Suit: Clear Channel is an illegal monopoly

Clear Channel Entertainment offered the act significantly less money to promote the show than NPP did. Since the manager is supposed to act in the best interest of the band, the logical move would have been to accept the NPP offer to guarantee the band a bigger paycheck.

But the band's label was told that if the act didn't accept Clear Channel Entertainment's lower offer, local Clear Channel stations would not play the band's new single, let alone promote the show on-air. Without that radio support, NPP's more generous offer suddenly didn't look so appealing.

That incident was not isolated. When Everlast played Denver last year the same thing happened, someone close to the artist claims; his label was told if Clear Channel didn't handle the concert promotions, its stations would not promote the show on the air.

Clear Channel has denied allegations like these. Earlier this year, Clear Channel's O'Connor told the Denver Rocky Mountain News, "Our airplay decisions are made completely independent of concert bookings."

Yet stories persist. The manager of another platinum rock band tells Salon that the reason its new single was not getting added to one of Denver's Clear Channel rock stations was that the band had snubbed a Clear Channel sister station in another market, instead performing a concert for a competing station.

Clear Channel competitors say those experiences are not limited to Denver. In Orlando, Fla., Allen Smith, program director at Infinity-owned rock station WOCL, reports it recently had its exclusive promotion of a concert by the band Incubus yanked.

"The label said they couldn't afford to piss off a Clear Channel rock station," says Smith. "There's a perception among labels that Clear Channel is willing to yank your band."

Out in Southern California, punk band POD canceled an exclusive concert for a non-Clear Channel station, a source at the station says. The band's record company was afraid that local Clear Channel stations wouldn't support the band if the concert went on. (Blink 182 recently ran into problems with Clear Channel surrounding a Cincinnati concert; for the complete details of this story, click here.)

None of those specific examples was mentioned in the NPP antitrust suit, or was discussed by Morreale. Instead the charges made in the court filing are more general. Morreale says NPP has specific evidence to support its charges, and will be collecting additional information during the upcoming discovery phase when NPP's lawyers take depositions from industry insiders about their dealings with Clear Channel.

That experience may be an unpleasant one for label representatives caught in the middle. Privately, many are upset by Clear Channel's bullying tactics. But publicly, in order to protect their acts, label executives refuse to criticize the radio and concert giant.

NPP's suit also touches on the controversial topic of radio's pay-for-play system. The music industry over the past few years has evolved a complex method of routing money to the nation's radio stations via a network of middlemen called independent record promoters, or indies. (The middlemen keep the arrangement from violating the letter of the payola laws, which prohibit direct payment for playing songs if the practice is not disclosed on the air.)

The suit charges: "Clear Channel has received payments, directly or indirectly, to play certain records on its radio stations." That too, could be a touchy topic lawyers might quiz record label and radio station employees about.

Concert veterans probably are not surprised that the industry's first lawsuit against Clear Channel originated in Denver. Clear Channel's eight stations there dominate rock radio, making it difficult for competitors to get around the company. Also, the Denver Clear Channel radio stations have their own concert promotion company, Clear Channel Concerts, which predates the purchase of SFX Entertainment last year. In other words, Denver concert promotion profits go directly to the stations' bottom lines, making them especially aggressive in doing business.

To date, the company had been pleased with the results. This spring, Chuck Morris, head of then-SFX in Colorado, told the Denver Rocky Mountain News, "The synergy between Clear Channel and SFX, especially in Denver, has been nothing but spectacular. Denver is becoming a model for how successful it can be."

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