Clear Channel Sued for Alleged Price Gouging
Fri Jun 14, 4:27 PM ET
By Gail Appleson
NEW YORK (Reuters) - A Chicago-area woman on Friday sued Clear Channel Communications for allegedly gouging music concert ticket buyers with inflated prices as the multimedia entertainment company built a monopolistic empire.
The antitrust lawsuit seeks class-action status on behalf of individuals who bought tickets to any live rock concert in the United States from Clear Channel and its affiliates and subsidiaries from Jan. 1, 1997 through the present. The suit, which was filed in Manhattan federal court, seeks unspecified damages.
"Through a series of recent mergers ( news - web sites) valued at nearly $20 billion, and through other anticompetitive and predatory practices ... Clear Channel has built a monopolistic, multimedia empire that is severely harming and decreasing overall competition," the suit alleged.
Howard Schacter, a spokesman for Clear Channel Entertainment, said the company does not comment on the specifics of litigation.
However, he said that ticket prices are set by a number of contributing factors including the fees that an artist charges a promoter to play a show or tour. He said that artists' fees have increased sharply over recent years because of skyrocketing production costs for such things as travel and state-of-the-art sound and lighting.
"In actuality it is to the promoter's benefit to have as many fans at a show as possible. Most of our income is derived from ancillary activities like parking, food and beverage, so it's very important to us that tickets are priced reasonably," he said.
The plaintiff Melinda Heerwagen, of Cook County, Illinois, alleged that the sharp increases in ticket prices are unrelated to inflation. The suit states that from 1991 to 1996, concert ticket prices rose by 21 percent while the Consumer Price Index ( news - web sites) shows that all prices grew by 15 percent.
"Yet, in the last five years, during the time when Clear Channel's consolidation of the industry and anticompetitive practices were implemented, concert ticket prices ballooned by 61 percent while the Consumer Price Index increased by just 13 percent," the suit said.
San Antonio-based Clear Channel is the largest U.S. radio station owner with over 1,200 stations and it also produces more than 26,000 live entertainment events annually. It also owns or controls more than 135 live entertainment venues, including clubs, theaters and large amphitheaters.
On Wednesday, Hispanic Broadcasting Corp. agreed to be acquired by the No. 1 U.S. Spanish-language television group, Univision Communications Inc., in a stock swap worth $3.5 billion.
After the acquisition was announced, Spanish Broadcasting System Inc., a Spanish-language radio company, sued rivals Hispanic Broadcasting and Clear Channel in Miami federal court accusing them of antitrust violations and moves to depress its share price.
Clear Channel, which owns a 7 percent stake in Hispanic Broadcasting, is already the target of intense criticism from rivals and lawmakers that it wields its market-leading position to stymie competition.
Spanish Broadcasting accused the two companies of hampering its ability to raise money, depressing its share price, and driving up prices of its acquisition targets.
On Thursday Sen. Russell Feingold, a Democrat from Wisconsin, said he was preparing a bill that would impose new restrictions on the recently deregulated radio and concert industries.
He said that he was alarmed by a wave of consolidation that since 1996 has allowed a handful of companies to buy up a large portion of the nation's radio stations.
Prompted by growing complaints from recording artists and music fans, he said he would introduce a bill in the next few weeks that would seek to rein in the alleged anti-competitive practices of industry behemoths like Clear Channel Communications. |
