Info courtesy Associated Press

Clear Channel must pay a rival promoter $90 million for engaging in anticompetitive behavior to land a deal to promote motorcycle races, a federal jury decided Monday.

Chicago-based Jam Productions had accused Clear Channel of illegally using its entertainment industry might to scuttle Jam’s bid to promote Supercross racing at stadia across the country.

Jurors ruled that while Clear Channel did not violate antitrust laws, the company did intentionally interfere with Jam’s contract and its business relationship with the American Motorcycle Association. They ordered Clear Channel to pay $17 million in lost profits and $73 million in punitive damages.

“This is an important case in that this jury found that Clear Channel’s conduct here was so grossly inappropriate that they awarded punitive damages,” said Jam attorney Jeffrey Singer.

Clear Channel said it would appeal the verdict. “We are very disappointed that the jury didn’t see this case for what it really was – a disgruntled competitor who couldn’t succeed in the marketplace and took his case to the courtroom,” the company said in a statement.

At issue in the six-week trial was how Clear Channel won a lucrative bid to promote Supercross races. Jam’s attorneys claimed Clear Channel plotted to intimidate stadium owners and the American Motorcycle Association after learning Jam was set to land the deal.

The AMA, a Supercross sanctioning body, had signed a letter of intent with Jam in 2001 giving the promoter 90 days of exclusive negotiating rights to finalize a promotion deal. During that period, Clear Channel made a counteroffer.

Jurors ordered the AMA to pay about $170,000 in out-of-pocket expenses to Jam for breach of conduct. An attorney for the AMA did not immediately return a call Monday.

Clear Channel operates about 1,200 radio stations and 41 television stations in the United States and is the world’s largest producer of concerts and other live-entertainment events.

Attorneys for Jam argued that Clear Channel used its market clout to pressure stadium operators into denying Jam booking dates for its Supercross series by threatening to pull other events, such as concerts and monster truck meets.

The trial featured e-mails from Clear Channel executives talking about the Supercross bid, including one that suggested that disc jockeys at two Clear Channel radio stations should badmouth the AMA and Jam.

Jam also claimed Clear Channel plotted to have an international motorcycle body (FIM) expel the AMA in its bid to derail Jam’s deal. The promoter also claimed that the AMA and Clear Channel violated the law by negotiating during the time it was supposed to have exclusive rights.

Some history on the case:

This info is by John Schmeltzer – Tribune staff reporter – initially published February 7, 2005

The objective of Clear Channel Communications Inc. was clear in 2002 when it sought to block Jam Productions Ltd.’s newly formed sports group from promoting AMA Supercross motorcycle races, contends Jerry Mickelson, president of the Chicago-based concert promoter.

“Kill, crush and destroy. That was their mission,” said Mickelson, who claims that JamSports and Entertainment Productions subsequently has been blocked from other deals. “It was carried out to perfection.”

Clear Channel, which had been the promoter for the Supercross series, has argued that it did not interfere in JamSports’ efforts to secure the contract and denied its actions were anti-competitive.

It’s a matter to be decided by a Chicago jury, selection of which begins Monday in the courtroom of U.S. District Judge Matthew Kennelly.

While a number of issues have been dismissed, and facts remain in dispute, Kennelly agreed to proceed with the case, ruling there was sufficient evidence Clear Channel used its market power to pressure stadiums not to host competing events, “with the sole intent of restraining the competitive process.”

Clear Channel repeatedly has tried to quash the lawsuit, filed in 2002. It has been successful in getting 11 of the 12 antitrust claims dismissed.

Since starting by acquiring a single radio station in San Antonio in 1972, Clear Channel has grown into a global behemoth with more than $9 billion in revenues, in part because of 1996 legislation that deregulated the radio industry. It now operates more than 1,400 radio stations and is the largest promoter of live entertainment and the largest outdoor advertising firm.

The company, still headquartered in San Antonio, is cited frequently by critics as the prime example of what’s wrong with media deregulation.

“They eliminated us from competing in the Supercross arena,” said Mickelson, who said he was blocked from renting prime stadiums to hold the races, allegedly because of Clear Channel’s threat to cancel events they were hosting in those stadiums.

The trial, which could last as long as eight weeks, is expected to be a bare-knuckle brawl. As many as eight Clear Channel executives are expected to testify. Some wrote e-mails and letters directing subordinates to “lock up” key stadiums through at least 2005 “to protect the company if the AMA strikes out on its own,” according to court filings.

The trial comes amid a pair of antitrust investigations of Clear Channel. In one inquiry, Justice Department investigators are examining antitrust allegations lodged by a Denver concert promoter. In the other, investigators are examining charges that the company limited airplay at its radio stations of musicians who did not use its concert-promotion subsidiary.

Ken Hudgens, Clear Channel’s vice president of marketing, wrote in an e-mail, “We need to be scaring people–not the other way around,” according to court documents.


Your Cart