that different from seeing him two years ago."

At the same time, there are simply more concerts to choose from. "The pressure on the consumer entertainment dollar becomes very dramatic between Memorial Day and Labor Day," Mr. Guerinot said.

So far, business this summer already looks as if it will improve from last year. "This time last year, we felt we were being run over by a truck every day," Mr. Hodges said. "We feel pretty good now." Several superstar tours, including those by the Stones, U2, Coldplay and the Dave Matthews Band, should give the business a lift.

"In the world of the music business," Mr. Guerinot said, "the live business is one of the best because you can't download it. It boils down to creating an environment for it to be successful."

And Mr. Hodges added: "There's an oft-used expression: 'There are no bad shows, there are just bad deals.' We live and die by that."

SAN ANTONIO - The new owners of Clear Channel Communications are betting that they can stem the tide of stagnating radio advertising sales and listeners who have migrated to the Internet, satellite radio and iPods.
In the third-largest buyout ever, the nation's biggest radio station operator said Thursday that it had agreed to an $18.7 billion offer from private equity firms Thomas H. Lee Partners and Bain Capital Partners.

In addition to paying $37.60 in cash for each Clear Channel share -- a 10 percent premium on Wednesday's closing price -- the buyers will assume $8 billion in debt.

Chief executive Mark Mays said the time was right to take the company private because its stock -- which has lost 60 percent since 2000 -- was being undervalued by equity markets. The San Antonio company put itself up for sale last month after asset sales and share buybacks failed to boost the stock price.

"We tried to figure out what would be a way out of that, and obviously the private equity markets have a much different view," he said by telephone.

Mays said $37.60 was a "great price" for shareholders, and the private equity firms "think they got a great company and have a long-term view associated with it."

The transaction would be one of the biggest deals to take a company private, excluding debt, and illustrated the vast sums that buyout specialists have been able to assemble to acquire public companies.

The company has until Dec. 7 to solicit competing proposals. Another bid for Clear Channel had been expected from Providence Equity Partners, the Blackstone Group and Kohlberg Kravis Roberts.

"The private equity firms are looking to capitalize on an opportunity," Fred Moran, an analyst at Stanford Group in Boca Raton, Fla., said. "They see that media stocks have been pummeled and perhaps they are now speculating that this is the beginning of a recovery."

Lee and Bain will put in equal amounts of money to own a company, which posted an 8.2 percent rise in profit in the most recent quarter. They also will control billboard-advertising company Clear Channel Outdoor Holdings, which tripled profit on a 7.8 percent rise in sales.

Clear Channel owns or operates 1,150 radio stations and is the largest operator of radio stations in the country. The company said it plans to sell 448 of its radio stations, all located outside the top 100 markets, as well as its 42-station television group, which are also in smaller markets.

Clear Channel's four Triangle radio stations -- country station WRDU-FM (106.1); classic rock station WRVA-FM (100.7); adult contemporary station WRSN (93.9); and contemporary hits station WDCG (105.1) -- aren't among those the company is putting up for sale.

Once stock market darlings, radio stocks have fallen out of favor on Wall Street in recent years. Clear Channel has instituted several measures to try to regain listeners, including cutting back on the number of commercials.

However, other operators have yet to embrace its "less is more" strategy.

Clear Channel was founded in 1972 and benefited greatly from the loosening of media ownership rules, which allowed more radio stations to be held by a single owner in each market.

The deal would rank behind KKR's 1988 buyout of RJR Nabisco, which still is the biggest going-private deal ever, at $25.1 billion. It would also trail two other deals announced this year. Those included the $21.8 billion buyout of airport development company BAA and the $21.3 billion buyout of hospital company HCA on Thursday.

The company said it doesn't expect any senior management changes or significant layoffs as a result of the buyout.

Mark Mays would remain CEO, and Randall Mays, his brother, will stay on as chief financial officer. Their father, Lowry Mays, the chairman, will continue to have an active role, the company said. Mark Mays said Thursday that might mean a "chairman emeritus" role for his father.

Under terms of the agreement, Clear Channel could seek other offers and negotiate a new agreement until Jan. 5. Clear Channel would pay Lee and Bain $300 million to $500 million in breakup fees if it chooses a better offer.

Kit Spring, an analyst for Stifel Nicolaus, wrote in a note that shareholders should reject the initial offer.

Clear Channel's "assets could command a much higher price if sold piece by piece, in our view," the note said.

Clear Channel said that it expects to close the acquisition by the fourth quarter of next year.

And beyond that?

"Maybe they won't be private forever," analyst James Goss of Barrington Research said. "That's always a possibility (going public again) because private equity usually has an exit strategy. They don't really buy it just to own it forever. ... If it were public again, it wouldn't look the same as it did the first time around."

Clear Channel's shares jumped $1.24 to $35.36 Thursday after rising earlier to a 52-week high of $35.88.