A Chicago jury awarded more than $90 million to JamSports and Entertainment LLC on March 21 in a suit against Clear Channel Entertainment (CCE) and Paradama Productions (dba AMA Pro Racing) regarding
A Chicago jury awarded more than $90 million to JamSports and Entertainment LLC on March 21 in a suit against Clear Channel Entertainment (CCE) and Paradama Productions (dba AMA Pro Racing) regarding promotion of American Motorcycle Assn. (AMA) events.
"This is a victory for the good guys and all of us who have to compete every day with Clear Channel," says Jerry Mickelson, co-owner of Jam with Arny Granat. "I feel vindicated that the jury saw the evidence and sent a message."
The focus of the case was on promotional rights for supercross events for the AMA. Jam alleged that CCE unfairly used its clout in the marketplace to shut out JamSports, the sports division of Jam Productions, from producing such events.
JamSports (which counts Tom Petty manager Tony Dimitriades among its principals) filed the suit in April 2002 in the U.S. District Court for Northern District of Illinois. The trial began Feb. 7.
At issue was a long-term contract to produce supercross events, which for years were held by CCE's motorsports division. The AMA had signed a letter of intent with JamSports in late 2001 for a long-term deal, but supercross ended up back with CCE.
Lawyers for Jam claimed that CCE used its leverage as the world's largest live entertainment producer to intimidate venue managers, threatening that they would lose CCE events if they went with JamSports on supercross.
Attorney Jeffrey Singer says CCE e-mails obtained during discovery were "really what made the case." He cites one from motorsports pioneer Allen Becker, father of CCE chairman Brian Becker, that talked of CCE's policy to "kill, crush and destroy" its competition. "Brian essentially said that was good advice and that [CCE] should be proactive," Singer says.
The jury found CCE liable on two claims: tortious interference with a contractual relationship and interference with a prospective economic advantage. It awarded Jam $17,144,573 in lost profits plus $73 million in punitive damages. Jam had initially sought $32 million in damages.
The jury also found Paradama liable for breach of contract, awarding Jam $169,314.19 in out-of-pocket expenses plus $1 in lost profits.
CCE won on the antitrust claim, which was based on section 2 of the Sherman Antitrust Act.
"I think the industry was watching this very closely, and a lot of people were rooting for us," says Mickelson.
In a statement, CCE responds, "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. Competition is vital to business. Clear Channel plays by the rules and does quite well."
CCE says it will "vigorously appeal" the jury's decision.
"Indeed, this jury's decision that we did not violate antitrust laws should be a powerful signal to those who seek to wrongfully accuse us in the future -- it just won't work," adds CCE. "We are a competitive company -- and we compete within the limits of the law."