In a decision that could very well impact Amercian Supercross in a big way, Clear Channel Communications Inc have been ordered to pay Jam Productions Ltd US$90 Million for engaging in anticompetitive behavior to land a deal to promote the AMA Supercross series, a federal jury decided Monday (March-20).
Chicago-based Jam Productions Ltd. had accused Clear Channel of illegally using its entertainment industry might to scuttle Jam's bid to promote Supercross racing at arenas across the country.
Jurors ruled that while San Antonio-based Clear Channel did not violate antitrust laws, the company did intentionally interfere with Jam's contract and its business relationship with the American Motorcycle Association. They ordered Clear Channel to pay $17 million in lost profits and $73 million in punitive damages.
"This is an important case in that this jury found that Clear Channel's conduct here was so grossly inappropriate that they awarded punitive damages," said Jam attorney Jeffrey Singer.
Clear Channel said it would appeal the verdict.
"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," the company said in a statement.
At issue in the six-week trial was how Clear Channel won a lucrative bid to promote Supercross races. Jam's attorneys claimed Clear Channel plotted to intimidate stadium owners and the American Motorcycle Association after learning Jam was set to land the deal.
The AMA, a Supercross sanctioning body, had signed a letter of intent with Jam in 2001 giving the promoter 90 days of exclusive negotiating rights to finalize a promotion deal. During that period, Clear Channel made a counteroffer.
Jurors ordered the AMA to pay about $170,000 in out-of-pocket expenses to Jam for breach of conduct. An attorney for the AMA did not immediately return a call Monday.
Clear Channel operates about 1,200 radio stations and 41 television stations in the United States and is the world's largest producer of concerts and other live-entertainment events.
Attorneys for Jam argued that Clear Channel used its market clout to pressure stadium operators into denying Jam booking dates for its Supercross series by threatening to pull other events, such as concerts and monster truck meets.
The trial featured e-mails from Clear Channel executives talking about the Supercross bid, including one that suggested that disc jockeys at two Clear Channel radio stations should badmouth the AMA and Jam.
Jam also claimed Clear Channel plotted to have an international motorcycle body expel the AMA in its bid to derail Jam's deal. The promoter also claimed that the AMA and Clear Channel violated the law by negotiating during the time it was supposed to have exclusive rights.
But Clear Channel attorney Chris Gair told jurors the company's proposal made it clear that the AMA shouldn't go forward if doing so would be illegal. Gair said that mistakes by Jam led to the failure of the deal.
Gair also told the jury that Clear Channel holds little sway over stadium owners "because there aren't that many stadium concerts anymore."
Jam Productions, founded in 1972, is the country's largest independent concert and special-events promoter.
