Wednesday, July 17, 2002
Nederlander Concerts Seeks to Have Suit by Anschutz Entertainment Over Staples, Forum Rights Handled Through Arbitration
From Staff and Wire Service Reports
Nederlander Concerts said yesterday it has asked for arbitration in a dispute with Anschutz Entertainment Group over a 1999 agreement on concert promotions at the Staples Center downtown and the Forum in Inglewood.
Nederlander filed a complaint with the American Arbitration Association Monday after learning of a suit AEG filed Friday in Los Angeles Superior Court.
Under the deal with AEG, Nederlander said it guaranteed $2.4 million in revenue for rights as the exclusive concert programmer and promoter for the Staples Center and the Forum, which are managed by AEG.
AEG is suing to terminate Nederlander’s contract, which runs until 2004, and is claiming $500,000 in unpaid revenue guarantees. Nederlander maintains it owes AEG no money because the contract was violated when AEG companies interfered with concert planning, preventing Nederlander from performing its contracted duties.
Nederlander attorney Adam F. Burke said that “Staples ... was not in the concert business” when the agreement was signed in November 1999.
Nederlander’s complaint alleges that, with the acquisition of Concerts West, Inc. and Golden Voice, Inc., which are both concert promotion companies, AEG began interfering in concert planning and promotion, undermining Nederlander’s exclusive privileges.
AEG began calling artists’ representatives and making deals independent of Nederlander, Burke said. However, AEG still demanded Nederlander compensate them for shortfalls in the guaranteed revenue, according to the complaint.
“They created a situation where it was all obligation and no control,” Burke said.
“We were surprised and disappointed by AEG’s lawsuit,” Nederlander Concerts Chairman James M. Nederlander said.
The two groups had been in negotiations over the alleged contract violations when AEG filed the suit.
In its arbitration claim, Nederlander wants to restore and enforce its 1999 exclusive agreement with AEG and compensation for costs incurred as a result of AEG’s alleged interference.
Though Burke said Nederlander had not determined how much it sought in compensation, he said he believed there had been several hundreds of thousands of dollars worth of harm done just by AEG’s interference with concert planning.
An AEG spokesperson said the company had no comment on the action by Nederlander Concerts.
“It is unfortunate that we were forced to initiate a lawsuit against the Nederlander organization, but its failure to meet financial obligations [despite being given repeated opportunities to do so] left us no choice,” Barry Mallen, attorney for AEG, said earlier in a statement.
“Nederlander sought the benefit of having the exclusive booking rights in these marquee facilities but, unfortunately, did not meet its commitments under the parties’ agreement.”
According to Nederlander, however, it had excellent results at Staples Center, winning two Pollstar Best Concert Venue awards since 2000.
“The law is very clear on this issue,” Burke said. “AEG cannot demand the guarantee when it has consistently and deliberately broken its promise to provide Nederlander with exclusivity.”
Los Angeles-based Nederlander is a family-owned business founded in 1912 that operates more than 25 live theaters and music venues in the United States, Canada and England.
AEG, part of the Denver-based Anschutz Corporation, is a sports and entertainment company that owns the Los Angeles Kings hockey team, the Los Angeles Galaxy soccer team, the Staples Center and the London Arena; it also operates the Kodak Theatre in Hollywood.
Copyright 2002, Metropolitan News Company