Antitrust Suit Continues Against Clear Channel

A federal judge in Chicago has found sufficient evidence to allow an antitrust suit against Clear Channel Entertainment to proceed to trial.

A federal judge in Chicago has found sufficient evidence to allow an antitrust suit against Clear Channel Entertainment to proceed to trial.

The suit, involving long-term contracts to promote supercross races, was brought by JamSports and Entertainment LLC, a subsidiary of independent concert promoter Jam Productions of Chicago, against Paradama Productions, Clear Channel and two of its subsidiaries. JamSports counts Tom Petty manager Tony Dimitriades among its principals.

Clear Channel entered the supercross promotion market through its acquisition of SFX Entertainment in 2000, succeeding to a contract to produce a supercross series sanctioned by the American Motorcyclist Assn. for the 1997-2002 seasons.

In denying part of Clear Channel's motion for summary judgment, U.S. District Court Judge Matthew F. Kennelly ruled on Aug. 19 that "a reasonable jury could conclude that Clear Channel used its market power to pressure stadiums not to host competing events with the sole intent of restraining the competitive process."

Paradama Prods., doing business as AMA Pro Racing, signed a "letter of intent" with JamSports, which required the parties to reach a formal agreement within 90 days. After a series of negotiations during which Clear Channel also contacted AMA Pro and informed the parties of its intent to produce its own series of races, the contract ended up with Clear Channel.

The court stated in its opinion that JamSports presented evidence that Clear Channel "threatened stadiums that it would pull all if its events (including non-supercross events) from the stadiums if they booked JamSports' supercross race."

A jury trial in U.S. District Court for the Northern District of Illinois is set for Nov. 15.

In the court's 46-page opinion ruling on several motions by the parties, Clear Channel was granted a summary judgment on three antitrust claims based on the "essential facilities doctrine." Under this doctrine, a company that controls an essential facility -- a facility that can't be reasonably duplicated and to which access is necessary if a company wishes to compete -- must make the facility available to competitors on nondiscriminatory terms. The court held that JamSport could not show that it was denied access to facilities "essential" to its ability to put on a supercross series.

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