Suit: Clear Channel is an illegal monopoly

A tiny Denver concert promoter is taking the most powerful force in the music industry to court.

By Eric Boehlert

Aug. 8, 2001 | The grumbling inside the music business had been growing for months. Now, an independent concert promoter in Denver has come forward to assert in court what many have been afraid to say out loud: that music-industry giant Clear Channel Communications runs an illegal monopoly that thwarts competition.

Filing an antitrust suit in Denver federal court late Monday afternoon, Nobody in Particular Presents, or NPP, a small promotions firm that over the years has handled local concerts for Pearl Jam, Sarah McLachlan and the Beastie Boys, among others, charges the company with using monopolistic, predatory and anticompetitive business practices.

Clear Channel Communications' nearly 1,200 radio stations represent about 10 percent of the U.S. radio market, and more than half of the country's major popular-music stations. The company's network of concert-promotion companies gives it effective control of the U.S.'s rock and pop touring business as well. Recent stories in Salon have outlined the company's aggressive business practices.

The suit charges that the company penalizes performing artists who hire NPP by keeping those artists off Clear Channel-owned radio stations. Radio airplay is one of the most important ways that artists build careers, and radio promotional support is a key part of filling concert venues.

NPP alleges, "Clear Channel repeatedly has used its size and clout to coerce artists to use Clear Channel to promote their concerts or else risk losing air play and other on-air promotional support."

A Clear Channel spokeswoman says the company does not comment on pending litigation.

The suit also claims NPP has been thwarted in its attempts to buy ads on Clear Channel's rock stations to promote its concerts. For instance, the company claims it bought advertisements to promote the popular Warped Tour's local Denver stop this summer on Clear Channel's local alternative station, KTCL, and provided Warped tickets for KTCL to give away over the air.

The ads were supposed to run during specific times during the day. NPP claims the ads did not run during the assigned times but instead ran late at night or in the early morning hours, and alleges further that the station gave away the tickets not to listeners but to Clear Channel employees, including Mike O'Connor, head programmer for Denver's Clear Channel stations.

NPP co-owner Jesse Morreale claims that Clear Channel was slowly putting the company out of business. "We don't have a choice," he says. "This is not a position we want to be in. We've been put in it. We've got to stand up for ourselves and for the business."

Ever since March of last year, when Clear Channel bought up the country's largest concert promoter, SFX Entertainment (recently rechristened Clear Channel Entertainment), the music business has watched warily to see how the Goliath would leverage the two distinct businesses. Word of heavy-handed tactics on Clear Channel's part began to spread, but to date nobody had come forward with an official complaint. "People are scared," Morreale says.

Clear Channel is not only the nation's largest broadcaster and concert promoter. It also owns more than 100 concert venues, various radio research companies, radio trade magazines, regional news networks, syndicated programming and an airplay monitoring system. Through a series of recent multibillion-dollar acquisitions Clear Channel enjoys unprecedented clout within the music industry.

And nowhere have those synergies caused more concern than between the company's radio and concert holdings. In the past, the managers of rock artists dealt with radio programmers and concert promoters separately. Together they make up the lifeblood of an artist's career.

Acts need radio airplay in order to gain mass exposure. Once they have that exposure (i.e., hit songs) they can sell lots of concert tickets. And all but the very biggest pop acts make most of their money off concerts, not CD sales.

Conversely, concert promoters need radio stations to hype live shows on the air to make sure tickets get sold.

According to some in the business, that equation is now badly out of balance. One manager for a platinum-selling rock band says too often bands today have to choose between radio airplay or a big concert payday. He says not long ago his act was arranging a deal for a concert in Denver.

Next page: "They couldn't afford to piss off a Clear Channel station"